Louisville Arena Authority extends marketing deal
Learfield will pay the arena authority a guaranteed amount of $48.975 million over the ten-year term left in the deal, according to a summary of the agreement.
LOUISVILLE, Ky. (WDRB) – The Louisville Arena Authority has extended its contract with Learfield Communications to manage sponsorships for the KFC Yum! Center.
During a meeting on Wednesday, the arena board voted unanimously to retain Learfield until 2027, or seven years longer than the agreement that was to expire in 2020.
Learfield will pay the arena authority at least $3.75 million a year under the new deal, a yearly increase of $750,000 from current levels, according to a summary provided by arena officials. The maximum annual guarantee will be $5.35 million in 2027.
The contract extension was one of two agreements approved by the arena authority at a special meeting at which most members joined by phone. Public notice of the meeting wasn’t given until Tuesday evening – a violation of Kentucky law, which requires advance notice of 24 hours.
The arena authority, the board that oversees the Yum! Center’s finances, approved the agreements as it prepares to refinance debt on the project’s construction bonds. That step is an effort to avoid default as early as 2020.
In all, Learfield has agreed to provide $48.98 million over the 10 years left in the contract, including $1.63 million in funds that must be spent making capital improvements to the arena's "sponsorship components."
“I love the whole deal of them guaranteeing $47 million,” said arena general manager Dennis Petrullo of AEG. “I think that helps us with bonds and moving forward with everything financially. Perfect timing for it.”
Learfield’s current agreement allows it to contract directly with potential arena sponsors without the approval of the arena authority, although the board can decide whether to accept those deals.
Arena officials said they did not issue a request for proposals for the sponsorship agreement. The existing contract with Learfield allows an extension on an “exclusive basis” before September 30, 2019.
But according to the contract, the arena authority and Learfield had agreed to negotiate “with an objective” to extend the contract for three years, and not the seven years approved at Wednesday’s meeting.
William Summers V, the arena authority’s vice chairman, did not immediately respond to a phone message seeking clarification about the extension.
Plano, Texas-based Learfield also holds the multimedia broadcast rights for University of Louisville athletics.
The arena authority also approved spending $100,000 to hire Conventions Sports & Leisure International of Frisco, Texas, to conduct a feasibility study for the debt refinancing expected to occur later this year. The company’s work is expected to be finished by late summer.
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