The Pittsburgh Penguins are shifting their arena naming rights from Consol Energy Center to PPG Paints Arena.
The move comes as Pittsburgh-based PPG increases its efforts in the retail paint business and Consol, based in suburban Cecil Township, has struggled with financial losses while transitioning from a coal-based firm to one fueled by the future of natural gas.
"It's a great opportunity for PPG and it's a great opportunity for the Penguins," team president David Morehouse said at a news conference Tuesday. "It's not going to be just a name on the building."
Morehouse and Bryan Iams, PPG's vice president of corporate and government affairs, said the team and worldwide coatings company plan cross-promotions to boost both brands, as well as the profile of both in the community.
"What you may see is a little more of a fan interaction because of the retail component of their business," Morehouse said.
Iams said the company sees "a significant opportunity from a growth standpoint. A great opportunity to increase sales in all our stores." The naming rights deal also boosts the company's profile in the Pittsburgh region where 2,500 of its 46,000 worldwide employees are based.
Consol became a major Penguins sponsor before they won the Stanley Cup in 2009, while still playing in the since-razed Civic Arena across the street. The energy company signed on as the new arena's title sponsor before it opened in 2010. The 21-year deal was estimated to be worth about $105 million, though the terms were never formally disclosed, nor were those of the new deal.
Consol wasn't represented at the news conference, but its president and CEO, Nick DeIuliis, issued a statement, saying the company's "mission back then was to catapult the region to new heights by catalyzing the creation of a venue to benefit the entire tristate community. We also wanted to keep a hockey team in our region," he said, referring to the public-private partnership that funded the arena and prevented the Penguins from moving.
Ron Dick, an associate professor of sports marketing at nearby Duquesne University, said the deal makes sense for all involved.
"There are 14 years or so left on this deal, and compared to other buildings nationally, the $100 million or so price tag is pretty low," Dick said. "Pittsburgh is pretty price-sensitive. The (New York) Mets get $400 million for the same 20-year period to have Citibank's name on their field."
"But it all comes back to the current state of the gas and coal industries," Dick said.
Consol reported a net loss of $603 million for the quarter that ended June 30, and its latest earnings have yet to be published.
Consol has been cutting costs — it won't renew a 10-year naming rights deal that expires in 2017 for the ballpark of the minor-league Washington Wild Things about 20 miles away — and earlier this year announced plans to resume gas drilling in the Utica and Marcellus shale formations.
Meanwhile, PPG has sold its flat glass business for $750 million to a Mexican firm in July, and the company founded at Pittsburgh Plate Glass in 1883 now realizes most of its income from paints and other coatings.
Signage and other changes are expected to be in place by the time the Penguins open the season at home Oct. 13.