The Cincinnati Planning Commission approved new signs to promote the name change last Friday.
Nearly 70,000 sq. feet of Paycor Stadium signage was unanimously approved by the commission in the first of several hoops the Cincinnati Bengals must jump through to officially change the stadium’s name. The new permanent signs will go before City council in two weeks, and the name change still needs the approval of the Hamilton County Commissioners, who own the stadium.
The Bengals believe the partnership with Paycor will help grow both companies — and help meet the demand of a growing salary cap to retain the team’s “most exciting players.”
“The Bengals will continue to turn over every stone in trying to keep the Bengals operating at a high level here in Cincinnati and competing for Super Bowls for our great city,” said Luke Blocher, a lawyer with Taft, Stettinius & Hollister that represents the Bengals.
Paycor, headquartered on Montgomery Road in Norwood, is a payroll processing company that “builds HR software for the leaders and frontline managers everyone depends on,” according to its website. The company has about 2,200 employees. It served as the team’s “official and exclusive HR software provider since 2018,” the Bengals said.
“Through a strategic partnership with our hometown team, the Cincinnati Bengals, we are beyond thrilled to introduce Paycor Stadium to the world,” said Raul Villar Jr., Chief Executive Officer of Paycor, in a press release. “As Paycor continues to grow and reach customers throughout the U.S., our mission of empowering leaders to build winning teams perfectly aligns with the defending AFC Champions. As longtime fans, this is a big point of employee pride and we are honored to support our local team and build on the legacy of Paul Brown.”
“This is a move that I think my father would have agreed to. He was always for what is best for the football team,” said Bengals President Mike Brown in a press release. “This partnership allows the Bengals to continue to compete at the highest level in the NFL and exemplifies our long-term commitment to the community.”
Paycor is well known in Cincinnati because its founder, Bob Coughlin, also started the Flying Pig Marathon. For much of its history, Paycor followed the regional footprint of Cincinnati’s Fifth Third Bank, Villar told investors in a June 8 conference call.
The company was sold in 2018 to Apax Partners, a British private equity firm that hired Villar in 2019 to embark on a national expansion. That led to an Initial Public Offering last July that raised $450 million to fund new growth initiatives. The company expects to report annual revenue of about $420 million later this month for the 12 months that ended June 30. Villar hopes to grow the company beyond $1 billion in the next five years.
WHAT’S THE DEAL?
The naming rights deal is a chance for the company to get its name in front of millions of football fans every week, said Joe Cobbs, a sports business professor at Northern Kentucky University’s Haile College of Business.
“I think for Paycor, it does make a lot of sense,” Cobbs said. “It’s a local company but they have more than a local footprint and they’re trying to expand that footprint further.”
The Bengals confirmed Paycor signed a 16-year deal but wouldn’t disclose how much the company will pay the team.
Miami University Assistant Professor Adam Beissel said it’s reasonable to assume the deal will be similar in size to Pittsburgh’s recently announced deal, which will cost the insurance company Acrisure between $10 million and $20 million over 15 years.
“The question of whether Paycor is paying too much could be a spot of debate,” Beissel said. “If it is, as rumored to be about $10 million dollars, it puts the annual contribution from Paycor at around 5% of its annual revenue. That’s comparatively high if you look at stadium naming rights deals across the United States.”
The Bengals said they would incorporate Paycor into the stadium in the coming months. The team submitted a formal request to place temporary signs on the stadium for its new sponsored name. The city initially denied it because variances are needed.
In a July 27 letter to the team, city urban conservator Douglas Owen wrote that the temporary signs must be made of cloth or light fabric, not exceed 12 feet in any of its dimensions, cannot cover any windows or doors and may not be installed for more than 30 days for a maximum of four times per year.
The temporary signage proposal is scheduled to go before the city zoning hearing examiner on Aug. 24.
Meanwhile, the Bengals permanent signage proposal for the stadium is expected to go to the City Planning Commission on Aug. 19 and then to City Council the week of Labor Day.
Hamilton County Commissioners also have to approve the naming rights deal. The original 1997 lease states that the Bengals team entitled to retain the first $16.7 million from the sale of the naming rights, plus 70 percent of any net revenues in excess of that. The county’s share is 30 percent.
However, the lease also defines net revenue as “gross revenue minus the Bengals’ cost of fulfillment,” which includes the cost of signage suites and marketing, said Hamilton County spokeswoman Bridget Doherty. In addition, all net revenues received over the next 16 years must be discounted to their value in the year 2000, using a discount rate of 6%, Doherty said.
A $10 million payment in 2022 would have been worth $5.8 million in 2000, according to this inflation calculator.
“It was important to find a naming rights partner that strongly aligns with the Bengals brand,” said Bengals Executive Vice President Katie Blackburn in a press release. “Paycor is a local company on the rise that shares our commitment to building winning teams. We are proud to support Paycor’s growth and strengthen the Cincinnati business community with this partnership.”
Huge stadium naming rights deals have become common in major cities such as Los Angeles, where SoFi signed a $400 million deal for 20 years, and Las Vegas where Allegiant Airlines paid $25 million for the naming rights.
But one expert predicted a much lower economic deal for the Bengals. No financial terms were immediately announced.
The Bengals hand-delivered and emailed a letter to Hamilton County Board of Commissioners on Tuesday notifying them of its deal, in principle, with Paycor and asking for written consent to move forward. Hamilton County owns the stadium and leases it to the Bengals.
About the Author