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Soccer's Union to kick off a deal with PPL

Last summer, when representatives of the Philadelphia Union first approached PPL Corp. about a stadium naming-rights deal, executives at the Allentown energy company weren't exactly lit up by the idea.

The Union will officially announce today that their new stadium will be called PPL Park. (Tom Gralish/Staff file photo)
The Union will officially announce today that their new stadium will be called PPL Park. (Tom Gralish/Staff file photo)Read more

Last summer, when representatives of the Philadelphia Union first approached PPL Corp. about a stadium naming-rights deal, executives at the Allentown energy company weren't exactly lit up by the idea.

Soccer? An expansion team? Playing in Chester?

"It took some time to sink in," said L. Gene Alessandrini, senior vice president at PPL EnergyPlus.

Today at noon, team and company officials will formally announce a 10-year, nearly $20 million agreement to name the stadium PPL Park, the result of a months-long courtship that began slowly, then blossomed.

The alliance will stamp the PPL name on and around the 18,500-seat stadium, being built on the Chester city waterfront to host the Union, the new Major League Soccer team.

The first game in Chester is scheduled for June 27. Stadium construction remains on schedule despite the recent snows.

For PPL, the agreement helps promote a new idea: electric deregulation. PPL wants to get noticed in Peco Energy Co. territory, because at the end of this year Peco's rate caps will be lifted, allowing 1.6 million customers to pick their own suppliers.

For the Union, the deal offers a strong, stable partner in an era of economic uncertainty, and a reliable income at a time when many firms have been reluctant to invest in stadium naming.

For a moment, PPL Park was nearly called PPL EnergyPlus Park - the name of the subsidiary responsible for buying and selling energy in competitive wholesale and deregulated retail markets. But the more team and company officials said the name out loud, the more they realized that it was a mouthful, and that a shorter, snappier, "PPL Park" flowed more easily off the tongue.

PPL, formerly the Pennsylvania Power & Light Co., is a familiar name in the 29 Pennsylvania counties where it has supplied power for decades. Now its subsidiary, PPL EnergyPlus, is ready to market itself to Peco's industrial and commercial customers.

"There are a lot of companies trying to get this business," said PPL spokesperson George Lewis. "It will definitely be competitive."

The $120 million stadium won't be finished in time for the Union's first home game on April 10. That match has been moved to Lincoln Financial Field, along with the team's second home game, against FC Dallas, on May 15.

The Union will play its first-ever game in Seattle against the Sounders on March 25.

The stadium deal is not PPL's first foray into sports. The utility already has a deal with the Lehigh Valley IronPigs, a Phillies minor-league team, sponsoring the PPL Picnic Patio at Coca-Cola Park in Allentown.

But it wasn't until the initial phone calls from the Union, Alessandrini recalled, that soccer came to mind. Union officials followed up with a two-hour presentation, reinforcing their remarks with statistics on PowerPoint. PPL leaders were impressed but not persuaded.

"It piqued our curiosity," Alessandrini said.

The Union exposition, conducted by chief executive Nick Sakiewicz, president Tom Veit, and others, was methodical, detailed, and polished. Alessandrini learned that, earlier, the team had retained a marketing firm to compile a list of companies that would be good stadium partners.

"They talked to a lot of people," Alessandrini said. "By the time they came to us, they'd been through it, they were experienced. They were getting to a few parties that were left. They knew they had to hit the home run."

Sakiewicz said that while the Union was talking to PPL, it also was holding discussions with about six other firms. If conversations with PPL had faltered, the team would have moved on to other possibilities.

But the talks continued, each side coming back with additional ideas.

"I've done a lot of these deals over the years," said Sakiewicz, a former president of the Tampa Bay Mutiny and New York MetroStars, "and you always look for good fit and good chemistry between the working groups. And we had both."

One hitch was that most stadium-naming agreements are business-to-consumer ventures, aimed at making a firm known to people who watch from the stands and on TV. But PPL sought business-to-business opportunities, focused on commercial and industrial customers. The people PPL wants to reach are those who make decisions for companies, not households.

The Union developed specific plans to engage those customers through receptions, meet-the-team events, and business gatherings, which will occur throughout the year.

"We realized we had a lot of synergies, a lot of similarities," Alessandrini said. "Like any good business negotiation, there's a lot of time spent talking about how that relationship needs to work, and how we make sure both parties are winners."

PPL executives traveled to Chester, meeting not just with Union officials, but with elected leaders and even the Sons of Ben fan club. They left "impressed with the commitment those people were showing, and how badly they wanted everyone to be successful," Alessandrini said.

Stadium-naming contracts tend to be long-term, often 20 to 30 years, with price tags ranging from lows of less than $1 million a year to highs of 20 times that, according to Business Week and other publications. For instance, Citigroup Inc. is paying the New York Mets $400 million over 20 years to call the baseball team's stadium Citi Field.

Obviously, an expansion soccer team, playing in a smaller market, could not command that kind of money. But setting a fair price was complicated.

The Union sought a fee close to industry standards, Alessandrini said. PPL countered that given the current economic downturn, the price must be lower.

The length of the contract was an issue too, particularly in an economy where six months can seem like forever.

The Union wanted a 15-year deal. The company suggested five. They agreed on 10.

"They got a good deal," Sakiewicz said. "The value of the naming rights is significant for this building, in this marketplace."

He said the worth of the deal ranked in the middle of other MLS stadium agreements, including those for Toyota Park in Bridgeview, Ill., home to the Chicago Fire, and the Home Depot Center in Carson, Calif., which hosts the L.A. Galaxy and Chivas USA. In 2008, Real Salt Lake, which plays in Sandy, Utah, signed a 15-year deal with the Rio Tinto Group, a large mining firm, that pays the team between $1.5 million and $2 million annually.

Alessandrini said he believed that for his firm, the stadium deal would do several things at once - increase recognition of PPL, plant a flag in a new region, and associate the firm with the excitement surrounding the Union.

"We're truly partners in this," he said. "They're just as anxious to reach those business partners as we are."