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New Orleans Arena to Become Smoothie King Center Following Sale Of Naming Rights
The sale of the naming rights will give the Pelicans another major income stream. The deal is expected to be for around $40 million dollars over 10 years. The sale removes one more negative discriminator between the Pelicans and the typical NBA team: Only Madison Square Garden (Knicks) and the Palace at Auburn Hills (Pistons) lack a naming rights deal among the 29 NBA arenas (Lakers and Clippers share Staples).
Background on Smoothie King
Smoothie King is privately owned company that started in Kenner, Louisiana (that’s part of the Greater New Orleans area for the non-locals) in 1973. The founders, Steve Kunau (note the initials) and his wife Cindy Kuhnau, originally developed the idea for the store after concocting fruit drinks to help Steve deal with his food allergies and low blood sugar. The first Smoothie King was a health food and vitamin store that featured the fruit drinks. The drinks caught on, and Smoothie King began franchising. In 2003, Wan Kim opened the first international Smoothie King in Seoul, South Korea. He was soon able to open more franchises, and he purchased the company in 2012 using his own company SK, Inc. (Smoothies Korea . . . those initials again). The organization is still headquartered locally.
Wan Kin said after the purchase:
Smoothie King is a company with well over 20 years of aggressive growth ahead of it, both in the U.S. and globally. We are making a long-term commitment to realize this potential. We plan to open more than 1,000 new locations both in the United States and internationally by the end of 2017.
Wan Kim has secured $58m in capital to help with the expansion, plus he plans for Smoothie King to expand what it offers, including food items, not just bagged or package health food and energy bars (this strategy has worked in South Korea). The 1,000 new stores worldwide will include 200 company-owned stores (compared to 1 today). These stores will feature seating and will be testing grounds for new menu concepts. Domestic expansion will center in warm areas, including the South; Dallas and Miami (both NBA cities) have been named. Geographically, the deal is well-placed.
Talking with some of our writers from around the county (we’re international, y’all), the smoothie business is pretty regional. Smoothie King competes with franchises like Jamba Juice and Planet Smoothie. Slapping their name on an arena will be a marketing shot across their brand bows. Smoothie Kings are in the majority of NBA markets, as well.
With the global expansion of the NBA along with its emphasis on health via NBA Fit along, the Pelicans’ parallel efforts, with Ochsner being one of the team’s major sponsors and their well-promoted healthcare promotions, and with other healthy lifestyle initiatives the Pelicans are involved in, Smoothie King’s goals of expansion and mission of “Inspire people to live a healthy & active lifestyle,” the partnership is a natural one. It should be noted that local and founder Steve Kuhnau remains with the company as a consultant and ambassador.
The deal also cements the growing international company’s presence here in the New Orleans area (Metairie).
One reason the deal has taken so long to come to fruition is that Smoothie King actually tested their ingredients and supplements to make sure they could be used in the NBA and other sports leagues. Upon completion of the study, Smoothie King made small alterations to its menu and processes. As a results, professional athletes can drink Smoothie King drinks without fear of violating current rules prohibiting use of certain products. This will go a long way to tie Smoothie King with health and performance.
As mentioned above, the deal is for 10 years and worth approximately $40 million. Smoothie King also has an option for a second 10 years. Smoothie King will have it’s logo on the Center and 20-foot cups will be added to the Center entry by All-Star Weekend. Signs for the company will be up Friday, and Smoothie King will be selling products in both the Smoothie King Center and the Mercedes-Benz Superdome. That latter point is an example of the positive effects of operating both franchises as a unit on some level.
Some temporary signs will be installed for All-Star Weekend to take advantage of the exposure, but permanent installations will follow.
Smoothie King signs and branding will appear at the Arena, in broadcasts, and in other fashions, just as other major sponsors of the team appear.
Personally, I am pretty happy with the sale. Beyond just selling the rights and getting something for the asset that just languished for years and adding money (therefore, stability) to the franchise, I’m a fan of Smoothie King. As part of my limited efforts to be slightly healthy and improve my overall cholesterol situation, I’m a vegetarian at least one day a week. On those days, I often partake in a smoothie, usually from Smoothie King because there are locations near my home and places of employment. Muscle Punch is a good one, and Pineapple Surf is a new favorite. I’m making my way around the menu. At any rate, the new Smoothie King in the Center will make it juuust a little easier to pretend to be healthy and take in some basketball. According to Tony, a 20oz smoothie is $7, which is around a $1 – $2 markup compared to outside stores once tax is accounted for. They have a greatly reduced venue menu, as is to be expected.
While many of the naming rights hopes had more panache than Smoothie King Center, many of reasonable possibilities did not. Carnival might have been the best reasonable business with some local ties, as they use New Orleans as a homeport for two ships. The tie is clear, but the Pelicans also do not play in the arena during the height of Carnival season. Mercedes-Benz is an amazing sponsor, and perhaps that comparison (potentially unfair, admittedly) creates a minus for the name. It’s not like Amway, Staples, or some airline has a mega-tie-in.
Smoothie King evokes the concepts of health, performance, food, and fun, all of which are related to basketball and New Orleans . . . ok, scratch the health of the local food from the list, but have hospitals and fish . . . do onions and garlic count as vegetables? It tastes good enough to justify the costs, regardless.
Airlines, telecommincations, insurance, and more necessary but boring companies sponsor arenas. Here’s the list: Air Canada, American Airlines, Amway (Direct Marketing), AT&T, Bankers Life (Insurance), Barclays (Finance), BMO Harris (Finance), Chesapeake Energy, Energy Solutions, FedEx, Moda Health (Insurance), Oracle (Technology), Pepsi, Philips (Technology), Quicken Loans, Sleep Train (Mattresses), Staples (Retail), Target, Toronto-Dominion (Finance), Time Warner, Toyota, United Airlines, US Airways, Verizon, and Wells Fargo (Finance). I included the basic sector of the company in parentheses where I saw fit.
Snoozer of a list, huh? Some of those have some class (e.g. Barclays), but what does it have to do with basketball? Nah, that building and team are just a billboard for some multinational financial organization. The ones I get are, at least.
Smoothie King is something that the team and fans can share on a regular basis, but is more delicious than cable or a cell phone and more fun than electricity (most of the time). The local franchises (at least) have a deal with All-Pro New Orleans Saints Tight End Jimmy Graham.
I’ve thought about this for a few days, and the more I think about it, the more I like it. Well, I like the potential. As always, we’ll see how this plays out.
My thought: $1 off smoothies when the Pelicans keep their opponents below 100 to reflect a desire to keep calories down, promote low calorie drinks all while emphasizing the defense? People will pay attention to offense regardless, after all.
With Smoothie King’s app, who knows what sort of promotions that can be run . . . the app replaced the punch cards, for the long-time-but lost patrons.
The press conference featured the Benson family, Commissioner Silver, Wan Kim, Ron Forman (LSED), Jefferson Parish President John Young, Mayor Mitch Landrieu, and Governor Bobby Jindal.
Currently, there are no plans to replace McDonald’s fries promotion with a smoothie one, but some promotions are being whipped up.
The naming rights agreement between the Pelicans, the State of Louisiana and Smoothie King is for 10 years. A new Smoothie King Center logo will adorn the roof of the building and the new Smoothie King Center name and logo will appear on the facility’s exterior façade, on the Pelicans home basketball court, the team’s scoreboard and in numerous locations throughout the facility.
The Smoothie King Center will also feature visuals that reinforce the brand’s new purpose‐driven positioning. Fans will see messages encouraging them to “Feel Taller” and “Get More Jump in Your Game” with Smoothie King’s Energy and Fitness Blends.
Now that the franchise has cleared this major hurdle, the next big change for the organization is completing the renovations to the Smoothie King Center.
After that, there will more more things going on, though on a smaller scale. Look for more activity in Champions Square, changes to the area around the Center, and a little more of Center real estate during other events, like Saints games.
We have pictures from the event and more on twitter (@BourbonStShots).
Finally, here are some logos.
While I'm at work, I shouldn't be thinking about the possibilities for Smoothie in relation to the Pelicans Dance Team, but I can't help it....