The name “AT&T Center” has referred to the home of Spurs basketball for 15 years now. But that is soon to change, as AT&T just decided not to renew its naming rights sponsor deal. That means that a new sponsor will be able to choose the name of the arena moving forward. Let’s take a closer look at this change and why it took place.
Why Did AT&T Decide Not to Renew?
AT&T has sponsored the Spurs for so long that younger Spurs fans may not even be able to remember a time before the arena was called the AT&T Center. So, to some fans, this news comes as a surprise. But to others, it is not unexpected.
It was Front Office Sports that broke the news about AT&T’s departure. Fletcher Cook, VP of corporate communications for AT&T, emailed Front Office Sports, telling the site, “This sale is a result of the ongoing strategic review of our balance sheet and assets to identify opportunities for monetization. We want to ensure that our assets support our overall strategy and areas of market focus. Where this is not the case, we transition them to owners who will provide incremental stewardship and investment.”
Front Office Sports also says that it spoke to “a source” that provided additional information. The first factor cited in that information is the company’s merger with SBC back in 2005. When that merger took place, the headquarters that previously were in San Antonio relocated to Dallas. AT&T is also a naming rights sponsor for the Dallas Cowboys. Indeed, the Cowboys play at the AT&T Stadium. The cost of that sponsorship is around $20 million per year.
The $2 million a year cost of the naming rights deal for the Spurs arena is not nearly as expensive. But it is still a lot of money, and it makes sense that AT&T would be looking to shave off the expense given the context for the decision.
Front Office Sports says, “Another factor is AT&T reassessing its debt load and looking for cost-cutting measures, a factor in a deal to merge its WarnerMedia unit with Discovery announced in May. “
AT&T Has Also Sold its Minority Stake in the Spurs
It is not just the naming rights sponsorship deal that AT&T decided to let go of. The company also opted to sell its 7% minority stake in the team. You might be wondering whether there is any connection to the news that came out on June 18th regarding billionaire Michael Dell and the Sixth Street investment firm purchasing a combined 30% stake in the team.
Indeed, the 7% stake that AT&T previously held did account for part of the stake purchased by Dell and Sixth Street. Read more about Dell and Sixth Street’s investment in the Spurs.
Even though AT&T is moving on from the Spurs, its investment in the team is one that paid off nicely for the company. According to estimates, the income from that investment may have totaled to around $125 million.
What Will the AT&T Center Be Called in the Future?
Despite this headline emerging today, it will be some time yet before the AT&T Center has to change its name. The contract with the company for naming rights will not expire until autumn next year.
So, with AT&T leaving, what company might take over as the naming rights sponsor? Spurs fans on Reddit have made a wide range of predictions, many of them humorous, some of them potentially logical. A couple of users pointed out that “Dell Center” might make sense, for example. But that is nothing but pure conjecture, and there are no reports at this time that Dell is thinking about making such a deal. To our knowledge, the Spurs have not yet located a new sponsor. If we hear any updates or rumors regarding a potential future sponsor, we will keep you in the loop.
Looking for other Spurs news? Spurs assistant coach Will Hardy is heading over to the Boston Celtics. Also, Becky Hammon was one of the finalists for the job of Portland Trail Blazers head coach. But the job went to Chauncey Billups, and Becky will be staying with the Spurs for the time being.