November 21, 2006 > Cisco banks on Oakland A's ballpark pact to showcase technologies
Cisco banks on Oakland A's ballpark pact to showcase technologies
by Jordan Robertson
SAN JOSE, Calif. (AP), Nov 15 _ Cisco Systems Inc.'s partnership with the Oakland Athletics baseball team to build a new ballpark is more than just a naming-rights deal.
The San Jose-based networking equipment maker is banking that the agreement, announced Tuesday, will provide the ultimate consumer showcase for its products and drive higher sales as demand skyrockets for integrated data, voice and video capabilities over the Web.
The pact calls for Cisco to pay $4 million annually over 30 years to brand a new A's stadium in Fremont as Cisco Field. The company is selling 143 acres of Cisco-controlled land to the A's for an undisclosed amount, and the A's will be shouldering up to $500 million in stadium construction costs with a combination of public and private financing.
But Cisco's Chief Executive Officer John Chambers said in an interview with The Associated Press that the company's exclusive technology deal for the stadium makes the arrangement more than a branding exercise.
``What's in it for Cisco is that this could be the next inflection point for literally how you load networks,'' Chambers said. ``This, to me, is not only tremendously exciting _ making a difference, having the A's stay in our community _ but it also really is the future of sports and the future of how technology will be enabled for the fan experience, for the benefit of the revenues and for the benefit of the community.''
The company will be the park's official technology partner, meaning that the A's will outfit it with Cisco gear to build a converged network that will support data, voice, video and wireless services.
Cisco is touting the ballpark as the stadium of the future, with technology enabling fans to buy souvenirs and concessions from their seats with mobile devices, watch instant replays on laptop computers and select different ballpark cameras remotely to watch the game.
Though it makes most of its money from corporate clients, Cisco is trying to shed its image as solely a maker of networking infrastructure gear, hoping to capitalize on products and services that utilize the network. One example is TelePresence, a technology similar to video conferencing that delivers a three-dimensional feeling that the participants are all in the same room.
``Cisco is making a brand move to the consumer and the smaller and medium businesses, so that in and of itself would support (the deal),'' Chambers said. ``But the real play here is this is how technology will enable personalization. This is where the future of technology is going, both in the business world and your home.''
A's owner Lew Wolff, who tried unsuccessfully for years to find a suitable site in Oakland for a new stadium, said the Fremont ballpark could have as few as 30,000 seats, making it one of professional baseball's smallest. Wolff said the partnership with Cisco will enable the team to drive higher ticket sales and attract new fans by creating a more intimate fan experience and tapping into the Cisco brand name.
``We're in a world of technological change,'' Wolff said. ``But when I got to Cisco and saw all of the things that could go into a ballpark, (I saw that) it will enhance the fan experience without distracting the fan from what's happening on the field.''
But some financial analysts said Cisco could damage its brand if fans experience problems with the technology in such a high-profile setting.
``It's clearly edgy on Cisco's part _ more risk, more reward,'' said Sam Wilson, a communications equipment analyst with JMP Securities LLC. ``If the ballpark's phenomenal and the team's a winner, and the technology works, it's a home run for Cisco. But if the team's a loser and the technology doesn't work, it's going to be a strikeout _ and Cisco will have egg on its face.''
Stadium naming deals also have had a checkered past, with some high-flying companies like Enron and Adelphia going belly-up after buying naming rights and stadiums feeling burned after the dot-com collapse by companies that weren't financially solvent.
Companies also have struggled to measure the return on their investment for such deals.
But William Chipps, a senior editor with IEG Sponsorship Report, which tracks and analyzes corporate sponsorships, said Cisco could directly measure its profits from the deal if clients bought more Cisco products after a visit to the park.
``The fact that Cisco isn't just slapping their name on the venue, they're going beyond that, they're using this is as a product showcase, I see this as making sense,'' he said.