What's in a name?
Just ask the owners of the Mets baseball stadium under construction in New York, who sold the naming rights to Citigroup Inc. for $400 million.
Today, the company owned by billionaire developer Philip Anschutz is expected to announce a new venture to expand its emphasis on sponsorships and naming rights through a new division.
AEG's finances are private, but "sponsorship and naming rights agreements are critical components of the overall revenue of our company," said AEG President Tim Leiweke. Industry experts estimate the company is valued at more than $6 billion.
The new division that will be led by President Todd Goldstein is on track to generate more than $250 million worth of sponsorships this year, the company said. It will also manage relations with existing sponsors.
AEG has been at the center of a naming explosion that has seen corporate monikers attached to venues of all kinds from Tropicana Field in St. Petersburg, Fla., to Petco Park in San Diego.
The proliferation of business and product names has drawn mixed reactions from fans. Some critics decry the commercialization of local landmarks while others long for names they grew up with.
San Francisco voters passed an initiative to ensure that historic Candlestick Park would no longer be called Monster Park when Monster Cable Products Inc.'s rights expire at the end of the month. But that return to tradition was an exception to the rule, said David Brooks, a senior writer at industry journal Venues Today.
"We are seeing an environment now where essentially everything is for sale," Brooks said, noting that naming rights are the biggest area of revenue growth for arena operators after luxury seating.
Inside arenas there are clubs, restaurants, bars, hospitality suites -- all with the potential to be named after companies that want to reach free-spending fans.
"There is kind of a sense that naming is a little bit out of control and people make fun of it," Brooks said. "But I think fans realize it's here to stay."
AEG was founded in 2000 to help promote events at Staples Center, for which the Massachusetts-based office supply store chain Staples Inc. paid a reported $100 million to have its name on top. Since then, AEG has expanded into one of the largest event promoters and arena managers in the world with more than 15,000 employees.
Helping lead the company expansion, Leiweke said, are Chief Financial Officer Dan Beckerman, who was just awarded the additional title of chief operating officer, and former General Counsel Ted Fikre who was promoted to chief legal and development officer.
Much of AEG's growth has been through acquisitions such as last Thursday's purchase of an interest in boxer Oscar De La Hoya's Golden Boy Promotions Inc. But other growth has come from development of costly new venues such as the $2.5-billion LA Live complex next to Staples where Nokia Theatre has already been completed.
Other elements under construction there include a 54-story hotel and condominium housing a Marriott and Ritz-Carlton hotels. The steel frame is rising at the rate of a floor a week, Leiweke said. LA Live will also include broadcast studios for ESPN, nightclubs, restaurants, stores and movie theaters.
Although the company does do large scale entertainment and sports facility development, AEG's main focus is on owning and operating arenas, Leiweke said. It manages facilities for other owners in the U.S. and abroad, and just signed an agreement to operate four arenas for the city of Stockholm in Sweden.
AEG is also helping ready the basketball arena at the Beijing Olympics and will manage it after the summer games are over. "We want to be the largest manager of arenas in world," Leiweke said. "We expect we will be by the end of the year."
The company's other main focus is on providing entertainment fare for arenas. The company owns sports teams including the Los Angeles Kings and has partnerships with other providers such as Golden Boy, Mark Burnett Productions, Walt Disney Co. and 19 Entertainment Inc., which created American Idol.
The next challenge will be to weather the economic downturn, Leiweke said.
"We are prepared to see some negative impact on our business," he said. "Sponsors are going to be a little more conservative and not everyone can buy a suite or a premier seat."