Not-Yet-Built Shanghai Arena Gets Corporate Sponsor

There are no notable professional sports teams in Shanghai -- yet -- but the city already has something that the Dallas Cowboys, New York Giants and Washington Nationals covet: A naming-rights-deal for a new sports venue.

Today Mercedez-Benz announced a 10-year deal to put its name on a forthcoming arena in Shanghai, the first such sponsorship agreement in China.

The deal is worth between $75 and $100 million, according to the New York Times, and represents a coup for Anschutz Entertainment Group (AEG) and the NBA, which have a joint venture to develop and manage a dozen new arenas in China and are partners on the Shanghai venue. The 18,000-seat arena is scheduled to debut in time for next May's World Expo and features a sci-fi-inspired, flying-saucer-like exterior that AEG president Tim Leiweke predicts will become "one of the most famous, if not the most famous, arena designs in the world."

The question is who will actually use the $280 million arena, since it does not currently have an established pro sports team to serve as its "anchor" tenant and fill the venue's schedule. The Shanghai Sharks of the Chinese Basketball Association finished last in the 18-team league during the 2009 season, and have trouble paying players' salaries or drawing fans to the 3,500-seat Luwan Stadium. (Yao Ming, the Houston Rockets star who played eight years for the Sharks, is currently in discussions to become the team's new part-owner).

In 2008, the NBA partnered with ESPN and four Chinese entities to establish a business unit in China that many observers believe will ultimately produce an NBA-branded league in the world's most populous country.

But so far the division has focused on promoting the sport and conducting training sessions for coaches and players. The NBA is also advising the CBA on basketball operations, marketing and league functions, NBA spokesman Mike Bass told FanHouse. For now, however, the NBA has decided to "leave for another day in the future the potential collaboration on a league." The league does plan to schedule pre-season NBA games at the Shanghai arena, beginning 2011.

For AEG, the Shanghai arena deal represents another milestone for a company that already owns or operate arenas in Los Angeles, London and Berlin, and has ownership stakes in the NBA's Los Angeles Lakers, the NHL's Los Angeles Kings and the Los Angeles Galaxy of Major League Soccer.

The pact with Mercedes is also significant because it comes at a down time for stadium naming-rights deals in the U.S. The Giants and New York Jets' new 82,500-seat stadium in New Jersey, which opens in May, and the Cowboys' massive venue in suburban Dallas, which cost a reported $1.3 billion to build, are both currently seeking sponsors. Lower-profile venues are also having trouble: Stadiums in San Francisco and Jacksonville, as well as Nashville's 13-year-old arena, are all seeking new deals after companies walked away from or did not extend their naming-rights agreements.