Heinz to pay $57 million for name on stadium
H.J. Heinz Co., famous for its slogan '57 varieties,' will pay $57 million over the next 20 years to put its name on the new Pittsburgh Steelers and University of Pittsburgh Panthers football stadium on the city's North Shore.
The team has scheduled a news conference for 10 a.m. today at the stadium to announce the deal.
Expected to be in attendance are Steelers Vice President Art Rooney II, National Football League Commissioner Paul Tagliabue and Heinz Chairman William R. Johnson, who is the son of former Cincinnati Bengals head coach Bill 'Tiger' Johnson.
Last week, Heinz rechristened the former Gimbels building Downtown as the Heinz 57 Center to serve as the headquarters for its North American business unit.
Could 'Heinz 57 Stadium' be next⢠The stadium name will be revealed today.
If so, Steelers reserve linebacker John Fiala, who wears No. 57, could find his endorsement prospects on the rise.
Aside from the name, the deal calls for exclusive use of Heinz ketchup and condiments within the new stadium.
The naming-rights deal - which averages $2.85 million per year - is favorable for Heinz compared to other NFL naming-rights deals and carries the bonus of having a college football team playing there to increase exposure on Saturdays, when most college games are played.
The richest NFL stadium-naming deal belongs to the expansion Houston Texans, who will enter the league next year. Houston-based Reliant Energy will pay $320 million - nearly $10 million a year - over 32 years for the privilege.
In January, the Denver Broncos sold the rights to its new stadium, currently under construction, to financial-services company Invesco Funds Group for $120 million over 20 years, or about $6 million per year.
The North Shore stadium deal will add spice to Heinz's marketing campaign.
The company, ranked No. 199 on Fortune magazine's list of the largest U.S. corporations, recently beefed up its marketing budget to support a grocery cart of new products, such as EZ Squirt green and red ketchup for children; Jack Daniels Grilling Sauces; Mr. Yoshida's Asian Sauces; and StarKist tuna in a pouch.
Heinz yesterday reported a net loss of $170 million for its fiscal fourth quarter ended May 2. The company blamed weak foreign currencies and sinking tuna and pet-food sales, coupled with rising energy and marketing costs.
For the full fiscal 2001, Heinz reported net income of $495 million vs. net income of $890 million in fiscal 2000. Sales reached $9.43 billion vs. $9.41 billion in the prior year.
Heinz spent $2.4 billion on its various marketing initiatives last year. The amount it will pay for the naming rights is about 0.3 percent of its marketing budget. Yesterday, Johnson said the marketing expense for the most recent quarter increased 20 percent.
Recently, Heinz has turned to sports personalities to help market products, signing former basketball great Larry Bird to promote its Boston Market line of frozen meals. Targeting teens for its Bagel Bites frozen snacks, Heinz tapped skateboarding legend Tony Hawke.
Beer and soda companies, along with banks and telecommunication companies, have their share of stadiums bearing their names. But Heinz will become the first food company to move to the gridiron in a major stadium naming-rights deal.
The deal should help the Steelers pay for escalating construction costs.
Steelers President Dan Rooney told the Pittsburgh Tribune-Review two weeks ago that construction costs for the stadium are climbing to nearly $300 million. Original projections pegged the cost at $225 million, but a heating system under the field and elevators to the upper deck have added to the expense.
Heinz will have only a few months to gain traction from the naming deal before the new stadium hosts its first game Aug. 25, when the Steelers play the Detroit Lions in a preseason game.
PNC Bank agreed to pay $30 million over 20 years for the 'PNC Park' name in 1998 - nearly three years before the Pirates' new home opened. Every news story about the stadium during that time put the PNC name in play.
Mellon Bank agreed to pay $18 million over 10 years for the 'Mellon Arena' name in December 1999. That deal was announced early in the Penguins season.
The biggest early payoff for Heinz will occur Sept. 16, when the Steelers play the Cleveland Browns in a nationally televised game at 8 p.m. on ESPN.
After not having a home Monday Night Football game last year, the Steelers return to the ABC telecast Oct. 29 against the Tennessee Titans. A Nov. 4 game against the Super Bowl champion Baltimore Ravens will be broadcast nationally at 4 p.m. on CBS.
Michael Yeomans can be reached at myeomans@tribweb.com or (412) 320-7908.
