Calgary's most visible corporate nameplate may come up for grabs next summer as the Alberta businessman who made his company the Saddledome's chief sponsor mulls a possible exit from the venue's naming rights.
Jim Kinnear, whose Pengrowth Management Ltd. bought rights to the Pengrowth Saddledome in 2000, is pondering giving up the high profile sponsorship, sources close to the company said.
The seeds of a potential exit were sown this summer, when Mr. Kinnear's long-time association with Pengrowth Energy Trust, a multibillion-dollar company he founded, began to wane. Mr. Kinnear's company had for many years held a management contract with the trust. But that contract, worth an average of $8-million a year in the past three years, came to an end in June. Then Mr. Kinnear retired as chairman and chief executive officer of Pengrowth Energy Corp., which administers the trust, last week. He remains a director.
Asked whether he will continue the Saddledome sponsorship, now that his ties to the company are much diminished, he replied: "A very good question."
"We had the naming rights there for 10 years. It's up for renewal June 30. And we're just considering options," he said. "Hopefully we've been able to contribute to a very strong franchise, a very strong operation in the past. But then we have to see what we do going forward."
Mr. Kinnear said a decision on whether to maintain the naming rights remains a "work in progress." However, he said he plans to use a new name, rather than Pengrowth, for future ventures, to avoid confusing his company with the public company it is no longer tied to.
For its part, Pengrowth Energy Trust is not interested in assuming the naming rights, said vice-president and chief of staff Jim Donihee. The trust "has indicated that we don't have an intention to carry that on," he said. The naming rights "actually belonged to Jim anyways. It's his decision as to whether he wants to enter into negotiations with the Flames and carry that forward or not."
A well-known Calgary philanthropist, Mr. Kinnear has never made public how much the naming contract is worth. It was signed a year after Air Canada paid $40-million in a 20-year deal for the Air Canada Centre in Toronto, and came as a huge boost to the then-struggling Flames.
The contract included an agreement by Mr. Kinnear's company to buy 200 season tickets annually.
Flames president Ken King has said the naming rights are of "enormous" importance as a stable source of revenue.
In a brief interview, Mr. King declined to comment on whether Mr. Kinnear's company has renewed the naming contract.
"That's obviously confidential information," he said. "We have a fully executed agreement with them. They've been exceptional naming rights partners and we're thrilled to be continuing on with them."
Tough economic times could make it more difficult for companies, especially those in the hard-hit oil patch that have typically sponsored Calgary institutions, to spend the millions to get their name on a venue like the Saddledome, said Todd Hirsch, senior economist with ATB Financial.
"We're still at a very weak point in the cycle here, and companies in Alberta are going to be examining every cent that goes out the door," he said. "They're going to have to be really certain that this is going to give them some return. And that may or may not be the case with [a]high-profile sponsorship like this."
Natural gas companies have been especially hammered by the downturn. Banks, however, have done sufficiently well that Bank of Montreal unveiled a major Calgary Stampede sponsorship this July. And the revival of crude prices has put oil companies on solid enough footing that they may consider a major sponsorship, said Adam Legge, chief economist at Calgary Economic Development.
"When you begin to see signs of recovery, that's when it's strategic to begin some of your marketing, so you're positioned well on the upside," he said.
"It's just a matter of, are companies still realizing that as part of their brand strategy? I really don't know whether it's as popular as it used to be."