February 1, 2011

The $700 Million Neon Sign

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In its never-ending quest for a pro football team, one of the groups with plans to build a new stadium in Los Angeles is teeing up an announcement:

Backers of a plan to build a football stadium in downtown Los Angeles are set to announce Tuesday that they have reached a naming-rights deal worth $700 million, which would be the most valuable such agreement ever and a significant step toward bringing an NFL team to Los Angeles.

….The deal [with Farmers Insurance] would provide AEG’s proposed project a crucial chunk of contractually obligated income, starting at $20 million for the first year and escalating incrementally every year after, according to individuals familiar with the negotiations but not involved in them. The stadium would be named Farmers Field.

I’m wildly ignorant about this stuff, and obviously naming rights have been big business for sports venues for a long time now. But I’m still a little perplexed by it. Is this stuff really worth it? Does Farmers Insurance truly get $20 million per year of promotional value just for having its name on a stadium? Or is this largely a charity operation, with a local company demonstrating its support for the community? Or what? Can anyone point me to the definitive piece to read on naming deals?

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Thank you!

We didn't know what to expect when we told you we needed to raise $400,000 before our fiscal year closed on June 30, and we're thrilled to report that our incredible community of readers contributed some $415,000 to help us keep charging as hard as we can during this crazy year.

You just sent an incredible message: that quality journalism doesn't have to answer to advertisers, billionaires, or hedge funds; that newsrooms can eke out an existence thanks primarily to the generosity of its readers. That's so powerful. Especially during what's been called a "media extinction event" when those looking to make a profit from the news pull back, the Mother Jones community steps in.

The months and years ahead won't be easy. Far from it. But there's no one we'd rather face the big challenges with than you, our committed and passionate readers, and our team of fearless reporters who show up every day.

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