Naming rights at Memorial Stadium sell for $18m

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Cal’s athletics department announced the sale of field naming rights to mobile gaming company Kabam. Kabam is working on a new logo that will be unveiled next spring. Photo: Lance Knobel

In 2001, Michael Li took Engineering 110, Venture Design: The Startup Company, at UC Berkeley. As part of the course, Li wrote a business plan for a new company. Today, Kabam, the mobile gaming company Li founded with two other Cal grads, and the university unveiled a 15-year, $18 million agreement for naming rights to the field at California Memorial Stadium.

“This is a great Cal story,” said athletic director Sandy Barbour. “It’s an opportunity for us to form a unique academic and athletic partnership. We’ve hit a home run here.”

According to Barbour, the deal is the largest in the country for college field naming rights. The University of Maryland sold naming rights for the field at its Byrd Stadium to Chevy Chase Bank for $20 million, but that was over 25 years.

“I can’t imagine a closer tie for a CEO with the alma mater he loves,” said co-founder and CEO Kevin Chou, who majored in business at UC Berkeley and graduated in 2002. 

Kabam co-founders and Cal grads Kevin Chou and Holly Liu. Photo: Lance Knobel

Kabam co-founders and Cal grads Kevin Chou and Holly Liu. Photo: Lance Knobel

The agreement between Kabam and the university extends beyond the field naming rights. The funds also go to a scholarship and internship programs, speaking engagements, and other partnerships on the campus centered around innovation and technology. Kabam will also pay for football tickets for 500 veterans and their families each season, in recognition of the stadium’s origin as a memorial to Californians who gave their lives in World War I. In addition, Cal Athletics will as a result of the deal donate $25,000 to the University Library annually.

According to John Wilton, vice chancellor for administration and finance, the university has a detailed process involving administration, faculty, students and staff when it considers any naming rights. The Kabam proposal, he said, was approved unanimously.

“We set out to find the right partner to help us pay for these wonderful new facilities,” Wilton said. “We wanted to do it in the right way. We wanted a company we could form a broad relationship with, a relationship that could extend far beyond athletics. We hoped to find a local company with strong ties to innovation and technology. We think we’ve found all those things.”

Both Wilton and Barbour answered a firm no to questions on whether naming rights to the stadium were up for discussion.

The university spent $321 million to renovate Memorial Stadium and make it seismically safe. It funded that work and the $153 million for the adjacent Simpson High Performance Athletic Center with $445 million in debt. The plan is to pay off the debt with a combination of premium, long-term seat sales, philanthropy, facility rentals, new media revenues and investment revenues. Seat sales have lagged initial plans, but Wilton said there is now $54.7 million in the stadium endowment, which is $2 million ahead of expectations set a year ago.

“We’d be doing this arrangement irrespective of whether we had the debt,” he said. “We’d love to fund athletics in a more robust manner.”

Wilton said that while Cal had one of the largest athletic programs in the country, the dollars spent per student is among the lowest.

“Our program would have ranked between Germany and France in terms of medals won at the last Olympics,” Wilton said. “The program excels. It’s 29 sports; it’s not just football.”

Wilton was also asked whether the Kabam deal was indicative of a stronger connection for the university with technology companies started by Cal students and faculty.

“There’s a university not far from here in the private sector,” Wilton said, “and where they’ve excelled is in publicity. Graduates from Berkeley have started many companies, but we haven’t been very good at publicizing it. We’re going through a massive rethink on how we foster innovation on campus. We think we should be a lot more helpful in that process and hopefully facilitate them giving back to the campus in the long run.”

Kabam was originally founded to write Facebook apps, but four years ago it shifted its focus to free-to-play games for “traditional players” — mostly males. It has been ranked by Deloitte as the fastest growing Internet media company in the Bay Area for the last two years and the 17th fastest growing company overall in the country. Revenues this year are expected to exceed $325 million, annual growth of 80%. The company employs 700 people, with its headquarters in San Francisco and a major development studio in Beijing, which is led by Li.

Chou, Kabam’s CEO, was asked in the press conference what kind of fan he’d been as an undergraduate. “Did you sit on your hands?” a reporter asked.

“When I was an undergraduate, we stood the whole game,” Chou replied. “Now I go to one or two games a year. I’m not a season ticket holder.”

“You are now,” Barbour said.

Related:
Cal Memorial Stadium unveiled after 21-month renovation (08.27.12)
With Stadium reopening near, Cal revamps ticket sales (08.07.12)
Old Cal Memorial Stadium for sale, one bleacher at a time (06.27.12)
Final section of press box is installed at Memorial Stadium (10.13.11)
UC Berkeley’s best work on renovating Memorial Stadium (09.09.11)
Inside Berkeley’s newest, most discreet building (08.08.11)

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  • Jimmyriddle

    Can we set aside some of that money to buy out the contracts of Sandy and Sonny!

  • G

    Can we keep the Oregon cal game at cal and not at Levis stadium. it is a lose lose for the city of Berkeley and the state of California to move the game. also why did berkeley side not pick up this story?

  • http://www.berkeleyside.com/ lknobel

    You’re probably right that we should have covered that. It’s one we missed.

  • Alina

    For the uninitiated – would a sportsball person please explain how field naming rights are different than stadium naming rights? Won’t games still take place at Memorial Stadium? Will there ever be a need to talk about Kabam Field? How will Kabam get the exposure?… Or maybe their name will be painted on the turf or something… Thanks!

  • CalGuy

    They are getting some signage on the inside wall adjacent to the field, and something on the actual turf. The stadium itself will still be called Memorial Stadium e.g Pete Newell is the name of the court at Haas Pavilion (basketball). But just as everyone still calls it Haas, so shall everyone continue to refer to the stadium as Memorial. I’m assuming the scholarships they’re funding as well as the yearly $25k library donations they have pledged will also bear the company name.

  • susankl

    The news about Cal’s football players failing to pass many (or most?) or their academic courses was depressing. How about some of this largesse going to training football recruiters to select young men who are good students as well as good athletes (!) — or to supporting academic assistance for Cal football players?

  • Andrew D

    Sandy should simply be fired for incompetence outright. Breach of contract for the abysmal graduation rates on her watch. Shameful. Her op ed in the chronicle the other day was a complete joke.

  • CalGuy

    The recent figures were for students who entered the school between 2003-2006, Those players are now gone. The numbers for this new round in 2012-2013 estimate a major spike in grades per the NCAA. The last semester the team posted the highest GPA of the last decade. When you hear numbers, keep in mind there is a major lag in reporting. As for more academic support, the department has since doubled its academic support staff and is hiring more, in fact there is a current job posting if anyone qualified is interested.

    But overall, more progress is need in all areas. Financial support by successful alumni such as this gentlemen is a step in the right direction.

  • guest

    Players who failed to graduate in recent years should be offered a second chance now at getting a degree. They may need it!

    If you start in athletics, and get cut from the team, say by injury, do you lose your athletic scholarship? It is not clear to me how such people are counted in the statistics. If you rely on an athletic scholarship to pay the $25k is costs to go to Cal each year, and you lose that scholarship, it seems like you are not likely to graduate. I think student athletes should be able to complete their degrees, even if they have a career ending injury. Not everyone can stay on the team for 4 years. Not everyone can graduate in 4 years.

  • George Beier

    I know this is heretical, but… can we just return to the old days? When Cal football sucked and we cared about, I dunno, education? Did we have to have a big team, big stadium, big (money losing) operation? So now we have to prostitute ourselves for naming rights? Good grief.

    There are plenty of other football powerhouses out there. Let’s specialize on becoming an academic powerhouse. Teach us how to think, Cal, not throw a ball. That’s what us citizens are paying for.

  • John Seal

    Hear, hear. I’m disgusted by Cal’s continuing descent into the pustulant pit of privatization.

  • Really?

    The academic side seems to be doing quite well, just about every academic ranking in the last few years has Cal collectively at the highest the school has ever been ranked. More applicants than ever before, and more selective than ever before. BTW, football is one of two sports that actually turns a profit, something it didn’t do in the “good old days”.

    Not to mention that these two quotes are actually at odds with each other:

    “that’s what us citizens are paying for” and “Cal’s continuing descent into the pustulant pit of privatization”. Considering it’s because there’s less public funding (lowest in history!) that Cal is looking to silicon valley. You can’t have it both ways.

  • Really?

    Also, it appears that the school is teaching a lot of people how to think. So much so that it has become the 2nd highest producer of VC backed entrepreneurs http://blog.pitchbook.com/top-universities-producing-vc-backed-entrepreneurs/

  • guest

    Dude, my kid is a freshman at Cal, I aint rich, his tuition is $12k / semester, his dorm is $12k semester, and he is wait-listed for the class he needs next semester. It aint doing well.

  • Really?

    Your freshman son is wait listed for one class at his elite public university? Real tragedy. Fortunately your kid will graduate with an average student loan debt of only 16k, lower than the national average. Also, dorm living is optional. If you “aint rich” opt for something more realistic. But be prepared to pay for Bay Area rental prices.

    Lastly, tuition is 12k per year for instate students, not sure why you would lie when this information is public. Now, if you’re saying that you sent your out of state student here, well then yes, it is expensive, obviously. Furthermore, Cal offers more financial aid and a lower @ graduation loan debt than its peers in UCLA, Michigan, Virginia etc. All schools it’s also ranked ahead of academically. So in other words, yours is not an example for why “It aint doing well”.

  • George Beier

    Cal football turns a profit? That surprises me…if there’s some kind of P&L or cash flow statement or something like that on the Cal football operation, I’d love to see it.

  • Doug F

    In general, students on athletic scholarships don’t lose them if they get a season-ending or career-ending injury. But that’s up to school policy, I think, & not an NCAA rule.

  • Doug F

    You’re right. When I went to Cal (’71-3), state funding was 50% of UC’s budget. Now it’s a scandalous 10%. Last I heard, the Cal biz school was about to go private, finding the trivial amount of money it got from the state not worth all the hassles.

  • Doug F

    Get him outta the dorms & into the Berkeley Student Coop. Costs half as much, he’ll meet more interesting & intelligent people, & he’ll develop a much-needed work ethic from the 5hr/week of actual work he’ll have to do. I wouldn’t have traded my experiences in the coops for anything.

  • guest

    Welcome to the scam of D1 sports.

    No public institution should be involved in this. I don’t care how the number crunchers justify it, public funds are being spent on this nonsense and it needs to stop.

  • Just Sayin’

    The Coops now are a lot different than the Coops of your day.

  • guest

    Ugh, embarrassing typo. I meant the tuition is 12.5k / year and the dorm is another 12.5k / year. Yes, he is on his way to the coops, but there is a wait list for that too, so essentially the dorm is required for a while. And there is a shortage of dorm space this year, so he is crammed in a triple. The availability of classes is a real problem, it is not just 1 class that he is wait-listed for. Lots of kids seem to end up needing to do summer semester to get needed classes, which adds another $5k to your yearly expenses. I’m pretty sure Cal will be getting checks from me of around $30k by the time the first year is over. Waaayyy too much. When I was a kid, I worked and paid my own way. The annual budget was less than $10k. Now that is completely impossible. There is no way to get $25k / year on summer & vacation work anymore. I would like to see some commitment from the university to reduce costs. Cheaper housing, less football, reduced edifice complex, more tax support.

  • Really?

    Cal football not only turns a profit, but so does basketball. And that in turn pays for much of the rest of the athletic department. The department recently released a report by two professors Rhodes & Jacobsen I believe, which break it down if you’re interested. Back in the good old days, a much larger chuck of uni money was spent on sports than it is now.

  • Really?

    I’m guessing a lot of things are twice or three times more expensive than when you were a kid. That said, Cal having a football team has nothing to do with it. Cal football does not raise your tuition dollars considering it pays for itself. Cal also cannot lower the cost of living in Berkeley. If you want cheaper dorm housing, it will be subsidized somewhere, i.e someone will pay for it, and it sure as hell wont be the sate. Along that line, Cal cannot chose to tax the state more to lower your son’s housing costs. But again, the most important factor which I’m sure you already knew is that it is ultimately cheaper than its public peers, as I mentioned above.

    You want better/more dorm facilities? Who’s paying? The state? Raise Tuition? No, they’ll have to “whore themselves out” to private companies who will front the building costs going forward.

    Either way, if you were to cut something like football at any of the major public schools, get ready to lose a lot of donor money, as it has been proven time and time again that athletics is the main driver for donor gifts, even to the academic side. e.g. the name of Cal’s basketball arena also happens to bear the same name as its prestigious business school. The name of the new athletic facility is of the same person who’s major gift spearheaded the new Art Museum. Berkeley’s new $20 million Design and Innovation Institute was funded by another major athletics booster And with minimal funds from the state, where do you think Cal would make up the lost revenue from donor gifts? Your son’s tuition money.

    BTW, Cal receives more funds from gifts/endowment monies than it does from the State of California for it’s yearly budget. There’s a select group of very wealthy donors whose gifts/investments do more collectively to pay for your son’s school than the entire state of CA. But yes, that’s somehow Cal football’s fault.

    Finally, how much of its yearly budget do you think Cal spends on the entire athletics dept each year? 6%? 5%? 2%? It’s .001%. And to be clear, that is for the entire athletic department, not football, which pays for itself. How much of its budget do you think Cal gets from donors who want and support Cal football? A LOT more than that. Exponentially.

    That’s not to say that Cal is some utopia, because it has plenty of problems. But to do away with athletics would be catastrophic to the entire university. It’s time to wake up an accept the new reality, given the embarrassing disinvestment in higher public education from the state, calling Berkeley a state school is laughable. And that has nothing to do with football.

  • Embarrassing

    If Cal can secure more silicon valley money, the entire university should do the same. Better that they secure more of their own funding since they have the means, and let the rest of the UC split its small share. It would be a big help to schools like UC Riverside, Merced, Irvine etc.