Sourced by RE: Miami Beach, August 8, 2020
Global Spectrum dba Spectra has been hired by the City of Miami Beach to manage all sponsorships and naming rights for the City. In an effort to generate new revenue streams, Commissioners began discussing options almost two years ago long before the impact of COVID-19 though the need for additional revenue has become more acute since.
Following a nationwide Request for Proposals, Spectra, the company that manages the Miami Beach Convention Center, was chosen. According to a memo to the Mayor and Commissioners from City Manager Jimmy Morales, Spectra will have a dedicated person handling the “management and fulfillment of all sponsorships and naming rights… thus ensuring the maximum amount of revenue to the city.”
Bryan Furey, Spectra’s Senior Vice President of Partnerships, said in a statement to RE:MiamiBeach, “We are pleased to have the opportunity to represent the City of Miami Beach in naming rights and sponsorship sales efforts. Spectra Partnerships is an industry leader in providing naming rights sales representation for sports and entertainment venues including arenas, amphitheaters, convention centers and stadiums. The firm has sold over 40+ naming rights in the last 10 years, believed to be more than any other firm in North America.”
Among the properties Spectra has sold naming rights for:
- NOW Arena, an 11,800 seat multi-purpose arena outside of Chicago
- XL Center, a multi-purpose arena and convention center in downtown Hartford, Connecticut
- EagleBank Arena, a 10,000 seat arena on the campus of George Mason University in Fairfax, Virginia, a suburb of Washington, DC
- Community Choice Credit Union Convention Center in Des Moines, Iowa
- Macron Stadium, a 28,723 seat venue at the University of Bolton Stadium, home of the Bolton Wanderers F.C.
- Findlay Toyota Center, a 5,100 seat multi-purpose arena in Prescott Valley, Arizona
“As part of the scope of services we provide to the City of Miami Beach, we will provide a valuation that contemplates market size, industry comparisons, demand and marketing reach to develop the best price to go to market,” Furey said.
In addition to the Miami Beach Convention Center, Spectra also provides venue management services for the Palm Beach County Convention Center, as well as food services and hospitality locally at Inter Miami CF Stadium and Adrienne Arsht Center for the Performing Arts.
Financial terms vary by type of revenue generated and are tiered by amount of revenue.
For commercial rights agreements which include “advertising signage, sponsorship, premium seating, pouring and other vendor rights, interactive media and branding rights, as well as other similar revenue generating opportunities,” Spectra is due 50% for the first $200,000, 18% for $200,001 through $1 million, and 22% for revenue above $1 million in a contract year. As an example, for a $900,000 sponsorship, the company would be paid $226,000 – $100,000 (50% of the first $200,000) plus $126,000 (18% of $700,000, i.e. $900,000 - $200,000 = $700,000 x 18%).
Spectra will also take over management of the current Coca Cola sponsorship and be paid 5% of revenue, however, it will get 20% on any upsell revenue. The Coca Cola agreement ends in December 2021.
For revenue generated under a naming rights agreement, Spectra will receive 10% through the first $700,000, 12.5% for $700,001 through $900,000, 15% for $900,001 through $1.5 million, and 17.5% for $1,500,001 or more.
“These rates are consistent with the industry,” Morales wrote.
According to the contract, naming rights are available for the following City facilities:
- Miami Beach Convention Center (interior and exterior)
- Colony Theater (exterior only)
- 10th Street Auditorium/Welcome Center (interior and exterior)
- Historic City Hall (interior and exterior)
- 1701 Meridian Avenue (interior and exterior)
- North Beach Bandshell (interior and exterior)
- Byron Carlyle Theater (interior and exterior; venue is currently closed, pending redevelopment)
- City-owned and operated parking garages (exterior only though the interior of the garages will become available upon the expiration of the current agreement between the City and Alchemy Miami Beach, LLC)
- Adaptive Recreation Center (to be constructed by Sabrina Cohen Foundation and requires Foundation approval)
- 72nd Street Civic Complex (to be constructed) (interior and exterior)
The agreement is for a five-year term with three one-year renewal options. At the request of the City Commission, the agreement can be terminated if Spectra fails to negotiate a naming rights deal for the Miami Beach Convention Center, that is approved by the City Commission, within twenty-four months from the effective date of the Agreement. The City may not terminate the agreement if approval of a naming rights proposal “that includes commercially reasonable terms” is unreasonably withheld.
Morales’ memo and the agreement are here.
Source: RE: Miami Beach