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Detroit Free Press Tom Walsh Column: Palace Sports Hawks Naming Rights

Posted on: Tuesday, 14 March 2006, 06:00 CST

By Tom Walsh, Detroit Free Press

Mar. 14--Think of the new $25-million expansion of the Palace of Auburn Hills opening next month as a monument to marketing mania.

The 60,000-square-foot atrium jutting from the north side of the arena will be called the Comcast Pavilion, named for the nation's largest cable system operator.

Inside the Comcast Pavilion will be the ERSA Club, a swank spot for Detroit Pistons season ticket holders to drink and dine, named for a Plymouth-based information technology services company.

One level below the ERSA Club will be the Red Bull bar and the Bacardi bar, named for the energy drink and liquor brands, respectively. Still available for naming: eight luxury suites and a small private club in the -pavilion.

These additions will join the Vito Anthony luxury suites, named for a Rochester home builder, and the Sterling Bank & Trust Club, a posh private club available only to folks with floor seats for the Pistons games, completed last year. Traverse Bay Entertainment, which operates casinos in northern Michigan, signed a 5-year deal in 2002 with the Palace for naming rights to its penthouse and lower suite levels.

If this naming rights binge suggests that Palace Sports & Entertainment, the umbrella group for primary owner Bill Davidson's sports teams and entertainment venues, is trying to make money by slapping a sponsor's name on every nook and cranny of the empire, well, it is.

Except, apparently, for the Palace itself, the empire's cornerstone venue.

"The building name itself is fairly sacred," said Tom Wilson, president and CEO of Palace Sports & Entertainment. "We are, have been and plan on staying the Palace of Auburn Hills."

But notice Wilson's choice of words. He didn't say the Palace name is untouchable. He said "fairly sacred." You never say never in the big-money world of entertainment marketing, where everything seemingly has its price.

Firms part with millions

Even in Michigan's challenged economy, Palace Sports is getting local companies to part with millions of dollars annually to slap their names on clubs or bars or luxury suites. Neither Wilson nor the buyers of the naming rights will divulge exact numbers for each individual deal, but it's safe to assume that Comcast will pay nearly $1 million for its name on the new pavilion, while the other naming-rights deals cost hundreds of thousands.

The Comcast Pavilion deal hasn't been officially announced, but Tony Lent, vice president of sales and marketing for Comcast Michigan, told me a letter of intent has been signed. "We were looking to expand our existing sponsorship," Lent said, noting that Comcast already was leasing one of the 180 luxury suites and was advertising inside the arena.

The pavilion deal will allow Comcast to display its newest interactive technology inside the Palace -- digital voice phone systems, HDTV, high-definition Internet. And Comcast, Michigan's largest cable firm with 1.4 million subscribers in the state, will also have its content wired into all 450 television sets at the Palace.

A giant mass-market company like Comcast is a natural for a naming rights deal, but the ERSA Group, an IT services firm in Plymouth with only eight employees, is a surprising sponsor of the new 17,000-square-foot club for Pistons season ticket holders. The Palace's existing Cingular Club, with room for about 700 members, had a waiting list; the new ERSA Club can accommodate up to 900 members.

"We went over there looking for some season tickets," said Eric Sadek, ERSA's 28-year-old founder and CEO. But when Howard Rosner, the Palace's director of corporate sponsorship, pitched him on the potential of placing ERSA's name on the new club, Sadek was intrigued.

"The people with the premium Pistons seats are people who own businesses and vice presidents of larger companies. If they don't make the key IT decisions, they know who does," said Sadek, whose firm installs and manages IT systems and expects to grow its annual sales volume to $8 million or $10 million in the next few years. ERSA will staff its own kiosk and show off its technology inside the club.

"I still didn't know if we could afford it, but Tom Wilson worked with us on structuring the payments. He liked our organization and wanted to make it work," Sadek said.

Wilson sees ERSA as an ideal beneficiary of a naming rights deal. "In a world of clutter, a unique sponsorship that gives you one-on-one time with potential customers, that can fast-forward a marketing plan by three or four years," Wilson said.

Far beyond the Palace

Palace Sports & Entertainment's marketing approach is showing up in places far beyond the confines of the Palace itself. Mortgage lender Rock Financial's presenting sponsor-marketing relationship with the Pistons has been copied by the Cleveland Cavaliers, which was bought last year by Dan Gilbert, chairman and founder of Quicken Loans and Rock Financial. Cleveland's presenting sponsor is Cub Cadet, a lawn equipment firm. And the Cavs' arena has a Mercedes-Benz club, similar in concept to the Cingular and ERSA clubs at the Palace.

Palace Sports was quick to sell naming rights to DTE Energy when it bought the Pine Knob outdoor music theater years ago.

Look for another outdoor theater to be involved in one of the next naming rights deals. Palace Sports is close to concluding the purchase of a majority interest in the Freedom Hill theater in Sterling Heights, which holds about 7,200 concertgoers. The Palace has been handling booking and marketing operations since last year for Freedom Hill owners Joe Vicari and Gary Roncelli, and has been shopping around the naming rights as the final details of the ownership deal are worked out.

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Copyright (c) 2006, Detroit Free Press

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Source: Detroit Free Press

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