Company asks out of naming-rights deal at Hollywood
By the time the Kodak Theater comes to life for the Oscars on Feb. 26, it may no longer be the Kodak Theater. Or sponsored by anyone else for that matter.
The company wants to void its 20-year, $75 million contract, which was inked in 2000. If approved, that would leave just 11 days before the live broadcast of the 84th Academy Awards to have a new sponsor locked down for the Oscars. Depending on the court’s ruling on Kodak’s request, real estate firm CIM Group, which now owns and manages the Hollywood & Highland complex, would have the task of reaching out to potential new sponsors.
Naming rights typically don’t come together that quickly, however.
It took nearly seven months to broker Kodak’s initial deal to brand the theater at the Hollywood & Highland complex, which opened its doors in 2001, Variety has learned.
And finding a new, deep-pocketed sponsor will come down to a number of factors that developers need to hammer out with interested marketers, including how the brand will appear on the building and on air during ABC’s broadcast of the Oscars, whether the naming rights involve the entire Hollywood & Highland complex, and the overall pricetag and life of the deal.
Marketers, meanwhile, are generally keeping a tighter grip on their wallets due to the down economy.
The chance for a deal to come together before the Oscars “is pretty slim,” said Jeff Knapple, who negotiated the original Kodak deal but has also brokered high-profile naming rights pacts that include last year’s pricey MetLife Stadium deal in New York City, as well as Houston’s Toyota Center, Minneapolis’ Target Center, London’s Emirates Stadium, Atlanta’s Philips Arena and L.A.’s Staples Center and The Home Depot Center.
When Kodak signed on as the theater’s sponsor, the 3,000-seat venue was still in mid-construction and Kodak bought into its Hollywood heritage as the film stock provider to many previous Academy Award winning pics. While other marketers were interested, none wanted to buy into the kind of exposure Kodak has received.
What helps now, Knapple, said, is that “you have an established building with a 10-year track record and the kind of events that go on there.”
Since its opening, the Kodak also has served as the home of Fox’s finale of “American Idol,” the ESPY, BET and Daytime Emmy Awards, as well as Cirque du Soleil’s “Iris.”
The Academy of Motion Picture Arts and Sciences has no active involvement in who lands the new deal but does have veto power over the selection.
“The Academy has a (contractual) right to make sure the name fits,” said Academy prexy Tom Sherak at Wednesday’s ballot-mailing ceremony in Beverly Hills.
Kodak’s proposed withdrawal comes at a time when CIM has seen its most prestigious client exercising its right to shop for another venue: AMPAS has reportedly been talking with the Nokia Theater as an alternative, though Sherak said talks with CIM were ongoing.
“The thinking was, if we have this right, let’s exercise it and then let’s go back and talk to them,” Sherak said. “We don’t necessarily want to leave Hollywood.”
While Hollywood & Highland is a high-profile complex with heavy foot traffic and exposure, interested sponsors will likely come down to companies that want primarily to associate their brands with the Oscars, not a shopping center with a Hard Rock Cafe and American Eagle Outfitters.
“It’s about the cache of the Academy Awards, and less about the visitor that comes to shop at Hollywood & Highland,” Knapple said.
That narrows potential names down primarily to previous Oscar sponsors. Those have included American Express, AT&T, Coca-Cola, General Motors, Hyundai, J.C. Penney, Johnson & Johnson, Macy’s, Microsoft, Sprint and Unilever.
Winning the rights could be a relative steal, considering the $700 million Farmers Insurance paid last year for putting its name on the new downtown football stadium. The MetLife deal for the new New York Giants stadium took four years to complete — the longest Knapple has spent on a single pact, he said. Before that, the longest negotiation took 19 months.
There’s another notable wrinkle to Kodak’s request: How quickly its name can be removed isn’t yet clear, due to the tight timing of the Oscar broadcast and upcoming court proceedings. And, if Kodak’s request is granted by the bankruptcy court, the Academy would also have to remove Kodak from its Oscar website, press and marketing materials.
Kodak filed for Chapter 11 bankruptcy protection on Jan. 19 through the United States Bankruptcy Court, Southern District of New York.
A lawyer from KattenMuchinRosenman, which represents lease-holder CIM, declined to comment.