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The Los Angeles Times reveals this morning (Jan. 31) that in a press conference today, Farmers Insurance will announce a $700 million, 30-year naming rights deal for the proposed downtown L.A. football stadium being pushed by Anschutz Entertainment Group (AEG). The stadium would be called Farmers Field. The amount, $700 million, is amazing by previous standards. Reporter Sam Farmer says, "Announcing a naming rights deal for a stadium that has not been built, on a site that has not been approved, for a team that has not been acquired is unheard of. No money will change hands unless each of those wishes becomes fulfilled." But San Diegans wishing the Chargers would remain should be shaken, if they aren't awakened already. It is one more step portending a Chargers departure to L.A. As I have said for years, the Chargers covet LA, but are going through the motions in San Diego in case National Football League owners nix such a move. Frankly, it is looking more and more like the deal is done.

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Comments

MURPHYJUNK Feb. 1, 2011 @ 8:52 a.m.

how much of my insurance premium will go for this?

do policy holders get a choice?

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paul Feb. 1, 2011 @ 12:48 p.m.

None, if you are smart and dump them for this stupidity.

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Don Bauder Feb. 1, 2011 @ 1:38 p.m.

Not a bad idea. Get another insurer. Best, Don Bauder

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Don Bauder Feb. 1, 2011 @ 1:46 p.m.

Most naming rights deals are a waste of marketing funds. For example, there is Minute Maid Park in Houston and Petco in San Diego. Who buys orange juice and pet food? Women, overwhelmingly. But men fill more seats and watch more sports TV than women. There is instance in which an insurance company has the naming rights: Safeco in Seattle. Best, Don Bauder

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paul Feb. 1, 2011 @ 12:54 p.m.

Qualcomm paid $18 million to complete the stadium renovation, and in return got two 30 second ads during the Super Bowl and the naming rights for 20 years. They generated a ton of goodwill at the time and made out like bandits.

Lets compare that to Farmer's deal.

The big difference, of course, is that Qualcomm was negotiating with the city of San Diego...

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Don Bauder Feb. 1, 2011 @ 1:49 p.m.

By standards in place before and after the deal, Qualcomm got a steal. It did because San Diego was desperate to fill an $18 million gap in stadium funding. It would appear that City lawyers, typically, weren't smart enough to bargain for more of Qualcomm's money. Best, Don Bauder

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SurfPuppy619 Feb. 1, 2011 @ 3:09 p.m.

Qualcomm paid $18 million to complete the stadium renovation, and in return got two 30 second ads during the Super Bowl and the naming rights for 20 years. They generated a ton of goodwill at the time and made out like bandits.

Lets compare that to Farmer's deal.

The big difference, of course, is that Qualcomm was negotiating with the city of San Diego...

=========== It turned out to be an excellent deal, but it was not a steal at the time the deal was signed, it was actually ABOVE market because they paid the $18 million upfront, instead of annual isntallments of $900K, so San Diego could finish the stadium expansion.

Qualcomm got the smaller part of the stick on the day the deal was signed, but over time the deal has improved dramatically for them as naming rights costs have gone thru the roof.....

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Visduh Feb. 1, 2011 @ 1:53 p.m.

I was a stockholder of Qualcomm at one time, and it did wonders for my net worth. But after that foolish expenditure of $18 million to put the corporate name on the stadium, I became very concerned, and am no longer a stockholder. I don't intend to become one as long as they do things like that, and as long as the founder's son is the CEO.

That sort of naming is just hubris. No amount of publicity or goodwill could accure to Farmers as a result of the naming that would ever be worth $700 million. That is just an absurd sum of money to spend on an ego trip.

NOBODY makes out like a bandit with those sports sponsorships.

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Don Bauder Feb. 1, 2011 @ 2:12 p.m.

Qualcomm paid very little by comparison with other deals. Does it help the company's marketing efforts? Maybe, but mainly because the company paid so little. Best, Don Bauder

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paul Feb. 1, 2011 @ 3:26 p.m.

I was just the opposite. When I saw what I deal they got and saw they were going for national exposure with Super Bowl ads, I jumped in with both feet and bought as much as I could.

$700 million for 30 years seems just stupid. $18 million for 20 years, when you are framed as the savior locally of the Super Bowl and you get two Super Bowl spots thrown in (probably worth over a million by themselves) to expand your brand nationally was genius.

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Don Bauder Feb. 1, 2011 @ 5:57 p.m.

I'm not sure the Super Bowl spots are worth as much as advertised, but there is no question Qualcomm got quite a deal. Reason: San Diego was desperate at the time. Best, Don Bauder

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Visduh Feb. 2, 2011 @ 10:52 a.m.

Super Bowl ads may be worth a great deal IF you have a branded consumer product or service or IF you are a retailer. Qualcomm Inc. is none of those. So, name recognition does little for them in the mass marketplace. Technogeeks may know all about CDMA technology and its superiority, but even they don't make the decision to use that technology and pay Qualcomm a royalty. Does your cellphone/PDA/iPhone have a sticker on the outside that says "QUALCOMM Inside"? Nope. So, the value to the corporation for name recognition is low. Was it worth $18 million? Extremely doubtful. That it was a "bargain" compared to the sums other sponsors of sports venues have paid really means little.

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paul Feb. 2, 2011 @ 7:33 p.m.

I completely disagree. Qualcomm was little known outside its niche in 1997, but now it is a national brand with widespread name recognition. The stadium was the first major sign I saw that they were attempting to establish a national.

You alluded to the direct comparison by stating "QUALCOMM Inside".

Your same exact arguments could have been said for Intel, yet they worked hard to gain name recognition and made people care about what they couldn't see on the inside. Qualcomm is attempting the same transition and has made great strides in that area.

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David Dodd Feb. 2, 2011 @ 10:53 p.m.

Paul, Qualcomm no longer offers consumer products. I'm not sure how name recognition is something desirable to them anymore. The corporations that purchase their systems technology are certainly aware of their brand; back in the Jack Murphy Stadium days Qualcomm sold cell phones and other consumer goods, but they have changed direction recently. Visduh's point is an accurate one.

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paul Feb. 3, 2011 @ 11:17 a.m.

Among other things, brand recognition is a recruiting tool for talent, it aids in negotiating business to business deals and it is a huge aid when lobbying for regulatory relief.

I haven't seen a lot of Northrop Grumman commercial products for sale and I don't think there are a lot of Global Hawks in private hands, yet I recently saw a whole bunch of commercials for the Global Hawk on TV aimed at consumers.

Why, do you suppose?

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David Dodd Feb. 3, 2011 @ 11:59 a.m.

I've never seen a commercial for Northrop. And if I'm in charge of the advertising budget for Qualcomm, I'm not spending a dime on television commercials or stadium naming rights. I am targeting potential customers in trade journals and similar publications. But that's just me, your mileage may vary.

Qualcomm has a large pool of potential employees to choose from. Everyone wants to live in San Diego, try hiring a janitor sometime and watch how many applicants have college degrees. San Diego is Eden, everyone wants a bite of that forbidden fruit.

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paul Feb. 3, 2011 @ 4:49 p.m.

"I've never seen a commercial for Northrop"

Then you haven't been looking, which doesn't prove your point.

If really you don't understand why a major company would want to build its brand, then I'm really not sure what else to say.

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David Dodd Feb. 3, 2011 @ 5:34 p.m.

If you really don't understand marketing, then I think we're finished here, Paul. Take your company public, spend millions in profit on advertising that does nothing to create revenue, just don't look at me as a recruit.

The Reader should advertise Nationally! Not. Wouldn't make sense. Do what you will with your own company, my man. I won't work for you.

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paul Feb. 3, 2011 @ 7:07 p.m.

Not to worry.

If you think a nationally recognized multi-billion dollar tech company should be marketed the same way as a free local paper, then there is no danger of you ever working for me.

Qualcomm did exactly what you said not to do. They went public in 1991 and spent millions building their national brand, especially from 1997 on. All that did for them was interest people enough that their stock rose 35 times from 1997 to 2000.

What chumps they were. They should have listened to you.

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David Dodd Feb. 3, 2011 @ 7:53 p.m.

Paul, their stock did not raise because of the stadium. Please.

And apparently, they listened to someone much like myself because they have halted all national advertising. It is no longer necessary. Their stock rose because they went into systems rather than consumer goods. Hope you sold your stock at the crest. Otherwise, you are screwed. They aren't interested any longer in consumer goods. Those "chumps" are quite happy raking in 10% per year.

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SurfPuppy619 Feb. 1, 2011 @ 3:13 p.m.

The naming rights with Farmers is moot, there is no financing for a Stadium.

And these clowns won't front THEIR OWN cash to do these white elephant stadium deals (they are not stupid like the fans are).

LA Pro Football Stadium = DOA

SD Pro Football Stadium = DOA

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paul Feb. 1, 2011 @ 3:31 p.m.

I hope you are right about SD.

I am pretty confident you are wrong (this time) about LA.

At this point I think the issue is far less whether the cash can/will be raised for the stadium, and much more the terms of sale for a team. The NFL needs expansion like another hole in the head, and I can't see LA embracing an existing carpetbagging owner with a new stadium.

LA power players want their own team. What will that cost, and who will sell?

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Don Bauder Feb. 1, 2011 @ 6:04 p.m.

The family owning the Chargers wants to sell part of the team. Would Aschutz settle for less than 50%? Maybe, if he had assurance he would get 100% later -- and maybe promise posts to Alex's grandsons. Of the teams that are said most likely to relocate to LA, such as Minnesota, Jacksonville, Buffalo and the Chargers, I would say the Chargers are most likely. Best, Don Bauder

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SurfPuppy619 Feb. 2, 2011 @ 1:03 p.m.

Did the Spanos family sell a portion of the Chargers recently?? Will they sell more, even a majority of the team???

Al Davis sold a good portion of the Raiders recently, I think it was 33%?

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David Dodd Feb. 1, 2011 @ 3:43 p.m.

Holy cow, what more proof do you need, SP? This is a done deal!

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SurfPuppy619 Feb. 1, 2011 @ 5:22 p.m.

Holy cow, what more proof do you need, SP? This is a done deal!

==== Sorry refried, it is by no means a done deal, and IMO it won't be happening for 15-20 years-at a minimum.

Remember, the Radiers left Smell A in 1995, that was 16 years ago-and the NFL, and every NFL wannabe, has been saying they are going to build a stadium ever since....heck, I remember back in 1988 when Al Davis claimed he was going to build a new stadium in Irwindale-now come one Refried-that is going back 23 years.

This is all wishful thinking. If they could not get it done in two of the biggest CA booms in the last 100 years, if not the histry of the state (dot com and real estate) then they don't have a snow balls chance in hell to do it in this depression.

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Don Bauder Feb. 1, 2011 @ 6:33 p.m.

I think the Irwindale deal was just a scam. Davis was paid just to talk to Irwindale. He talked with the town, and walked away with his money. Best, Don Bauder

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Don Bauder Feb. 1, 2011 @ 6:31 p.m.

You can make a case that it is a done deal -- and with the Chargers. But as SP says, financing can be a barrier for a long time. It will probably be -- and SHOULD be -- an impossible barrier in San Diego, but maybe not in LA. Best, Don Bauder

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Don Bauder Feb. 1, 2011 @ 5:59 p.m.

I assume you believe, because you have said it before, that Roski's City of Industry ploy is DOA too. Best, Don Bauder

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SurfPuppy619 Feb. 1, 2011 @ 8:11 p.m.

I assume you believe, because you have said it before, that Roski's City of Industry ploy is DOA too.

None of these clowns will put their OWN $$ into a stadium, not one. They want free land, multi million dollar bond issues, subsidies, you name it they want it-FOR FREE.

If they were going to finance a stadium with their OWN $$ they would be building right now. Who is going to underwrite a stadium?? No Bank is going to do that-they're not stupid.

There are only two ways a stadium will be built, 1) with taxpayer money-not happening, or 2) owner money-again, not happening.

After all these years, after the BOOM years, if it didn't happen THEN, it just won't happen now.

Just my view-I know many people here don't think I am correct, but I am.

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David Dodd Feb. 1, 2011 @ 3:46 p.m.

Ha! You could've printed this a week ago! Sometimes my sleuthing hits its intended target.

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Don Bauder Feb. 1, 2011 @ 6:36 p.m.

Refried is correct. The rumor of this was leaked to me last week. I didn't post it at the time. Sounded too preposterous. Best, Don Bauder

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SurfPuppy619 Feb. 1, 2011 @ 8:15 p.m.

the Chargers covet LA, but are going through the motions in San Diego in case National Football League owners nix such a move.

NFL owners can't veto a move by any team, Al Davis and The owner of the Colts (Isray??) drove that point home when they left solid supporting fan bases for more $$$ in other cities.

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Don Bauder Feb. 1, 2011 @ 9:34 p.m.

Despite Al Davis's shakedowns, the other owners DO have a say over team moves. Best, Don Bauder

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paul Feb. 1, 2011 @ 9:37 p.m.

Cleveland and the Rams did the same thing.

The Saints will be available as soon as this run is over. They ought to move to Salt Lake to play near the Jazz once again.

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Don Bauder Feb. 2, 2011 @ 7:39 a.m.

Oh yes, the Cleveland Browns and LA Rams moved abruptly, along with the Baltimore Colts. But I don't know that they were defying the league in making those moves. Best, Don Bauder

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Ponzi Feb. 3, 2011 @ 7:41 a.m.

I don't understand it. Los Angeles is the second largest Mexican city in the world after Mexico City. Why not build a soccer stadium?

Seriously, after a football drought of almost two decades, are there really going to be 80,000 people buying season tickets to some new team that shows up?

I guess the wealthy people, who live in the gated communities in Orange County, Malibu, Westwood and Beverly Hills might. But then again, they might not. LA, like San Diego, has so many other things to do these days. Plus they have a world class basketball and baseball team, the Lakers and Dodgers. Why would they want some loser team like the Chargers?

Just putting these thoughts out there for debate.

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Don Bauder Feb. 3, 2011 @ 7:32 p.m.

The biggest attraction in LA is all that money. It's the home of the one industry that has little foreign competition: entertainment. That's where the money is in pro sports. The 18 million metro population is also an attraction. Best, Don Bauder

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Ponzi Feb. 3, 2011 @ 7:49 a.m.

Surf Puppy,

If Farmers is committing to $700 million for naming rights, that’s like money in the bank. Farmer’s is an 82 year old company and third largest writer of personal lines. Armed with a naming contract, a developer could walk into an investment bank and get a loan against the paper. So it very well could initiate the private financing of a stadium.

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SurfPuppy619 Feb. 3, 2011 @ 8:39 a.m.

Armed with a naming contract, a developer could walk into an investment bank and get a loan against the paper.

I don't think I would agree with this, it may be possible but far from certain IMO.

The naming contract would be over 30 years-and we all know a LOT can happen in 30 years, despite the history and credit worthiness of the company-AIG and GM are two very good examples of companies that went from the largest and most well capitalized in their fields to BK within a decade or less.

Plus the naming rights would only be a part of the cash flow needed to service a large stadium loan debt, the gate, TV and other income would need to pencil out too, and like you said, that may be a tough nut to crack in So Cal b/c of all the activities here-especially after two other teams packed up and moved for the very reasons you listed.

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paul Feb. 3, 2011 @ 11:19 a.m.

If it was in San Diego, the developer would also own the bank, so I am pretty sure he would get the loan.

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Don Bauder Feb. 3, 2011 @ 7:36 p.m.

I'm sure C. Arnholt Smith had no problems getting a loan for the minor league Padres. Best, Don Bauder

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Don Bauder Feb. 3, 2011 @ 7:34 p.m.

Remember, the "private financing" talk is a certain amount of hooey. A linchpin of the deal is that the city will float a $350 million bond to demolish a part of the convention center that already has $440 million of debt on it. Best, Don Bauder

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