$10M stadium naming rights deal at Fresno State comes with costs, Bee investigation shows

Fresno State landed a $10 million naming rights contract with Valley Children’s Healthcare for its aging football stadium, but that deal could also put its athletics department in a financial bind.

The contract between the San Joaquin Valley giants, which was negotiated by the university and not the athletics department, includes a high degree of exclusivity that shuts out other entities in the healthcare industry from sponsorship opportunities on campus. As a result, the Fresno State athletics corporation had to amend its multimedia rights agreement with Learfield/Bulldog Sports Properties, removing healthcare-related opportunities, and agree to take considerably less in bankable revenue through the final five years of that deal.

The contract with Learfield guaranteed the Bulldogs $3,245,000 in 2021-22, before the naming rights contract with Valley Children’s. The amended deal now guarantees the Bulldogs $2,695,000.

That’s a $550,000 cut, and under terms of the amended contract the difference in that revenue stream will only get larger in future years.

A Fresno State spokesperson, addressing upfront expenses to activate and fulfill a naming rights partnership, said athletics would receive an additional $1 million in operational support from the university in 2022-23.

“This is an extremely important partnership for Fresno State and will be financially beneficial over the 10-year term,” university spokesperson Lisa Bell said in an email. “This partnership was strategically done with Fresno State and Fresno State athletics in order to provide a comprehensive approach to addressing important initiatives that align with both our academic and athletic priorities.

“In addition, over the next few years, there will be additional factors that will most definitely ensure an improved financial situation for Fresno State athletics beyond the immediate annual reduction of multimedia rights fees by Learfield due to the elimination of the healthcare category.”

But while Fresno State will receive $1 million in annual naming rights payments on Aug. 1 of every contract year, it could end up having to cover losses elsewhere it created. Without additional annual support, which could come from a number of sources, the athletics department stands to take a significant hit in media rights fees.

A sharp decline in media rights fees for athletics

Here are the details from the amended Learfield contract, obtained by The Bee through a public records request, comparing income before and after the Valley Children’s naming rights deal was approved in July by the California State University board of trustees:

2021-22

• $3,245,000
• $2,695,000
• -$550,000

2022-23

• $3,395,000
• $2,790,000
• -$605,000

2023-24

• $3,545,000
• $2,879,500
• -$665,500

2024-25

• $3,695,000
• $2,879,500
• -$815,500

2025-26

• $3,845,000
• $2,879,500
• -$965,000

The guaranteed rights fees in the final two years of the contract are locked in unless otherwise agreed to by the university and Bulldog Sports Properties in accordance with the amended contract; the parties are to meet no later than July 1, 2024 regarding an extension of their agreement.

The annual revenue from Valley Children’s Healthcare is to be split among health education with the university’s College of Health and Human Services and internships and scholarships that focus on healthcare professions with an emphasis on nursing, the amounts determined by the athletics department in consultation with university President Saúl Jiménez-Sandoval and Chief Financial Officer Debbie Adishian-Astone.

If the athletics department is made whole each year following the loss of guaranteed rights fees, the remaining revenue for those programs, as well as any renovations to Valley Children’s Stadium, shrinks considerably.

If the athletics department just receives a split of the annual naming rights payment, its operating budget is likely to take a six-figure hit with the loss of media rights fees.

Other Fresno State costs in Valley Children’s deal

The university under terms of the contract with VCH must also pay for the production and installation of the signage. It also is responsible for any maintenance and repair costs.

It included several perks in the deal, as well. Entitlements include:

A premium tailgating spot in the Red Lot outside Bulldog Stadium, with the university to cover the cost of tents, tables, chairs and lighting.

Up to 200 tickets to home football games.

One skybox suite for each home game including full catering up to $1,500.

Round-trip airfare for four on the team charter and four tickets in the best-available location for road football games.

A skybox suite sells for $35,000 to $40,000 per season, but a university source said Jiménez-Sandoval gave up one of his suites in the stadium to accommodate Valley Children’s Healthcare in the deal and it is not ticket inventory the athletics department monetizes.

The cost of a team charter will fluctuate, given the type of aircraft and distance traveled. But it already is paid for by the athletics department to transport the team, coaches and staff.

Impacts of naming rights exclusivity

As an example of that exclusivity in the naming rights contract, a competing healthcare entity can no longer so much as display any public-facing signage that advertises or promotes any product or service in any of the parking lots used for tailgating around Bulldog Stadium.

That exclusivity does not apply to Sierra Pacific Orthopedics, which provides medical and athletics training services to the athletics department.

The Central California Blood Center and Fresno County Department of Behavioral Health also are approved sponsors, but they cannot co-market with another health system in connection with the sponsorship.

Pacific Dental Services has approval provided if at any time a healthcare network were to take over the business/company there would be an immediate conflict and and the agreement would need to be terminated. It may not be affiliated with any healthcare system, and its signage and promotions must be limited to general dentistry; no dental surgery or pediatric dentistry.

The Terraces at San Joaquin Garden, a senior living center, is approved. But if it is sold or merged with a competing healthcare organization, the sponsorship would be terminated and not renewed.

Allstate insurance advertising, promotions or signage is restricted to its home and automobile insurance with no healthcare. Bayer may sponsor Fresno State athletics as long as it is not in partnership with its pharmaceutical division. It is limited to its crop services division.

Fresno State officials also agreed to give Valley Children’s Healthcare exclusivity not only at Bulldog Stadium, but at the Save Mart Center, Pete Beiden Field at Bob Bennett Stadium, Margie Wright Diamond, the soccer stadium and any other existing or future stadium, field or area on campus that is owned or controlled by the university.

That extends to home games or events of any tenant that plays in any of the sponsored athletics venues, including the Central Valley Fuego FC at the Fresno State soccer stadium.

The new signage at Valley Children’s Stadium

The deal includes illuminated signs on the scoreboard in the north end zone of the stadium, on the press box structure and on the back of the press box facing Millbrook Avenue, as well as a fixed sign on the base of the video marquee at the corner of Cedar and Barstow avenues.

The “Welcome to Bulldog Stadium” signage on the front of the press box at the former Bulldog Stadium, as well as the “Bulldog Stadium” lettering on the scoreboard were not illuminated.

There also will be signage at Pete Beiden Field at Bob Bennett Stadium and Margie Wright Diamond, at mutually agreed upon locations.

The signage will be produced and installed by Jones Sign.

Fresno State must also pay for removal of the signage at the end of the agreement on June 30, 2032, or later if the deal is extended.

This story was originally published August 12, 2022 at 10:04 AM.