UBS Acquires Naming Rights For Islanders Arena In $300M-Plus Deal
Courtesy New York Islanders – UBS Arena
The New York Islanders’ new arena is part of a redevelopment of historic Belmont Park.
Oak View Group has signed UBS, among the world’s biggest investment banks, for naming rights to the New York Islanders arena at Belmont Park. The deal for UBS Arena is valued at more than $300 million over the course of the 20-year term, according to industry sources.
OVG, the arena developer and the Islanders’ sales agency, is a partner in the arena project with the NHL team; Sterling Project Development, owned by the Wilpon family, owner of the New York Mets; and Value Retail Management, whose founder and chairman is Islanders co-founder Scott Malkin. (OVG also owns VenuesNow and Pollstar.)
The $1.5 billion arena, designed by Populous and built by AECOM Hunt, extends to a mixed-use project next door that features a high-end retail village developed by Value Retail. The arena, which went through several weeks of construction delays after work shut down because of COVID-19, remains on track to open in fall 2021, said Peter Luukko, chairman of OVG Facilities, the group that will operate the facility.
The mixed-use elements will come online in future years.
It’s the second naming rights deal OVG has signed over the past month for an NHL facility, following Amazon’s agreement for Climate Pledge Arena, future home of NHL Seattle. Due to the financial services category and the location in the country’s biggest market, the total value of the UBS Arena deal is greater than the one for Climate Pledge Arena, which is valued at $300 million to $400 million. Several benchmarks need to be met to reach $400 million in the Pacific Northwest, sources said.
In both cases, the agreements stand out as the two biggest naming rights deals for NHL venues by a wide margin. Based on OVG research, the value for naming rights for NHL-only venues is in the neighborhood of $5 million annually, company officials said. Doing the math, both Belmont Park and Seattle average $15 million a year.
“It shows we’re going to get this industry back on its feet,” said Tim Leiweke, Oak View Group’s co-founder and CEO. “These two companies have faith in our ability to create safe facilities and that there’s going to be a huge demand for live entertainment. This is as good a definition and vote as we’re going to have on the future of our industry. We will prevail and get back on our feet next year.”
Apart from the marketing component, UBS could potentially help finance OVG projects, Leiweke said.
“They see a company that’s building some of the biggest arenas in the world, all at the same time,” he said. “They see our logic and implementation on these projects and they have a high degree of comfort that they want to grow with us. They’re one of the best banks and brands in the world, and what has been clear in this negotiation leading up to this agreement is we want to grow with them in more ways than just creating (UBS Arena) together.”
It’s the first naming rights deal for UBS, which doesn’t do many sponsorships in sports and entertainment, said Dan Griffis, president of OVG Global Partnerships. In Formula One racing, UBS sponsors the Mercedes-AMG Petronas team, which features Lewis Hamilton, one of the sport’s most successful drivers. Outside of sports, UBS has its name on Art Basel in Miami Beach, among the world’s premier art festivals.
The bank has been searching for an anchor in New York to grow its lines of business, Griffis said. The agreement covers multiple exclusives in financial services and includes an opportunity to build a bank in the retail village, but that’s not its primary focus. As wealth managers, UBS executives’ vision is to use the arena’s premium spaces, such as the UBS Club opposite stage end, to entertain and network with potential clients, he said.
UBS Arena is situated in a section of New York with 10 million residents, counting Queens, Long Island and parts of Connecticut. On its own, it would be the NHL’s fourth-largest market, Leiweke said. OVG projects the arena will become one of the 10 busiest concert venues in the world, which is part of the attraction for the bank.
“Their data is specific in terms of how many high-net-worth individuals there are in the tristate area,” Griffis said, “not to mention they can leverage the (arena) globally, based on the influence New York has when clients come to the city from all over the world.”
They should have plenty of events to choose from in addition to hockey. OVG hopes to ramp up concerts at UBS Arena around Thanksgiving 2021 after the hockey season starts. It all depends on the situation revolving around the pandemic, said Irving Azoff, the company’s co-founder and head of Azoff Music Management. Artists could potentially play multiple-night runs at Belmont Park, similar to Madison Square Garden.
“We think it’s a separate and distinct market from Manhattan and will complement what’s at the Garden nicely,” Azoff said.
Long term, the UBS deal is about economic redevelopment and putting New Yorkers back to work after an increase of 300,000 unemployed laborers in June, according to the state Department of Labor. Combined, the arena and mixed-use development are projected to generate 10,000 construction jobs and 3,000 permanent positions, officials said.
“Like us, they want to get the economy going and put people back into jobs,” Leiweke said. “They want to help.”
UBS negotiated the deal in-house through an experienced sports marketer. Johan Jervoe, UBS group chief marketing officer, cut his teeth in the U.S. running global sponsorships for McDonald’s, where he worked for 23 years, and later Intel, before joining the bank.
Jervoe was on vacation in Switzerland this week and was unavailable for comment.
In addition to Leiweke and Griffis, Evan Levine and Tom Cerasoli worked on the deal for OVG with assistance from Christina Song and Randi Bernstein with the firm’s legal department.
The genesis of the deal goes back four years. Over his career, Griffis had developed relationships with some UBS executives. One night, he had dinner in Los Angeles with Ryan Dietz, the bank’s senior vice president of wealth management, and they got to talking about why UBS did not have a greater stake in sports marketing. That’s where the discussion first started. Two years later, UBS was a guest of OVG at the 2018 Grammy Awards at Madison Square Garden, which became the jumping off point for talks over potential naming rights at Belmont Park.
The talks turned serious in October 2019, Griffis said.
For OVG, the category made sense, considering most naming rights deals in New York and New Jersey are tied to finance-related institutions, such as those at Barclays Center, MetLife Stadium and Prudential Center. At MSG, JPMorgan Chase’s sponsorship of arena spaces surpasses the value of most naming rights agreements.
On his own, Griffis has worked on eight naming-rights deals extending to his tenure as Target’s vice president of marketing. At OVG, he’s completed four agreements over the past nine months. There hasn’t been a better one as it relates to two parties coming together that understood the beneficial outcomes, he said.
“This one worked harmoniously across all (three) organizations,” Griffis said. ‘It was a real orchestra. We may have been the violin and the Islanders the bassoon and UBS was the percussion. We played real well together. Everybody knew how to play their instrument and we put this deal together in a reasonable amount of time, regardless of the noise outside with the pandemic.”