FirstEnergy Corp.’s sponsorship deal to put the company name on Cleveland Browns Stadium will last 17 years at an undisclosed amount.
Chuck Jones, president of FirstEnergy Utilities, brokered the deal between the company and the Browns. He acknowledged in an interview Wednesday morning with the Beacon Journal that the contract extends for the remainder of the lease the Browns have with the city of Cleveland, which owns the stadium.
In July, when former Browns owner Randy Lerner confirmed he was in talks with Tennessee business executive Jimmy Haslam to buy the team, Cleveland Mayor Frank Jackson said the 30-year lease to the Browns started in 1999 and continues until 2029.
That would make the contract between FirstEnergy and the Browns for the naming rights of FirstEnergy Stadium: Home of the Cleveland Browns a 17-year deal.
At a news conference Tuesday announcing the deal, Haslam said the terms were not being disclosed, at the request of FirstEnergy.
On Wednesday, Jones said both organizations made the decision and the lack of financial disclosure was for competitive reasons for FirstEnergy.
FirstEnergy Corp. is the parent company of FirstEnergy Utilities, which operates the regulated electricity distribution units of Ohio Edison, Cleveland Illuminating Co. and Toledo Edison, and of FirstEnergy Solutions, which offers electricity contracts.
The competitive side of the business has been facing more pressure, Jones said, since Ohio deregulation took effect, allowing customers to shop for the portion of electricity called “generation.”
Competitors coming into the market include such national companies as Constellation Energy and Direct Energy, he said.
“For instance, five years ago, we served electricity to nearly all of our Ohio customers. Today, we provide electricity to less than half of our Ohio customers. It’s become very competitive,” he said.
Revenue from the competitive side has declined due to a combination of cheaper electricity prices and less market share. At the end of 2008, revenue for the regulated and unregulated sides were about a 50-50 split, Jones said. For 2012, he said, revenue for the regulated side represented about 70 percent of the total.
“We are constantly doing deals that impact our competitive business, [and] we don’t disclose the details to any of those because it’s competitive information,” he said.
Jones said the company has “decided that branding and marketing and so forth is much more critical than we thought it was going to be as we compete with all these other energy providers out there.”
Naming rights contracts across the country can vary.
In 2006, the University of Phoenix Stadium, home of the Arizona Cardinals, brought in $154 million for 26 years. In 2008, Lucas Oil Stadium, home of the Indianapolis Colts, brought in $122 million for a 20-year deal.
FirstEnergy’s deal is being made in payments, Jones said. It also includes exclusive rights for FirstEnergy to be the only electric energy provider to have any signage in and around the stadium.
Other terms include: an illuminated exterior sign and internal signs, among them a FirstEnergy Stadium sign at the 50-yard line on each side of the stadium; a certain percentage of time on LED screens; tickets for employees to use; providing a certain number of Browns players and coaches to attend FirstEnergy promotional events; and a rooftop sign visible from aerial views.
FirstEnergy already owns a suite at the stadium.
The deal also precludes the Browns from separately selling the naming rights to the football field itself.