Fayette County

UK, KentuckyOne fight over Rupp Arena. St. Joseph Hospital owner wins first legal round.

Lexi, the video board at Rupp Arena
Lexi, the video board at Rupp Arena Lexington Herald-Leader

A judge has barred the removal of signs that KentuckyOne Health paid to have at Rupp Arena as the University of Kentucky’s marketing partner tries to kick the hospital company out.

In a temporary-injunction order signed June 29 and filed in the court record Tuesday, Fayette Circuit Judge Kimberly Bunnell wrote that Lexington Center Corp. shall not allow any competitor to install temporary or permanent signs or take any action that would violate KentuckyOne’s rights to advertise at Rupp Arena.

“KentuckyOne’s sponsorship agreement grants it the right to place its branding and marketing materials in Rupp Arena,” Bunnell wrote in her order. “KentuckyOne has not done anything to relinquish those rights.”

Lexington Center Corp. owns and operates several Lexington facilities, including the arena where the University of Kentucky men’s basketball team plays under a recently renegotiated contract. KentuckyOne’s holdings include Lexington’s Saint Joseph and Saint Joseph East hospitals. It also has hospitals in Berea, London and Mount Sterling.

UK’s new 15-year lease agreement for Rupp Arena allows JMI — the university’s marketing agent that pays UK millions — to sell advertising in the arena visited regularly by thousands of Kentucky fans. JMI already sold advertising in the university’s football stadium. The lease agreement says UK will pay $4.75 million annually for media rights in Rupp Arena, bringing the total annual payment to at least $6.6 million by 2020.

JMI Sports, informed KentuckyOne on June 1 that it intended to begin removal of existing Rupp Arena Kentucky One signs immediately.

The judge approved the injunction after Rupp Arena Sports and Entertainment Properties, the previous agent for media rights promotion at Rupp, sought to end all advertising contracts that were already executed, including the 2016 sponsorship agreement with KentuckyOne that doesn’t end until 2021.

“Lexington Center Corp. was quite surprised to learn that the University of Kentucky was not honoring this contract,” said Elizabeth Snow Hughes, attorney for Lexington Center Corp.

Over the course of the five-year agreement, KentuckyOne is set to pay $1.95 million.

P. John Brady, a Kansas City, Mo., attorney representing KentuckyOne Health, could not be immediately reached for comment.

KentuckyOne said in court filings that it had paid a $355,000 sponsorship payment for the 2016-17 contract year and had “fully and timely paid” $31,062.50 monthly during the current 2017-18 contract year.

That pays for, among other benefits, LED ribbon signage during all UK and high school basketball games; game-time exposure on the courtside rotational panel during all UK home games; video board features; an entire concourse at Rupp customized for KentuckyOne; and the exclusive rights to advertise heart services, cancer services, weight-loss services, and maternity services and care.

Some 400,000 fans attend UK games at Rupp each year, and hundreds of thousands more go to concerts and other entertainment events there. UK has had a lease with Lexington Center for the use of Rupp since it opened in 1976.

The injunction doesn’t end the dispute between KentuckyOne and Lexington Center because the hospital company seeks a trial for breach of contract. Hughes said she plans to file a motion seeking dismissal because Lexington Center Corp. wasn’t a party to the contract.

This is time-lapse footage of 22,108 basketball fans filing in and out of the stands at Rupp Arena as Kentucky played Ole Miss.

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