OLYMPIA – CenturyLink, Inc. is willing to more than double its payments for the naming rights to the stadium where the Seattle Seahawks play and is offering to renegotiate a new contract two years before the current deal expires.
The national telecommunications giant is asking the state Public Stadium Authority to approve a 15-year, $162.7 million extension of the deal to keep its name on the stadium, a special legislative advisory committee was told Wednesday. The authority, which oversees the sports facility built with taxpayer money, is likely to agree.
Dan Barrett, a sports business consultant the authority hired to review the deal, estimated the new contract would rank fifth among the 24 NFL teams that sell the naming rights to their stadiums. The current contract ranks 17th.
Ranking so high under the new agreement would be unusual, considering Seattle is below average in terms of population, the number of “high-income” households, size of its economy and its TV/Radio Base, he said.
But the Seahawks’ five consecutive playoff appearances make the naming rights more valuable. So does the stadium’s other tenant, the Seattle Sounders, who won the MLS Cup in 2016 and regularly lead that league in attendance. The stadium also hosted other events over the last five years that averaged more than 500,000 in attendance each years.
“At this point in time, it seems like a very good deal,” Barrett told the advisory committee.
The extension has already been approved by Football Northwest, LLC, which owns the Seahawks, and First & Goal Inc, which operates the stadium
The new deal keeps an important element of the current contract, which requires 42.5 percent of each year’s payment by CenturyLink to be set aside for major maintenance and improvements on the stadium. That would total more than $69 million over the life of the contract.
Most NFL naming rights deals don’t include such high amount for stadium maintenance. That provision is a reflection of the situation the state found itself in when it needed to replace the Kingdome, where maintenance had neglected to the point where the ceiling tiles were falling down. Legislation for the new stadium required a share of the naming rights go to maintenance, as well as money from the admissions tax as soon as bonds are paid off in 2021.
Under the new contract, CenturyLink would pay $9.25 million in 2020, and that annual payment would rise 2.8 percent a year through 2033, to reach about $13.5 million. Over the life of the contract, the average yearly payment is $11.1 million. That compares with the current contract that started at $4 million in 2004 and will hit $6.3 million next year.
CenturyLink will pay extra if the Seahawks host playoff or divisional championship games.
If CenturyLink should be bought out by another company – as it did to Qwest in 2011 – the new owner can change the name on the stadium once during the term of the contract but has to pay for the new signage. That can cost up to $1 million, Barrett said.
Changing signage is so expensive that the city of Seattle is leaving the name on KeyArena, even though KeyBank refused to renew its contract in 2011.
When Rep. Andrew Barkis, who sits on the committee, asked whether the authority was putting the naming rights out to bid, members of the authority said they decided to give CenturyLink the first shot at coming in with a fair market offer, and hired Barrett to examine it.
In general, the value of naming rights go down if they are changed because people refer to a stadium by its old name for a while, Barrett said.
The stadium authority is not considering other offers for the naming rights for the 69,000-seat stadium and the accompanying Event Center, Lorraine Hine, a member of the authority board, said. It’s expected to vote on the new contract in the next two weeks.