TD Banknorth Inc., a Maine bank with aspirations to become a big regional player, has won the sweepstakes to put its name on the arena known as the FleetCenter for the past decade, according to executives briefed on the negotiations.
The deal to rename the home of the Boston Celtics and Bruins will be among the most expensive in the country, costing the bank $6 million per year. The name is tentatively set as the TD Banknorth Center, and the deal is expected to be made public today.
The agreement marks a high-profile bid for name recognition from TD Banknorth, which plans to expand rapidly throughout the Northeast. The bank sold a majority stake in its operations for $3.9 billion to the much larger TD Bank Financial Group of Canada, which plans to give TD Banknorth the backing to buy banks in Massachusetts, Connecticut, and New York City. TD Banknorth added TD to its name after the deal closed this week. TD Bank Financial Group owns Toronto-Dominion Bank, Canada's second-largest bank, and the investment firm TD Waterhouse.
Executives at the FleetCenter declined to comment on the status of the negotiations last night, and TD Banknorth executives could not be reached for comment. The price of the deal is among the highest in naming rights for basketball and hockey arenas, behind the $9.3 million a year paid to name Atlanta's Philips Arena and $6.5 million a year to the American Airlines Center in Dallas. The Atlanta deal comes with sponsorship of the city's basketball team, the Hawks, and its hockey team, the Thrashers, as well as millions of dollars worth of television commercials and other promotions for Royal Philips Electronics, driving up the price.
The FleetCenter deal does not include sponsorship of either team, though in a separate agreement, TD Banknorth also sponsors the Boston Bruins at $1 million a year. Citizens Financial Group sponsors the Celtics.
The FleetCenter is changing names after Bank of America Corp. of Charlotte, N.C., acquired FleetBoston Financial Corp. for $48 billion last year. Bank of America decided to pay a fee, likely about $3 million, to get out of the existing naming-rights contract, rather than sign off on a new deal to call the building the Bank of America Center.
The FleetCenter originally was named the Shawmut Center when it was under construction, after Shawmut Bank signed a 15-year, $2 million-a-year deal in the mid-1990s. Before the building opened, however, Shawmut was acquired by Fleet Bank, and the name was changed to the FleetCenter. The original deal allowed the bank to change the center's name once for free. While Bank of America at first expressed interest in renaming the building, it ultimately decided that it had strong name recognition and that the arena, which focuses on basketball and hockey, would not fit well with its sponsorship priorities. Bank of America is concentrating its marketing around Major League Baseball, Little League, and the Olympics.
After Bank of America dropped out, TD Banknorth emerged as the leading candidate to put its name on the building, as high-profile local consumer companies such as CVS Corp. and Reebok International Ltd. expressed varying levels of interest in the opportunity. A Banknorth executive, Rick Dempsey, told the Portland Press Herald in January that a naming-rights deal for the FleetCenter ''would probably put Banknorth officially on the map in New England."
''Sports marketing is a cornerstone of our marketing strategy," said Dempsey, executive vice president of corporate marketing. ''The demographic of what we call 'true fans' is a perfect match to our banking customers."
TD Banknorth recently has been beefing up its presence in Massachusetts, acquiring banks in Boston's suburbs and on Cape Cod.
But TD Banknorth remains a distant player in a market dominated by Bank of America Corp. and Citizens Financial Group. With backing from its new parent, that could change. TD Banknorth plans to rename its branches TD Banknorth, so the FleetCenter likely would carry the new TD Banknorth name.
Though the price tag sounds high, the deal could pay off in name recognition for TD Banknorth as it grows larger, said James Ackor, an analyst with RBC Capital Markets who follows TD Banknorth's stock.
''The name-brand recognition you get for doing something like this is considerable," he said.
TD Banknorth's merger partner, TD, already has shown an interest in naming rights in other parts of the country. Its TD Waterhouse subsidiary recently extended its agreement for the TD Waterhouse Centre in Orlando, Fla., home of the Orlando Magic basketball team, until 2006. That deal comes with a corporate suite that holds 16, as well as four other tickets to every home game. The brokerage uses the tickets primarily to entertain clients.
Sasha Talcott can be reached at firstname.lastname@example.org.