A rendering shows the interior of Fusion Arena, expected to be open in Philadelphia in early 2021. (Courtesy Comcast Spectacor)

Comcast Spectacor seeks seven figures annually for Fusion Arena deal

Spectra officials are marketing a 10-year naming-rights deal with annual value in the low seven figures for Fusion Arena, a 3,500-seat esports facility to be built in Philadelphia and the first of its kind to be constructed from the ground up in the U.S.

Ten brands are interested in naming rights, covering both local and national firms in esports technology and other categories, said Bryan Furey, senior vice president of partnerships for Spectra, the facility management services group owned by Comcast Spectacor.

“Our goal is to have a deal done by the end of this year,” Furey said. He would not identify any of the brands he said were showing interest in the deal.

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The financial terms proposed by Spectra are on par with a founding partner of an NFL stadium, making them big numbers for an area of sports marked by explosive growth but yet to be considered among the top leagues. One naming-rights broker said it may be too much to expect, given the uncertainty over how esports as a spectator event will evolve.

“It’s new and it’s exciting, but nobody’s figured it out yet,” said Chris Allphin, senior vice president at Van Wagner Sports & Entertainment.

The $50 million Fusion Arena project is a partnership between Comcast Spectacor and developer The Cordish Cos. The arena will sit next to Xfinity Live!, the entertainment district run by Cordish at the Philadelphia Sports Complex. The complex encompasses Wells Fargo Center, home to the NHL’s Flyers and NBA’s 76ers (Comcast Spectacor owns the arena and the Flyers); Citizens Bank Park, the MLB Phillies’ ballpark; and Lincoln Financial Field, where the NFL’s Eagles play.

Construction starts in September on the esports venue, which is expected to open in January 2021, said Dave Scott, Comcast Spectacor’s chairman and CEO. The arena will be home to the Philadelphia Fusion esports franchise, one of 20 international teams competing in the Overwatch League. The plan is to book up to 150 events a year among Fusion home matches, amateur esports, concerts, graduations and corporate events, Scott said.

Electronic dance music shows, for example, would be a natural tie-in to the younger demographic attending events at Fusion Arena, said John Page, Spectra’s president of venue management.

Fusion Arena, designed by Populous, will feature 300 club seats, three suites and 12 loge boxes. Most of the premium seats will be part of sponsorship packages, officials said.

Overall, the growth in the esports space domestically presents a new opportunity for big league teams developing these venues to create additional programming as well as sell major sponsorships to those facilities.

Naming rights is one example. In November 2018, HyperX, the gaming division of Kingston Technology, signed a multiyear naming-rights deal for an esports venue inside the Luxor Hotel & Casino in Las Vegas. Terms were not disclosed.

In Arlington, Texas, esports consultant Abacus3 was hired in June to sell naming rights for the Esports Stadium Arlington, a 100,000-square-foot retrofit at the Arlington Convention Center. The $10 million facility opened in November near Globe Life Field, the Texas Rangers’ new ballpark opening in March, and Texas Live!, another Cordish-operated entertainment district.

In Philly, the proximity of Fusion Arena to the city’s three big league buildings as well as Xfinity Live! will help drive the value of naming rights, but ultimately, it’s the global appeal of esports through live streaming of those events by Amazon-owned Twitch and other digital outlets that will attract the high-end sponsorship dollars, said Eric Smallwood, president of Apex Marketing Group.

“The international component is huge,” Smallwood said. “The biggest thing is the broadcast play with viewing and replays. It’s going to take the right company that has interest at a level beyond Philadelphia and Pennsylvania.”

Setting terms is an issue considering there are so few benchmarks. Spectra researched esports team sponsorships to get a better idea for the potential value of Fusion Arena naming rights, Page said.

At this point, though, the esports industry appears to be flush with cash.

All told, the global esports economy is projected to surpass $1 billion in 2020 with endemic brands such as HyperX, Intel, Red Bull and Monster Energy increasing their exposure along with nonendemic brands such as Geico and Tinder, according to a report by gaming analytics company Newzoo. They’ll reach an esports audience growing to more than 500 million over the next two years, the report said.

Comcast Spectacor is bullish on esports. To promote the activity, Wells Fargo Center will play host to the Overwatch League 2019 Grand Finals on Sept. 29. Last year’s event, spread over two days, drew about 22,500 attendees at Barclays Center.

Separately, Comcast Spectacor has formed T1 Entertainment and Sports, a joint venture with SK Telecom, South Korea’s largest mobile operator. Pending government approvals over several jurisdictions, the two entities will share ownership of multiple esports teams overseas, including a League of Legends franchise.

South Korea is the hub of esports worldwide, and the League of Legends team, one of esports’ top clubs, could potentially compete in the U.S. in the future, said Phil Weinberg, Comcast-Spectacor’s executive vice president of administration and general counsel.

“SK is almost a mini-Comcast,” Scott said. “They have cable and internet customers. We connected pretty well with them.”

In addition, Comcast Spectacor recently invested in N3rd St Gamers, a Philly firm that stages amateur esports events. They’ll work together to organize a few events at Wells Fargo Center during Flyers and Philadelphia Sixers games as another promotional tool for Fusion Arena.

“The Sixers have their NBA2K product that they would play during their games and we have an NHL esports product that we would play during our games,” said Valerie Camillo, president of business operations for the Flyers and the arena. “We’re still working on the business model right now, but we see that as an emerging trend.”

Those events follow similar esports activations at Wells Fargo Center during the games of the Philadelphia Wings, a National Lacrosse League team, and by Major League Soccer’s Philadelphia Union, which plays at Talen Energy Stadium, which is run by Spectra.

Editor’s Note: This story has been updated since it was originally published.