Pens assign naming rights to arena
The new home of the Penguins is little more than a foundation right now, but as of Monday, it officially has a name.
The team announced that Consol Energy Inc. won the naming rights to the state-of-the-art arena under construction along Centre Avenue. The 18,087-seat venue will be called the Consol Energy Center.
"We're very happy with this agreement, and we feel this is the perfect partnership for us moving forward," Penguins president David Morehouse said. "And we think this is great for the region."
Morehouse would not disclose financial terms of the 21-year deal that was reached over the weekend. Based on other naming-rights agreements, however, it could be worth as much as $5 million a year to the Penguins.
The $321 million arena is scheduled to open in 2010.
Consol Energy is the nation's largest producer of bituminous coal and the nation's second-largest coal producer overall, trailing Peabody Energy.
The company became a major sponsor of the Penguins in the 2007-08 season, with advertising spots during broadcasts and on the Jumbotron at games. Senior vice president of external affairs Tom Hoffman said that Consol Energy was approached by the Penguins approximately six months ago to discuss naming rights, and the two sides became seriously involved in negotiations two months ago.
The deal was completed over the weekend.
"We had lots of internal debate about it -- that shouldn't be a surprise," Hoffman said. "But in the end, our view was we don't want to pass this by. This is an opportunity that might not come again."
The Penguins' current home, Mellon Arena, is the oldest in the NHL. Morehouse said that Mellon Financial Corp. was among a number of potential partners the team spoke with, but the company chose not to move forward in negotiations.
While many companies are scaling back on sports advertising because of economic woes, Hoffman said that wasn't a major concern for Consol.
Consol has annual revenues of $3.8 billion, and owns 17 bituminous coal-mining complexes in six states and reports proven and probable coal reserves of 4.5 billion tons, according to its Internet site.
"We already have a lot of our coal and gas sold, so we're not worried about 2009," Hoffman said. "But, frankly, we're a long-term business. The coal we're mining today in Pennsylvania, we bought 100 years ago. So the economic climate, from our standpoint, wasn't something we worried about."
Hoffman said that Consol, which recently moved to a $50 million complex at the Southpointe II business park in Washington County, has 8,000 employees. More than 6,000 are from this area, he said, making the arena a significant recruiting tool. If the region grows, it will help Consol continue to prosper.
Penguins president Mario Lemieux said the deal would help the team to remain competitive in the NHL.
"It gives us the ability each and every year to go out and compete for the Stanley Cup," Lemieux said. "We're looking forward to playing in the new Consol Energy Center."
The most recent NHL arena to open was the Prudential Center in Newark, home to the New Jersey Devils and New Jersey Nets. The insurance company agreed in January 2007 to pay $105.3 million over 20 years for the naming rights to the venue, which opened for the 2007-08 season.
Jobing.com acquired naming rights to the former Glendale Arena, home to the Phoenix Coyotes, in October 2006, in a deal worth $2.5 million per year for 10 years.
Morehouse said the new arena will help draw musical acts that often skip Pittsburgh because of difficult rigging at Mellon Arena as well as sporting events that could include the NHL All-Star Game, NCAA hockey Frozen Four and NCAA regional basketball tournaments.
"We're going to be exploring all possibilities with regard to sports and world-class concerts," Morehouse said. "With a modern, new facility, we expect to get more concerts and more shows, and definitely more sporting events."