CHS Buys Naming Rights for New Saints Stadium

About This Project

CHS Field may not have the classic baseball ring of names like Lowertown Yards or Broadway Park, or offer a tip of the ball cap to hometown heroes (Winfield Field, anyone?).

But that’s what Mike Veeck loves about the new name for St. Paul’s rising downtown ballpark: It’s a blank slate.

 “We’re free to paint the picture,” said Veeck, the irrepressible president and co-owner of the St. Paul Saints, the ballpark’s main tenant when it opens next year.

“I’m really excited about having a partner where you don’t have preconceived notions, you don’t have baggage. … This is a great day in Saintsville. Midway Stadium, all those memories, we’re going to bring those here.”

The Saints announced Monday that the team had sold the naming rights for the city-owned, $65 million ballpark to Inver Grove Heights-based CHS Inc., the nation’s largest farmer-owned cooperative, for an undisclosed amount of money.

The deal will run 13 years, officials said.

“It’s a very beneficial agreement for both companies, but we’re not going to disclose what the actual details and financial arrangements are,” said Carl Casale, president and CEO of the farmer-owned company formed in 1998 by the merger of Cenex and Harvest States Inc.

More than 80 percent of the cost of the $65 million ballpark is being paid with public money from the state and the city. The Saints’ $11 million share of construction includes $8.5 million it will pay the city to rent the ballpark and $2.5 million in cash. The team will pay most of the operating and maintenance costs, estimated at $5 million a year.

Based on a statement released Monday by the Saints, naming rights revenue will be tied to attendance. The more fans who show up at the ballpark, the more CHS will pay. It wasn’t clear how that might be structured, and the Saints weren’t talking.

According to a study done last year by Team Services, a naming-rights consulting firm based in Maryland, naming rights for minor league ballparks with a capacity of 7,000 seats — such as CHS Field — averaged $3 million over a 13-year period.

 Under the terms of the lease that the city and the Saints signed last year, anything the team gets over $500,000 from naming rights would go to the city to pay down the $1.2 million balance on the $6 million loan that St. Paul made to itself last year to close a last-minute funding gap.

Once that loan is paid off, naming rights revenue would revert to the Saints.

Monday’s announcement was made in the second base area of the emerging ballpark, still a gravel patch that Mayor Chris Coleman said was “slightly better than Midway Stadium right now.”

The funky Midway ballpark will be torn down in the coming months, but Veeck promised that CHS Field will be infused “with the same joy, the same silliness, occasionally the same mistakes.”

Casale said that the fit was deemed “perfect” between CHS and the Saints after their first meeting, and that the naming rights deal took less than two months to complete.

 “If there’s anything more American than agriculture and baseball, I don’t know what those things are,” he said at the unveiling ceremony, complete with tractor and hay wagon. “We’re really proud and pleased to be part of the Saints family now.”

Afterward, Casale said the company’s decision to buy the naming rights was driven by its desire to make the corporate name better known to the public and potential employees. Despite the fact that CHS is a Fortune 100 company, with annual revenue last year of $44.5 billion, he said more people recognize its products — Cenex gasoline, Marie’s salad dressings, Dean’s Dairy Dip — than its name.

“People may not exactly know what we do, but they’ll at least have heard of the company and build that recognition over time,” he said.

The naming rights deal ensures that the ballpark will be made available for CHS company events and promotional activities, he said.

CHS distributed about $433 million in cash to its member farmers and co-ops this year, the second-largest payout in its history. Just last week it announced its biggest investment ever, construction of a $3 billion fertilizer plant in North Dakota.

Date

September 09, 2014

Category
Business
Top