There’s more than one Orange County company with a lot riding on the Sacramento Kings as the basketball team leans toward a move to Anaheim.
Laguna Niguel’s Power Balance LLC, a maker of wristbands and pendants marketed for athletes, has a deal to take over naming rights of the Kings’ Sacramento home court, now known as Arco Arena.
In January, Power Balance and Maloof Sports & Entertainment—headed by Kings co-owners Joe and Gavin Maloof—struck a five-year deal including naming rights for the Sacramento arena.
The deal also calls for cross-marketing at the Maloofs’ other events and properties.
That pact is set to take effect Tuesday, which also was the deadline for the Maloofs to submit a relocation plan to the National Basketball Association’s commissioner.
The Maloofs asked for and got an extension until April 15.
The family, which also owns the Kings’ arena, is in advanced talks to move the team to Anaheim and the city’s Honda Center arena.
Anaheim Arena Management LLC, owned by Broadcom Corp. cofounder Henry Samueli, runs the city-owned arena and has been trying to lure a basketball team.
Power Balance started in 2006 and makes bracelets and pendants that have been touted for improving strength, balance and flexibility for athletes.
The silicone and neoprene wristbands and zinc alloy pendants sell for about $30. Silicone pendants run about $35 and silver pendants go for about $80.
Power Balance’s sponsorship deal has been put on hold until things clear up, according to sources familiar with the pact.
“Ultimately, the deal was about aligning with a great brand for the benefit of the team, the fans and the community, not about putting a name on a building,” according to a statement from Power Balance.
The deal gives Power Balance a “first right of renewal for naming rights” if the Kings stay in Sacramento.
But “there’s nothing in the contract about relocation,” according to Kings Vice President of Marketing and Communications Mitch Germann.
Power Balance doesn’t have an out clause if the team moves, according to Germann.
That’s not how the company sees it.
“Power Balance will always have the option not to move forward with the partnership should the team relocate,” the company said in a statement. “But we have every expectation that the relationship will continue and we’re very excited about that.”
Sources close to the situation said Power Balance and the Maloofs are trying to work out an agreement that benefits each party.
The value of the sponsorship deal hasn’t been disclosed. Joe Maloof characterized it as “considerably more” than the $750,000 received annually from Arco, a division of Britain’s BP PLC.
Arco signed the deal nearly 20 years ago. The market for naming rights has risen considerably since then.
The money the Kings receive from Arco annually is believed to be among the smallest in professional sports today.
Power’s Deal
By NBA standards, Power Balance’s five-year naming rights deal is a short one.
“If they only have a five-year deal, that’s different than many of these deals,” said Craig Esherick, an assistant professor of sports management at George Mason University. “The short term of the deal is as odd as not having the out.”
Esherick, a former head basketball coach at Georgetown University, said Power Balance could benefit from the deal regardless of the duration.
“This is a big benefit to the company in the very short term,” he said. “Maybe this is a brilliant move by a young company that’s trying to promote a product.”
The Maloofs had been looking for months for a naming rights sponsor to replace Arco.
The family’s holdings include a local annual sporting event known as the Maloof Money Cup at the OC Fair & Event Center in Costa Mesa. They also own the Palms Casino Resort in Las Vegas, among other holdings.
Power Balance is an NBA licensee and has used sports and its stars to market products. Notable endorsers include Boston Celtics center Shaquille O’Neal, Chicago Bulls guard Derrick Rose and New Orleans Saints quarterback Drew Brees. Bracelets also have been spotted on celebrities such as Robert De Niro and Sean “Diddy” Combs.
The company’s annual sales are estimated at more than $35 million.
Power Balance has been in some hot water recently. In January, the Australian government required the company to run a corrective advertisement acknowledging that there’s no scientific evidence its products improve strength, balance and flexibility.
A lawsuit also was filed in California in February claiming the company misled consumers on the benefits of wearing its bracelets.
THE NEWS:
Kings in advanced talks on possible move to Anaheim.
BACKGROUND:
Move would gut Power Balance’s deal to sponsor Sacramento arena now home to the Kings.
WHAT’S AHEAD:
Decision on move due by April 15. Power in talks about reworking deal.
