LOUISVILLE — As construction moves forward to complete the downtown Louisville arena in 15 months, officials say they are in talks with 16 companies interested in purchasing naming rights to the building, but aren't close to reaching a deal.
Officials with Team Services, a company responsible for the arena's corporate sponsorships, have narrowed the number from an initial pool of more than 70 companies. They expect two or three candidates to emerge as serious contenders for the $2 million-to-$2.5 million-per-year contract for the arena's name.
"We're constantly narrowing it down," Team Services Principal E.J. Narcise said.
Narcise said the search for a naming rights sponsor typically begins 12 to 18 months before a project's scheduled completion, so officials have plenty of time left to finish the search.
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Corporate sponsorships are a key component to recouping the $238 million cost of building the arena. The project also includes a $32 million garage funded by the Parking Authority of River City.
Louisville Arena Authority Chairman Jim Host said during a recent arena authority meeting that changes in economic conditions have made some companies, such as banks, wary of putting their name on a project.
Several recent high-profile projects, such as the Dallas Cowboys' new stadium, have failed to secure naming rights, and others have been unable to renew contracts with sponsors.
However, the comparatively low price to become the 22,000-seat downtown arena's main sponsor has attracted interest, Narcise said. Other facilities have sold their naming rights for as much as $15 million per year, he said.
"We won't use the economy as an excuse. This building is priced to sell," Narcise said.
Lynn Saltzman, Team Services' general manager for the project, said the company is talking with local, regional and national companies as potential namesakes. They include restaurant chains, retailers and service providers such as insurance and energy companies.
The arena authority has signed a contract with Team Services that guarantees sponsorship and advertising revenue of at least $15 million over the arena's first seven years of operation, regardless of whether the company secures a naming-rights sponsor.
Money that isn't generated from naming rights will probably come from cornerstone corporate sponsorships, such as the 10-year, $10 million agreement made with Norton Healthcare in March, Host said.
"We'll hit the number whether we have a naming rights deal or not," he said.
Saltzman said officials expect to announce an additional $8 million to $10 million in local sponsorships in the next three or four months. Officials have met with more than 100 companies about opportunities such as "locational naming rights" for specific areas of the building, as well as food, beverage and retail vending rights.
"Obviously they can't all do it at the naming rights level, so we're working with them right now to take their goals and objectives and match them with the assets in the facility," she said.
Team Services initially contacted 24 Kentucky companies, 29 regional companies and 19 national corporations about naming rights. Although such negotiations typically are focused on local sponsors, Saltzman said the Big East Conference's large television audience has attracted interest from outside Kentucky.
The University of Louisville men's basketball team, which will be the arena's main tenant, plays in the Big East.
Host said Gov. Steve Beshear will make an important announcement regarding the arena at 2 p.m. on Aug. 4 at the Kentucky International Convention Center, 221 S. Fourth St. He would not reveal details of the announcement, but "one part of it will be extremely significant to the arena," he said.
"Wish I could tell you more, except to tell you that I'm excited that he's going to do what he's going to do," he said.