EDITORIAL: Naming rights deal speaks to new arena’s viability

There is little doubt that the $375 million arena being built by MGM Resorts International and Anschutz Entertainment Group will be a huge success. A sure sign of that came last week when another major player decided it wanted to be on board when the new venue on the Strip opens in April.

As reported by the Review-Journal's Alan Snel, wireless operator T-Mobile bought the naming rights to the arena. The building, informally called Las Vegas Arena the past two years as construction went on near New York-New York and the Monte Carlo, will now officially be T-Mobile Arena. It's T-Mobile's first such corporate arena title deal, which speaks volumes about how beneficial the company believes the relationship will be.

"This was their one shot (at a first naming rights deal), and they wanted to make it a good one," said Rick Arpin, MGM Resorts International senior vice president for entertainment. Indeed, T-Mobile Chief Marketing Officer Andrew Sherrard said the company was looking for the most unique place to make such a splash. "When we did it, we got the right type of property. This was a completely unique space and Las Vegas was a unique town to do it in."

The deal becomes the first big payday for the arena, months before it holds its first event — Las Vegas-based The Killers will open the venue on April 6 — which speaks even more to the viability of this completely privately financed facility. Terms of the deal were not released, but Mr. Snel said it's believed to be in the 10-year range, at somewhere under $6 million per year. Even if one conservatively estimates $4 million annually, that's $40 million that MGM and AEG just knocked off the construction costs.

But perhaps more important is the exposure the arena will get from its relationship with a company that touts 61.2 million customers. T-Mobile is a widely known name with a huge national advertising presence. You can't say that about many arena name rights holders (BB&T Center in Miami, Smoothie King Center in New Orleans, to name a couple).

T-Mobile's move proves MGM and AEG were smart to take the risk on this project, with a venue that will benefit Las Vegas for years to come. Congratulations to all involved in the naming rights deal. April can't come soon enough.