By Alan Snel of LVSportsBiz.com
When it rains sponsorship deals for the Raiders in Las Vegas, it pours revenue. The Raiders are working on lining up yet another stadium founding partnership deal.
And this time, the 10-year, $30 million sponsorship deal would come from a public agency — the Southern Nevada Water Authority that is known for its irreverent water conservation/restriction campaigns such as a TV spot showing hard-hitting Vegas Golden Knights player Ryan Reaves smashing into a customer wasting water.
Because the Raiders’ newest potential stadium founding partner is a public agency, the sponsorship deal is public and the proposed agreement shines light on the financial terms of the Raiders founding partner deals. The water authority’s board will decide the Raiders sponsorship deal’s fate on Thursday.
Scott Huntley, senior manager of public services for the Southern Nevada Water Authority, said the water agency’s proposed founding partnership deal has the same money value as the Raiders’ other stadium founding partners. Those partners are Allegiant Air, America First Credit Union, Caesar Entertainment, Cox, Credit One Bank, Desert Ford Dealers, Reyes Coca-Cola Bottling, San Manuel Casino and Twitch.
Each pays the same amount annually for the 10 years — $2.5 million a year in year one with a four percent increase annually for the decade-long agreement. By year ten, it’s $3.558 million for that year. “That’s what all the founding partners are paying,” Huntley said. Southern Nevada Water Authority would be the NFL team’s tenth stadium founding partner. At $30 million over 10 years per founding partner, the Raiders would generate $300 million in sponsorship revenue during the next decade.
Huntley believes using those public dollars to get the message across to Southern Nevada to not waste water and to conserve water is worth the investment. The $2.5 million payment to the Raiders in year one would be on top of the agency’s current $4.9 million annual marketing budget, Huntley told LVSportsBiz.com in an interview Saturday.
The water agency currently spends $500,000 of the annual $4.9 million marketing budget on sports teams, such as $200,000 to the Vegas Golden Knights and $30,000-$35,000 to Reaves on the water conservation messaging. The water authority also spends public dollars on the Las Vegas Aviators baseball team, the Las Vegas Lights soccer club and UNLV sports.
The Raiders’ sponsorship deal came together relatively quickly. Serious talks between the Southern Nevada Water Authority and the NFL team began in July.
“We don’t see it as supporting the team. We see it as reaching our audience in a significant way,” Huntley said. “The cheapest way to expand the water supply is through conserving water through the community. If we can increase our compliance by 15 percent, it would save . . . one fifteenth of our total allocation from the Colorado River.”
Huntley believes the Raiders sponsorship deal is a good value because the Raiders’ fans are a demographic that reflects the water authority’s customer backgrounds. He said the Raiders’ audience includes a 35 percent share of Latino fans and a 15 percent share of black fans. “Those percentages are relatively close to the district’s customers,” Huntley said.
And he said most of the customers who control the water flow at houses, business developments and commercial buildings/properties are men.
“It’s a unique deal for us because of who our audience is. For water conservation, what we know is that the majority of the people who manage the water for a home or apartment or business are men, and men of a certain of a age. It’s a younger Joe Six Pack or an older Joe Six Pack,” Huntley said.
“The Raiders demographic fits perfectly for us. It’s a very diverse audience,” he said. “$2.5 million is really a good expenditure for us.”
Huntley said the water authority would use its Raiders founding partnership differently than Caesars or the local Ford dealers group.
“A lot of the entities are promoting themselves. We’re promoting the seasonal water restrictions and water conservation. That’s a significant thing,” he said. “Ford will be promoting Ford and Caesars will be promoting Caesars. We’re trying to reach an audience so that they follow the mandatory water restrictions and they conserve water.”
Huntley believes the number of annual media impressions will justify the Raiders sponsorship deal. He said the agency draws 340 million annual local impressions under its current annual $4.9 million marketing budget. By paying the Raiders at least $2.5 million a year more, the water authority believes it will garner another 169 million local impressions a year.
“It’s a 50 percent increase on the number of impressions,” Huntley said.
It costs the water agency $13.69 per 1,000 overall impressions and the water authority would pay $1.50 less than that per 1,000 overall impressions, he said.
What does the public water authority get for giving at least $2.5 million to $3.5 million a year to the Raiders?
There will be water authority spots during Raiders games on traditional platforms like TV, radio and social media, plus water conservation and restriction information on the new stadium’s big video board facing Interstate 15 and LED signage throughout the domed, 65,000-seat stadium that is scheduled to be completed by July 31, 2020.
Plus, the Southern Nevada Water Authority ads will be placed in the men’s and women’s bathrooms of both the upper and main concourses. “You kinda have a captive audience there,” Huntley noted.
Under the deal, the Raiders have also agreed to spend $600,000 a year annually for 10 years to replace two grass football fields with artificial surface fields at Clark County schools every year. And the Raiders will seek an NFL grant to provide another $200,000 in the pot to help with the football field conversions from grass to artificial turf, Huntley said.
Under the deal, the water agency is not allowed to receive game tickets. “We are not allowed to accept anything that could be considered a gift. No tickets, no boxes, no other such considerations,” he said.
The Southern Nevada Water Authority conservation/restriction spots are famous for their humor like the irreverent ad of VGK’s Reaves slamming into a water customer for not following the water restrictions.
“We use a lot of humor in our campaigns. That has worked for us really well. You can expect to see something in a similar vein (like the Reaves spot). It will be a little irreverent, over-the-top and attention-grabbing and people take it with tongue in cheek,” Huntley said.
The water authority will also have permission to use the Raiders logo, the uniform and the NFL. “We get to use their branding for our commercials,” he said.
The agency has negotiated with the Raiders’ corporate sponsorship staff and legal team, Huntley said.
Raiders President Marc Badain expects to be at the Southern Nevada Water Authority board meeting Thursday at 3PM. Here is the meeting agenda.
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