The new Twins ballpark has been named Target Field, as in Target Center and Target Stores and: “We need some toothpaste and school supplies, let’s go to Tar-zhay.”
For the right to hang its name and its recognizable red bull’s-eye all over the new $517.5 million Twins facility, the Minneapolis-based national retailer can be expected to pay at least $100 million to the team over the next quarter-century, a leading industry consultant said.
Twins and Target officials declined comment on the deal and financial specifics, only to say the arrangement will run for 25 years after the stadium opens in 2010.
As part of the deal, Target will invest in a new plaza, aptly named Target Plaza, outside the stadium, ballpark officials said. The plaza and a bridge will help to connect the ballpark with downtown Minneapolis.
For its dough, Target gets the opportunity to use the stadium as a marketing, branding and advertising platform just a short walk from its own corporate headquarters.
Target is expected to aid the Twins in designing and conceiving in-stadium, team-operated retail outlets. But, no, there won’t be a Target Store in the ballpark, said Twins President Dave St. Peter.
Key signage will be part of the arrangement; almost all Twins games are televised and so, when the likes of the Los Angeles Angels and New York Yankees visit Target Field, that logo will be beamed to those mega-markets, too. Target has stores in 47 states.
A solid play on both sides
Locally, it’s a solid community-relations play.
The team and Target made the announcement this morning after a process that began in early 2008 and then went surprisingly quickly, St. Peter said, but it was a process that included some key parameters to ensure the Twins didn’t wind up marrying a troubled partner.
Just last week, the New York Giants and Jets of the NFL had to drop naming rights talks with Allianz, the Germany-based insurance company, because of that firm’s past association with the Nazis; Allianz helped insure concentration camps during World War II.
When the Houston Astros ballpark opened in 2000, the team sold naming rights to Enron. Enron Field existed for two years before one of the nation’s largest corporate scandals erupted. It is now Minute Maid Park.
As part of its agreement with the Hennepin County-linked Minnesota Ballpark Authority, the Twins control naming-rights decisions and revenue. The Authority must approve the name, but MBA executive director Dan Kenney told MinnPost today he anticipates no objection to the Target-Twin naming deal.
Indeed, Kenney said he’s thrilled that Target and the Twins will combine to extend the ballpark’s plaza all the way to First Avenue, more or less connecting Target Field with Target Center, which is a city-owned building. Just last week, Mayor R.T. Rybak said he’ll seek $3 million in his upcoming budget to aid in ballpark infrastructure costs, including making the stadium more pedestrian- and mass transit-friendly.
Under guidelines established by Jim Pohlad, Carl Pohlad’s son, St. Peter and two other key front-office executives — vice presidents Laura Day and Eric Curry — began discussing naming rights with key Minnesota-based companies earlier this year.
That move to sell the naming rights came after some internal discussions to eschew a corporate name. But, of course, the team itself is kicking in $167.5 million to ballpark construction, so getting cash from other local corporations will aid the franchise’s bottom line.
The guidelines: Any naming-rights candidate had to be Minnesota-based; it had to be consistent with the Twins’ marketing image of being “family focused”; and it had to be known for its “civic activation” and philanthropy.
St. Peter said the Twins had discussions with every Fortune 500 company in town. In every case, the team approached the firms, extending discussions that began in 2007 with luxury suite, premium seating and other marketing tie-ins.
Target has been a sponsor of the Twins for about two decades. The retailer, first part of the Dayton-Hudson Corp., was founded in 1962, one year after the Twins moved to Minnesota from Washington.
Expert estimates annual cost at $6M to $10M
The cost to get a name on a ballpark?
“On an annual basis, as vibrant as [the Twin Cities] market is, it’s probably $6 (million) to $10 million a year,” said E.J. Narcise, a founder and principal at Rockville, Md.-based Team Services, and one of the nation’s leading naming-rights consultants.
But that annual payment is, generally, present-valued to the start of the deal. So, using today’s dollars, it can be reasonably assumed that Target’s payout over the life of the contract will be about $100 million. But the company will likely get a luxury suite, signs and other perks as part of the arrangement.
Target officials declined all comment on the deal’s details. St. Peter refused comment on Narcise’s financial analysis.
According to Sports Business Journal, the five most lucrative Major League Baseball naming-rights deals are: CitiField, the Mets’ new ballpark in New York, valued at $400 million for 20 years; Minute Maid in Houston, valued at $178 million over 28 years; the new Oakland A’s ballpark, Cisco Field, a 30-year, $120 million deal; Citizens Bank Park in Philadelphia, 25 years and $95 million; and Cincinnati’s Great American Ball Park, 30 years and $75 million.
“It’s about branding,” said Narcise of the Target deal. And it’s about “national branding.”
Consider all the impressions on potential Target shoppers from the use of the name “Target” by announcers in the booth to the news stories in newspapers and the web, to the smartly placed signage that TV viewers will see.
Narcise noted that in Detroit’s Comerica Park, General Motors has as large a presence as the bank that bought the naming rights.
“That’s a faux pas,” he said. “I think that Target will do a very good job of branding themselves in that building. There should be no question about who will be recognized there. If I’m Target, I’ve got somebody who’s going to represent me in all of the details.”
Speaking of details, as speculation the past few months about Twins naming rights swirled, some potential names were Wheaties Field and Land O’ Lakes Field.
The Twins purchased the website for the latter, but some dastardly squatter owns www.Targetfield.com already.
“There are ways to link off of our own site,” St. Peter said, sounding not very concerned about the prescient Internet ambush.
Target now controls the names of the two largest entertainment venues in Minneapolis, with Target Center a long fly ball away from Target Field.
“It’s a nice opportunity to extend our visible support of the area,” Target spokeswoman Lissa Reitz said.
Target’s deal with the arena expires after the 2010-2011 season, Wolves CEO Rob Moor said. Discussion about extending the arrangement will soon get under way.
In Moor’s mind, the new Twins deal “solidifies the relationship that Target would want to have with us and the presence they’d want to have” in the Warehouse and North Loop areas.
St. Peter even proposed — half-jokingly and as “my own freelance idea” — that the zone be named “Target Yards” to encompass the arena, the plaza and the ballpark.
But, the way things are going, Targetopolis might be the way we’re headed.