Jay Dieffenbach and Dan Bickley discuss the University of Phoenix getting out of its sponsorship deal with the Cardinals’ stadium and the tanking Suns.
The Arizona Cardinals are seeking a new naming-rights partner for their stadium because the University of Phoenix wants to cut short its deal. A new sponsor could bring in more money for the team.
The Arizona Cardinals are seeking a new naming-rights partner for their Glendale stadium because the University of Phoenix wants to cut short by nine years a 20-year sponsorship deal, both sides announced Tuesday.
Apollo Education Group, parent of the University of Phoenix, has been hit with declining enrollment, regulatory scrutiny and widespread layoffs. The contract had called for University of Phoenix to pay the NFL team $154.5 million over two decades, an average of $7.7 million annually. A new deal likely could double those annual payments to the Cardinals, according to a NFL marketing expert.
The Cardinals’ stadium will become the latest professional facility in the Valley to change names. The marquee on the home of the Arizona Diamondbacks, Phoenix Suns and Arizona Coyotes all have changed in the last several years.
SHOT CLOCK: University of Phoenix Stadium? Not anymore
The University of Phoenix will keep its name on the stadium until a new sponsor is found, a team executive said. The school will continue to be the team’s “official education partner,” and it plans to focus on educational success stories, such as Cardinals wide receiver Larry Fitzgerald earning his bachelor’s degree in communications from the University of Phoenix.
“We will continue to invest in what happens in the classroom and focus on graduates and the degrees they need to continue to succeed in their lives,” said Joan Blackwood, senior vice president and chief marketing officer for University of Phoenix.
READ MORE: University of Phoenix parent co. starts new chapter as private firm
Blackwood said Apollo’s recent business challenges had nothing to do with pulling out of the naming rights deal. Instead, the company wanted to change its marketing focus. She said both sides began talks a few months ago about having the Cardinals find a new naming rights partner.
Talks already are underway for a new sponsor, said Ron Minegar, the team’s executive vice president and chief operating officer.
“We will get the best deal, the right deal,” Minegar said. “We want to have the right brand affiliation.”
New naming-rights deal could double revenue
Naming rights are one piece of a professional sports team’s operating revenues, with other monies coming from TV contracts, ticket sales, concessions, parking and sponsorships.
A new naming-rights partner likely will generate twice what the Cardinals currently receive from University of Phoenix, said Marc Ganis, a sports business consultant and owner of Chicago-based Sportscorp Ltd.
Ganis, who specializes in NFL business issues, said new NFL stadiums underway in Los Angeles and Las Vegas are projected to obtain naming rights deals in excess of $20 million a year.
With that benchmark, Ganis said the Cardinals likely could get a partner to pay between $12 million to $18 million a year for naming rights because the team has been successful on the field in recent years, and the stadium has hosted major sporting events like the NCAA Final Four, Super Bowl, Fiesta Bowl and the College Football Playoff championship game.
BOIVIN: Valley again delivers on big stage with Final Four
“The Cardinals and that stadium have demonstrated that not only can they get major events, but they put them on very well and they likely will continue to get major events in that building,” Ganis said.
Ganis said while the Glendale stadium has had a great run in hosting big-time games, it now will have to compete with new stadiums in Los Angeles and Las Vegas.
“Up until now, the stadium in Glendale was the only domed stadium in the western time zone,” Ganis said. “Now, there will be three. There will be more competition for major events. … Los Angeles will be iconic, and it will blow people away.”
Minegar acknowledged that Ganis is well regarded by NFL teams on marketing issues, but he declined to disclose how much the Cardinals were seeking. But he did say it would be “a market value deal.”
“Naming rights have grown in the last decade,” Minegar said. “We expect our new partnership will be in the top tier of those deals.”
University of Phoenix parent co. struggling
When the University of Phoenix initially won the naming rights sponsorship in 2006, its parent company was in a massive growth spurt and was trying to develop a national and global brand.
In recent years, the private school has faced competition from colleges and universities offering online classes and degrees.
RELATED: New Apollo group owners closing Western International University
In the same time period, regulators have asserted the company engaged in high-pressure sales tactics, such as offering bonuses to recruiters based on the number of students they enrolled. Apollo also was accused of misleading students, many of whom were poorly qualified to seek college degrees and wound up saddled in debt, with modest job prospects.
Apollo’s stock, which once traded near $90 a share, ceased trading Feb. 1 around $10 a share, the price paid to shareholders as a result of the company’s $1.1 billion acquisition by an investor consortium headed by the Vistria Group and Apollo Global Management, an unrelated company.
Apollo Education’s shareholders approved the acquisition in May 2016, and approvals also were given by the U.S. Department of Education and the Higher Learning Commission.
Republic reporter Russ Wiles contributed to this story.
Why 3 of 4 Phoenix-area sports teams are discontent with current arenas
Arizona Coyotes arena-funding bill nearly dead at Arizona Legislature
A remodeled Phoenix Suns arena downtown? City studying idea
Read or Share this story: http://azc.cc/2opis8F