🔒Hartford Athletic eyeing Dillon Stadium naming-rights deal as key to future profitability

In an effort to offset steep startup costs, the one-year-old Hartford Athletic soccer club is looking to monetize its last untapped revenue source: Dillon Stadium.

The Division II professional soccer franchise, part of the United Soccer League (USL), is shopping the naming rights of the newly revitalized, 5,500-seat stadium to potential sponsors as it works to achieve profitability by 2022.

Team owner Hartford Sports Group, led by chairman and co-founder Bruce Mandell, secured future revenue generated by stadium naming rights in a 2018 agreement with the city of Hartford and quasi-public Capital Region Development Authority (CRDA), which oversees stadium operations.

A consultancy that specializes in calculating sponsorship opportunities recently valued the stadium’s naming rights at $432,000 a year.

That level of annual funding would be a major haul for the startup franchise, which fell shy of its attendance goals during its inaugural season and generates a third of its revenue from sponsorships, according to Mandell, who is also CEO and owner of Newington direct-mail company Data-Mail Inc.

A potential naming-rights deal, which Mandell hopes to ink by year-end, is also crucial because the franchise has forecasted that revenue in future budgets.

“It needs to get done, this is built into our plan,” he said in a recent interview. “It’s extremely significant in terms of building stability into the operation side of a club. It’s the kind of boost that allows you to do more for your fans, improve the overall experience and add to the stadium.”

Hartford Sports Group hired global consultancy IEG to estimate the value of Dillon’s and other nearby stadiums’ naming rights.

As part of its analysis, IEG valued the naming rights for Dunkin’ Donuts Park and XL Center at $500,000 each, but those two venues provide additional seating and host more ticketed events per year. (The true value of naming-rights deals for the XL Center, sponsored by Bermuda-based insurer XL Catlin, and Dunkin’ Donuts Park, supported by Mass.-based restaurant chain Dunkin’, are not publicly disclosed.)

Compared to other USL stadiums, the fair market value of Dillon’s naming rights is 22% higher than the league average of about $366,000.

There are currently only nine USL teams, or about a quarter of the league, that are the primary tenant of a stadium with a naming-rights sponsor.

The Athletic’s founding sponsors — including Trinity Health of New England, Travelers, The Hartford, Cigna and Stanley Black & Decker — are getting the first opportunity to bid on Dillon’s naming rights, Mandell said.

Those companies already generate more than $1 million a year for the Athletic, and have each renewed their commitments for 2020, Mandell said.

But the club, he said, is also welcoming small and midsize sponsors as well.

“In many ways sponsors are the key to bringing professional soccer and Dillon Stadium up as a community asset,” Mandell said.

Dillon naming rights package

Nationally, stadium naming rights is big business. Dozens of big-league venues home to NFL, NBA, NHL and MLB tenants reap hundreds of millions of dollars from naming-rights deals that span decades.

Although the Athletic is a second-tier professional sports franchise, a naming-rights deal for Dillon could be lucrative because it’s a historic venue that hosts a variety of community events beyond the USL season, Mandell said.

Dillon, host over the years to rock concerts by The Rolling Stones, The Grateful Dead, Kiss and The Beach Boys, will house at least 17 home matches for the Athletic and another 80-plus community events in 2020. Athletic games will also broadcast live on WTNH News 8/MyTV9 and on subscription service ESPN+.

The stadium, built in 1935 and overhauled last year for roughly $14 million, will also offer prime signage viewable from Interstate 91 and the Colt Gateway on Huyshope Avenue.

A naming-rights partner will also be able to access potentially hundreds of sponsorship assets including media inclusion, ticket signage and field and print advertisements. They could also mark their presence on a video scoreboard the club plans to add for the 2021 season, in addition to other branding opportunities tailored for a prospective sponsor, Mandell said.

Jim Burda, the team’s new CEO, will be tasked with capitalizing on these sponsorship opportunities.

“I think the exceptional part of this opportunity is that it’s both a branding sports play and a deep community play,” he said. “The utilization of that stadium is going to go way up. As you get more utilization, the value of the stadium continues to increase.”

Forecasting the market

If history is any indication, the Athletic may be able to reap a naming-rights deal worth more than the $432,000 value estimated by IEG, according to Peter Laatz, IEG’s global managing director.

Laatz said his firm over the last four decades has helped the sponsorship industry estimate prices for various assets, including stadiums and arenas.

IEG market valuations are heavily reliant on a database of nearly 200,000 active sponsorship deals that help track where dollars and deals are trending globally.

On average, stadium/arena operators receive more naming-rights revenue than IEG forecasts due to competitive bidding, he said.

Certain sponsors end up overpaying to block competitors in a regional market, while others are willing to overpay to meet a business need, Laatz said.

There’s currently a high level of naming-rights turnover in the U.S., Laatz said, because of changing market and stadium conditions and new corporate leaders working to cut costs.

Other term lengths are being altered due to bigger brands moving out of this space, and more municipalities getting involved with oversight of stadiums and arenas.

The bottom line of any deal is important, but it’s not the only thing the Athletic should be concerned about, he said. Sponsors engaged in promoting a facility are often better naming-rights partners.

Laatz said Dillon has a unique brand to leverage because of its historic appeal. But any deal the Athletic signs will be driven by its sales team.

“The Dillon piece is interesting because it’s a storied venue that has an interesting history behind it,” he said. “It’s an interesting brand to harness.”