In 2001, Michael Li took Engineering 110, Venture Design: The Startup Company, at UC Berkeley. As part of the course, Li wrote a business plan for a new company. Today, Kabam, the mobile gaming company Li founded with two other Cal grads, and the university unveiled a 15-year, $18 million agreement for naming rights to the field at California Memorial Stadium.
“This is a great Cal story,” said athletic director Sandy Barbour. “It’s an opportunity for us to form a unique academic and athletic partnership. We’ve hit a home run here.”
According to Barbour, the deal is the largest in the country for college field naming rights. The University of Maryland sold naming rights for the field at its Byrd Stadium to Chevy Chase Bank for $20 million, but that was over 25 years.
“I can’t imagine a closer tie for a CEO with the alma mater he loves,” said co-founder and CEO Kevin Chou, who majored in business at UC Berkeley and graduated in 2002.
The agreement between Kabam and the university extends beyond the field naming rights. The funds also go to a scholarship and internship programs, speaking engagements, and other partnerships on the campus centered around innovation and technology. Kabam will also pay for football tickets for 500 veterans and their families each season, in recognition of the stadium’s origin as a memorial to Californians who gave their lives in World War I. In addition, Cal Athletics will as a result of the deal donate $25,000 to the University Library annually.
According to John Wilton, vice chancellor for administration and finance, the university has a detailed process involving administration, faculty, students and staff when it considers any naming rights. The Kabam proposal, he said, was approved unanimously.
“We set out to find the right partner to help us pay for these wonderful new facilities,” Wilton said. “We wanted to do it in the right way. We wanted a company we could form a broad relationship with, a relationship that could extend far beyond athletics. We hoped to find a local company with strong ties to innovation and technology. We think we’ve found all those things.”
Both Wilton and Barbour answered a firm no to questions on whether naming rights to the stadium were up for discussion.
The university spent $321 million to renovate Memorial Stadium and make it seismically safe. It funded that work and the $153 million for the adjacent Simpson High Performance Athletic Center with $445 million in debt. The plan is to pay off the debt with a combination of premium, long-term seat sales, philanthropy, facility rentals, new media revenues and investment revenues. Seat sales have lagged initial plans, but Wilton said there is now $54.7 million in the stadium endowment, which is $2 million ahead of expectations set a year ago.
“We’d be doing this arrangement irrespective of whether we had the debt,” he said. “We’d love to fund athletics in a more robust manner.”
Wilton said that while Cal had one of the largest athletic programs in the country, the dollars spent per student is among the lowest.
“Our program would have ranked between Germany and France in terms of medals won at the last Olympics,” Wilton said. “The program excels. It’s 29 sports; it’s not just football.”
Wilton was also asked whether the Kabam deal was indicative of a stronger connection for the university with technology companies started by Cal students and faculty.
“There’s a university not far from here in the private sector,” Wilton said, “and where they’ve excelled is in publicity. Graduates from Berkeley have started many companies, but we haven’t been very good at publicizing it. We’re going through a massive rethink on how we foster innovation on campus. We think we should be a lot more helpful in that process and hopefully facilitate them giving back to the campus in the long run.”
Kabam was originally founded to write Facebook apps, but four years ago it shifted its focus to free-to-play games for “traditional players” — mostly males. It has been ranked by Deloitte as the fastest growing Internet media company in the Bay Area for the last two years and the 17th fastest growing company overall in the country. Revenues this year are expected to exceed $325 million, annual growth of 80%. The company employs 700 people, with its headquarters in San Francisco and a major development studio in Beijing, which is led by Li.
Chou, Kabam’s CEO, was asked in the press conference what kind of fan he’d been as an undergraduate. “Did you sit on your hands?” a reporter asked.
“When I was an undergraduate, we stood the whole game,” Chou replied. “Now I go to one or two games a year. I’m not a season ticket holder.”
“You are now,” Barbour said.
Related:
Cal Memorial Stadium unveiled after 21-month renovation (08.27.12)
With Stadium reopening near, Cal revamps ticket sales (08.07.12)
Old Cal Memorial Stadium for sale, one bleacher at a time (06.27.12)
Final section of press box is installed at Memorial Stadium (10.13.11)
UC Berkeley’s best work on renovating Memorial Stadium (09.09.11)
Inside Berkeley’s newest, most discreet building (08.08.11)
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