The high yield-issuing budget airline spends north of $20m per year for the naming rights to the home of the Las Vegas Raiders, according to The Athletic.

The company (rated Ba3/B+/BB-) signed a 30-year contract in 2020, making its $600m total sponsorship deal the largest and most expensive of the high yield borrowers we identified with stadium naming rights. It even rivals SoFi Stadium’s $625m 20-year deal.

Allegiant’s per year cost for the naming rights represented about 17% of its $114m total sales and marketing spend last year.

Via The Las Vegas Raiders 

That’s not a terribly onerous deal for a company that has a liquidity position of over $1bn. Plus, just four years into that investment the stadium is landing the Super Bowl, which last year drew some 115 million viewers. 

Allegiant isn’t the only borrower shelling out money for naming rights. At least 38 stadiums across the US are adorned with the name of a high yield borrower, a cross-reference of stadiums with 9fin’s issuer database shows. 

We pulled what data we could on these companies’ stadium deals to compare them and find trends among the issuers. 

Like our previous breakdown of F1 sponsorships, it likely has very little real relevance to the company’s overall performance. But perhaps it’s a fun conversation topic over a basket of buffalo wings this weekend. 

Go long 

While the initial sticker price can be jarring, these deals tend to look much better as time goes on. 

For example, when Chicago’s United Center — home to the NBA’s Bulls and NHL’s Blackhawks — opened in 1996, United Airlines inked a $36m deal for 20 years. 

The $1.8m annual rate was quite steep at the time, but when it came time to renew the deal in 2014 the rate jumped to $5m per year. 

Similarly, Tropicana has one of the cheapest deals among professional sports with a $1m annual rate for the Tampa Bay Rays’ MLB stadium that was agreed to back in 1996. But, you get what you pay for, because Tropicana Field is widely renowned as the worst stadium in baseball.

HY borrowers sponsoring NFL, NBA, MLB, NHL and MLS stadiums. Data collected from The Athletic, Sports Pro Media, Sportico, Forbes and ESPN. 

That 30-year contract was agreed to when the orange juice brand was still part of PepsiCo’s portfolio. In 2020 the soda maker spun out Tropicana and its other juice brands in a $3.3bn sale to private equity firm PAI Partners. The naming rights deal carried over to the new ownership. 

It’s unclear if PAI would want to renew the naming rights deal amid plans for a new stadium. 

Of course, if you’re a billionaire you can just buy the whole team and use the side of the stadium to promote your own company for as long as you like at no additional cost. That’s the path Dan Gilbert took when he bought the Cleveland Cavaliers and named the NBA stadium Quicken Loans Arena (The Q), and then Rocket Mortgage FieldHouse. 

Down but not out

Mortgage lender LoanDepot and telecommunication company Lumen are the only two triple-C issuers with naming rights deals on major US stadiums.

LoanDepot’s corporate family rating was downgraded to Caa1 by Moody’s last year citing its “modest capitalization and weak profitability.” S&P affirmed its B- rating with a negative outlook. 

The company’s $10m annual rate for the naming rights to the Miami Marlins’ MLB stadium LoanDepot Park likely had very little effect on its credit ratings. 

LoanDepot’s naming rights deal is one of the more expensive among high yield companies, especially for an MLB park. However, the $10m a year would still only cover a third of LoanDepot’s interest expense on its lowest coupon debt — the $600m 6.125% SUNs due 2028.

Taylor Swift performing at Lumen Field in 2023 (via LumenField.com) 

Lumen is in the midst of a balance sheet reconfiguration through which it’s trying to extend around $9bn of debt coming due by 2027. 

The company pays $12m annually to have its name on the Seattle Seahawks’ stadium Lumen Field. That amount wouldn’t make much of a dent in the debt complex, and frankly, neither would the $108m remaining on the naming rights deal that extends to 2033. 

Strike three

It is possible to get out of these long contracts when things go sideways. 

Perhaps the most infamous example is the now defunct crypto exchange FTX, which bought the naming rights to the Miami Heat’s NBA stadium in 2021 in a 19-year $2m per year deal. But just two years into that agreement a bankruptcy judge terminated the deal. 

Now, IT and security management software company Kaseya owns the naming rights to the Heat’s stadium on similar terms to what FTX was paying. 

Kaseya notably priced a $3.7bn private credit deal in 2022 along with an investment from a trio of private equity firms to fund its $6.2bn acquisition of cybersecurity company Datto.

Via Kaseya

Other companies have inherited the naming rights through acquisitions. 

The Houston Texans’ home NFL field became NRG Stadium in 2014, five years after the Texas-based energy company bought Reliant Energy’s retail business. 

Likewise, Spectrum Center — the home of the NBA’s Charlotte Hornets — changed its name from Time Warner Cable Arena in 2016 after Charter Communications bought the company. 

Despite getting upgraded to investment grade in 2022, a new naming rights deal proved too expensive for Pittsburgh-based packaged goods maker Kraft Heinz. 

Insurance company Acrisure took over the naming rights for the Pittsburgh Steelers NFL stadium at $20m per year for a 15-year contract, tied with Allegiant for the most expensive annual rate. Acrisure priced a bond dealjust last month. 

In a press release at the time, Kraft Heinz said, “While we worked diligently with the Steelers for several months around a new naming rights deal, they found a new partner willing to pay significantly more than we could justify.” 

Too small 

If naming rights for a stadium of one of the four major US sports leagues — NFL, NBA, MLB, and NFL — proves too expensive, there are plenty of smaller stadiums to target. 

At least 21 high yield borrowers sponsor college football stadiums, minor league baseball parks and multi-purpose arenas around the US. 

This includes Bojangles Coliseum, home of the Charlotte Checkers minor league ice hockey team; Camping World Stadium, host of the Citrus and Pop-Tarts Bowls; and the KFC YUM! Center, home of the Louisville Cardinals’ basketball team. 

Inspire Brands with its many fast food properties sponsors two such stadiums: Dunkin’ Park, home of the Connecticut Hartford Yard Goats minor league baseball team, and Jimmy Johns Field, which hosts games for the United Shore Professional Baseball League in Utica Michigan. 

Caesars owns the naming rights to Harrah's Cherokee Center in Asheville, North Carolina which hosts several small events. But the company upgraded to the big leagues in 2021 with its naming rights deal for the Caesars Superdome in New Orleans. 

The Caesars Superdome will play host to Super Bowl LIX in 2025, followed by another high yield borrower when Super Bowl LX comes to Levi's Stadium in 2026. 

So while the defending champion Chiefs will have to win on Sunday, and next year’s Super Bowl to three-peat, the high yield market is already a heavy favorite to achieve that feat.