Source: AT&T Out as Spurs’ Arena Sponsor, Minority Owner

The San Antonio Spurs are in the hunt for a new naming-rights sponsor for their home arena as AT&T has indicated it won’t renew its current deal, a source told Front Office Sports. 

It’s expected the arena will remain known as AT&T Center until the contract expires in fall of 2022, although the telecom giant exited the team in another manner in recent weeks. Front Office Sports learned that AT&T sold off its minority interest in the Spurs, which stood at about 7% of the team. AT&T later confirmed the sale to FOS.

With the Spurs valued at $1.85 billion, it’s estimated that AT&T made about $125 million from its original investment in the Spurs more than two decades ago. The chunk of the team held by AT&T was part of the 30% stake in the franchise that investment firm Sixth Street and tech billionaire Michael Dell purchased last month. 

“This sale is a result of the ongoing strategic review of our balance sheet and assets to identify opportunities for monetization,” said Fletcher Cook, VP of corporate communications for AT&T, in an email to FOS. “We want to ensure that our assets support our overall strategy and areas of market focus. Where this is not the case, we transition them to owners who will provide incremental stewardship and investment.”

The reasons for not renewing are twofold, a source told FOS. 

AT&T merged with SBC — the arena had been known as the SBC Center — and company headquarters moved from San Antonio to Dallas after the merger was completed in 2005. The company currently pays close to $20 million annually for the naming rights of the Dallas Cowboys’ stadium. 

Another factor is AT&T reassessing its debt load and looking for cost-cutting measures, a factor in a deal to merge its WarnerMedia unit with Discovery announced in May. 

“This sale is separate from AT&T’s team sponsorship and naming rights agreement,” Cook said. “We continually review our sponsorship strategy, so I can’t comment on our future plans.”

Messages left with the Spur were not returned Friday. 

Here are some recent naming rights deals: 

• In March, the Miami Heat landed a 19-year deal with crypto company FTX that pays about $7 million per year. 
• After New Era bowed out, Highmark Health became the stadium sponsor for the Buffalo Bills. The deal announced in March is worth $6 million annually. 
• Caesars Entertainment agreed to a 20-year deal for the Superdome, home of the New Orleans Saints. The Saints will fetch about $10 million per year. 

At about $2 million per year, AT&T’s naming-rights agreement with the Spurs was one of the cheapest in pro sports — even for a franchise in one of the smaller markets in major U.S. sports.