So long, CenturyLink Center. CHI Health buys Omaha arena naming rights in $23.6 million deal

Get ready for basketball games, concerts and other events at the new CHI Health Center Omaha.

That’s the new name for the CenturyLink Center, which was originally the Qwest Center.

And no, it’s not a hospital or health care facility — it’s the same arena and convention center in downtown Omaha.

CHI Health bought the naming rights under a 20-year agreement worth $23.6 million.

The Metropolitan Entertainment and Convention Authority board voted 3-0 on Wednesday to approve the deal. MECA board chairwoman Diane Duren and board members Jay Noddle and Tom Kelley voted to approve the agreement.

Board members Susie Buffett and Dana Washington were absent.

Headquartered in Omaha, CHI Health is part of Catholic Health Initiatives, a national nonprofit health system based in the Denver area.

CHI Health operates Creighton University Medical Center-Bergan Mercy and other hospitals in the metro area.

The arena already has a significant connection to Creighton: It is home to Creighton basketball.

“CHI Health and Creighton are two Omaha powerhouses,” said Dr. Cliff Robertson, chief executive of CHI Health. “We’re now connected through this facility.”

Some early reviews were negative, with people posting on social media that the new name sounded like a hospital or medical center.

“Hate the name,” one person posted on Twitter. “Sounds like I’d be going for a colonoscopy, not a concert.”

“Hey, let’s go see a concert at a hospital!” another wrote.

Still another: “I hope if my doctor tells me I have to go to the CHI Health Center (Omaha), it’s for a great concert. Maybe insurance will pay for it?”

Officials shrugged off the notion that people may confuse the venue for a hospital.

“There’s going to be a transition period, but I think it’s going to be a short one,” said Roger Dixon, MECA’s president and CEO.

It takes about 2½ years for an arena’s new name to sink into people’s consciousness, Phani Tej Adidam, a professor of marketing and entrepreneurship at the University of Nebraska at Omaha, has said.

Robertson said officials talked internally about potential confusion.

“As we started to think about it, we thought, well, how many folks that are going to come to the Elton John concert in February really think they’re going to be going to a hospital or would be confused in that way?” he said. “So we don’t think it’ll be a big issue.”

The CHI Health Center Omaha name is effective Sept. 1.

Others wondered how CHI Health, a nonprofit, can afford a naming rights contract worth millions of dollars.

CHI Health said the funding will come from the health system’s marketing budget and does not pull dollars from other areas of health care operations.

And it won’t affect the cost of health care for patients, Robertson said.

“We have money set aside every year for marketing,” he said. “These funds will come out of those budgets that we’ve had for years and years, which is like one-tenth of 1 percent of our total expenses.”

Robertson said CHI Health’s biggest expense is labor.

CHI Health’s parent company, Catholic Health Initiatives, reported revenue of $15.5 billion for its fiscal year that ended in June 2017. During that period, it logged an operating loss of $585.2 million. It’s in the final stages of a tie-up with San Francisco-based Dignity Health, which had about $12.9 billion in revenue last year.

The new company is expected to be based in Chicago.

Robertson said the merger won’t change CHI Health’s name locally, at least not now.

“Who knows what can happen 10 or 15 years from now in terms of a rebranding effort,” he said. “What we know today is there is no re-branding of the local market.”

The naming-rights agreement for the arena is longer and pricier than the current 15-year, $14.05 million naming rights contract that will expire in August.

Under the new agreement, CHI Health will pay MECA roughly $1 million a year to sponsor the venue until 2038.

In addition to the naming rights, CHI Health will get to use one corporate suite and four club level seats to all events at the arena. CHI Health will also get to use the convention center for company events twice a year and one “VIP reception” for as many as 30 employees or business associations.

Robertson said CHI Health would like to the use the arena and convention center for health screenings and health education events .

Daniel Hendrickson, president of Creighton, said the new name will help support greater health and well-being for those who visit the venue.

“It is truly wonderful that a place that brings so much enjoyment and entertainment to citizens of our region and to visitors will now become a venue that will also advance better health,” he said. “I cannot think of a more winning proposition.”

MECA, the nonprofit that operates the publicly owned arena and convention center, had signaled that it was looking for a new naming rights sponsor.

In January, MECA approved a $10,000-a-month contract to a consultant to help secure a name. Under that agreement, MECA will pay Professional Sports Partners a $1.1 million bonus for its work.

Dixon said the consultant talked to 60 entities. That group was whittled to three finalists, all local companies, he said.

This will be the third name for the downtown Omaha arena and convention center. It opened in 2003 as the Qwest Center and had that name until 2011, when CenturyLink acquired Qwest.

CenturyLink had offered to keep its name on the venue . A CenturyLink spokesman said in a statement that the company had taken great pride in its nearly 15-year sponsorship.

The naming rights money helps pay for upkeep and upgrades and is important for MECA’s budget. MECA brought in $42 million in revenue in 2016-17. That was offset by about $37 million in expenses.

Arena naming rights deals

CHI Health Center

$23.6 million for 20 years, starting Sept. 1, 2018

CenturyLink Center, Omaha

$14.05 million for 15 years, starting in 2003

Baxter Arena, Omaha

$4 million for 10 years, starting in 2015

TD Ameritrade, Omaha

$20 million for 20 years, starting in 2011

Werner Park, Papillion

$1.525 million for 5 years, starting in 2011.

The contract was extended through 2020 in 2014, at the same $305,000 a year.

Pinnacle Bank Arena, Lincoln

Announced at $11.25 million for 25 years, starting in 2011.

But the bank used an early payment provision of the contract that gave them a discount for paying early rather than in annual installments. They paid $6.731 million for 25 years.

Wells Fargo Arena, Des Moines

$11.5 million for 20 years, starting in 2005

U.S. Cellular Center, Cedar Rapids, Iowa

$3.8 million for 10 years, starting in 2012

Tyson Events Center, Sioux City, Iowa

$4 million for 20 years, starting in 2003

Denny Sanford Premier Center, Sioux Falls, South Dakota

$20.75 million for 25 years, starting in 2014

Sprint Center, Kansas City

$2.5 million a year for 25 years, starting in 2007 ($62.5 million total)

However, that was contingent upon the stadium landing an NHL or NBA team. Absent that team, which the city does not have, it pays $1.7 million a year.

InTrust Bank Arena, Wichita

$8.75 million for 25 years, starting in 2009

KFC Yum! Center, Louisville, Kentucky

$13.5 million for 10 years, starting in 2010

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