All Things D’s Arik Hesseldahl reports today that Valley tech giant HP is in talks to end its naming rights deal at the San Jose Arena. The current deal runs through 2017, with HP pushing to end it as early as this summer. CEO Meg Whitman, who previously helmed another San Jose tech firm, eBay, is apparently reevaluating HP’s marketing efforts, and that means curtains for sports naming rights. It’s too bad that HP is pulling out, though given the company’s struggles the past few years, some restructuring is certainly in order.
HP didn’t originally negotiate the current naming rights deal. It was inherited when HP merged with then-rival Compaq of Houston. At the time Compaq already had naming rights to the old Summit arena in Houston, which created the need to distinguish the two venues by locale. Shortly after the merger, the arena took on the seemingly synergistic HP Pavilion name (“Pavilion” is a longstanding name of HP’s consumer desktop PC line), though it’s unclear whether the name association actually helped sales.
SAP may be stepping into the void created by HP’s departure. The enterprise software company already has had its name on the annual ATP tennis tournament held annually at the arena (which is moving to Rio de Janeiro starting next year), and SAP chairman Hasso Plattner just finished acquiring up to 90% of the San Jose Sharks. Plattner may have carte blanche to make the deal as he pleases, but shareholders may be wary of a move considering that SAP lost nearly $4 billion last year. SAP may push for a lower cost naming rights deal since they could be considered San Jose’s “preferred partner”.
I imagine that if the naming rights deal transfers from HP to SAP, the arena will simply be called SAP Arena or SAP Arena at San Jose. Of course, the arena already has its own nicknames, “The Tank” and “Shark Tank”, that locals and hockey fans will continue to use until the arena is eventually replaced.
P.S. One of SAP’s biggest competitors is Oracle, who has naming rights at the Arena in Oakland. A copyright trial between the two companies is ongoing, as a judge considered a $1.3 billion damages award to victorious Oracle excessive. I doubt that this will make Larry Ellison more or less likely to extend the Oracle Arena naming rights deal – especially if the Warriors leave for San Francisco – but it’ll probably chap Ellison’s hide to know that every time he flies one of his private jets into SJC, he’ll see the SAP logo on the large arena rooftop below. It wasn’t that long ago that rumors had Ellison bringing a NBA franchise such as the Kings or Grizzlies to San Jose. There’s absolutely no chance of an Ellison-helmed NBA team coming to San Jose as long as SAP wields the power at the arena.
P.P.S. – Given Ray Ratto’s repeated butchering of the name “San Jose” to “San Azzay”, I suppose that for Ratto SAP could mean “San Azzay Pavilion”.