The Milwaukee Bucks’ arena naming rights agreement with Brookfield-based financial services technology developer Fiserv Inc. is the product of a partnership a couple years in the making, Bucks president Peter Feigin said during the highly-anticipated deal announcement. The final agreement came exactly a month before the Fiserv Forum’s grand opening.
A Fortune 500 firm, Fiserv provides payments, processing services, risk and compliance, customer channel management, and insights and optimization for banks and credit unions. As a business-to-business company, some have expressed surprise that Fiserv wants to sponsor a venue so heavily focused on the consumer experience.[caption id="attachment_358541" align="alignright" width="350"] Yabuki and Feigin[/caption]
When the Bucks agreed to cover the cost of maintenance and operations for the arena as part of its public financing package, it meant the naming rights sponsorship would be an important source of revenue for the organization. But the deal is far from one-sided.
From Fiserv’s perspective, having its name on the $524 million downtown arena for the next 25 years is a no-brainer. This was evident when Fiserv chief executive officer Jeffery Yabuki, after being asked why he agreed to the deal, pointed at the 17,500-seat bowl and newly painted court behind him and answered, “Look at this.”
“(The Milwaukee Bucks) understand that it’s experiences in life that matter,” Yabuki said. “Our technology enables life. Peter and the ownership are enabling incredible sports and entertainment experiences. If you put them together, we have a fantastic opportunity to differentiate together and partner.”
By associating its brand with a “symbol of technology, innovation, entertainment and experience,” Yabuki added, the company demonstrates pride in its services, but also shows potential to “elevate” its brand and evolve as a company.
Although it’s a publicly-traded Fortune 500 firm, Fiserv is not a household name to most consumers, so the partnership will introduce the Fiserv brand to people worldwide who may be unfamiliar with the company. As Yabuki has described it, the arena naming rights deal is an opportunity for the company to reach a wider and more diversified audience.
The partnership for Fiserv will not only create more brand awareness and increase sales, but it will also help consumers better relate to its products, said Todd Fischer, who is senior vice president of client consulting and services at GMR Marketing, a New Berlin-based global sponsorship and experiential marketing agency.
“It will take the intangible nature of their financial services technology and create passion and excitement and engagement with it through tangible experience, whether that’s hosting customers, showcasing technology or just telling their story of innovation and all the things that they do that a lot of people aren’t aware of,” he said.
Fiserv joins a growing cohort of business-to-business companies in recent year that have also agreed to similar sponsorship deals, Fischer said, and it really all comes down to differentiating themselves from their competitors in hopes of attracting more customers, and not necessarily consumers.
“(Business-to-business companies) are facing the same challenges that every business is, which are: ‘how do they make themselves more attractive to businesses they want to work with?’ ‘How do they engage them in ways that are meaningful to them?’” Fischer said.
At least among competitors that are also publicly held, it looks like this deal gives Fiserv an edge, he said.
“We’ve seen some work done in the space that shows public companies that have naming rights deals outperform those that don’t in the stock market,” Fischer said.
During Fiserv’s July 31 earnings call, Yabuki assured shareholders the company would deliver on the sponsorship agreement in an “extremely cost-effective fashion,” although financial terms of the 25-year arena naming rights deal have not been disclosed and the cost of the contract was not included in the company’s second-quarter report.
Fiserv has also been in the midst of a search for a new corporate headquarters location and about a year ago had narrowed the search to three locations in the metro Milwaukee market, but had not ruled out other states. The state offered $10 million in tax credits for the company to keep its headquarters and at least 93 percent of its approximately 900 Wisconsin employees in the state, plus another $2.5 million in capital investment credits for the construction, as part of the special legislative session at which the Foxconn Technology Group incentives were approved.
Fiserv again did not provide an update on the headquarters during its recent earnings call or during the deal announcement, but the company has repeatedly said it is “committed to Wisconsin.”