Climate Pledge Arena, shown in a rendering, will open in 2021 as home to a new NHL team and the WNBA’s Seattle Storm. (Courtesy NHL Seattle)

Amazon buys naming rights for first carbon neutral arena to spotlight sustainability campaign

Online retail giant Amazon has acquired naming rights to the NHL Seattle arena, which will be called Climate Pledge Arena. The venue is poised to set a benchmark in sports and entertainment as the first carbon neutral arena, powered 100% by renewable electricity down to the Zamboni shaving the ice floor.

The arena name ties in with the agreement Amazon signed in 2019 with activist group Global Optimism to push for corporate America to achieve net zero carbon by 2040. Separately, Amazon announced this week The Climate Pledge Fund, a $2 billion venture capital fund it has launched to invest in clean energy.

The naming rights deal is a partnership among Amazon, NHL Seattle and arena developer Oak View Group, which is funding the massive reconstruction of old KeyArena, a project designed by Populous and built by Mortenson that has now reached the $1 billion threshold in part because of the upgrades required for carbon neutral status.

Tim Leiweke, CEO of Oak View Group, owner of Pollstar and VenuesNow, would not disclose the financial terms of the deal, but naming rights for big league arenas typically extend 20 years. 

“It’s a good deal; it worked out well for both sides,” Leiweke said. “The biggest winner is the planet.”

Sources said the total value runs between $300 million and $400 million, which places Climate Pledge Arena among the richest deals for a big league arena. 

The branding aspect for Climate Pledge Arena brings a twist to the traditional naming rights model as officials strive to develop the first zero carbon arena certified by the Living Future Institute, a nonprofit dedicated to promoting sustainable building practices.

Amazon, a trillion-dollar Seattle company and the world’s No. 1 online retailer, won’t have its name on the arena when it opens for the 2021-22 NHL season. Instead, it’s spreading a brand message of sustainability for the world’s most progressive and responsible arena, Leiweke said. 

The Amazon brand is known worldwide and it wasn’t a priority for the company to put it on the building, he said. It was more important to spotlight the issue of climate change in a city at the forefront of addressing it. As part of the effort, Amazon and OVG had to get other arena sponsors on board with the zero carbon mission, and nonprofit entities had to certify the process, Leiweke said. 

For Leiweke, it’s the most complicated deal to date over his 40-year career, considering all the elements converging to form the greenest platform in sports and entertainment. The timing was right, though. The pandemic made it difficult to focus during the final stages of negotiation, Leiweke said, but at the same time, the COVID-19 age is another indication of what’s needed to fix the planet and made it imperative to get the deal done. 

“This was an idea that took root in conversations over the last six months, and what we all agreed is it’s critical for our industry to acknowledge our planet is sick and it is our obligation to heal it,” he said. “There is no other marketplace in the world to set this precedent, create this platform and form a new vision for where we need to go as facility operators, musicians and athletes than Seattle.”

Multiple OVG executives were involved in the negotiations with Amazon, including Dan Griffis, president of global partnerships. He was joined by Ryan Brach, senior vice president of global partnerships; Jeff Webster, vice president of corporate partnerships at both OVG and NHL Seattle; and Christina Song, the firm’s general counsel.

On the other side of the table, Amazon worked on the deal in-house with no outside agency involved. From start to finish, there were about 40 company executives involved over the course of the 12 months of discussions, Leiweke said.

Amazon officials were not available for comment other than a prepared statement from Jeff Bezos, the company’s founder and CEO. The name Climate Pledge Arena serves as a “regular reminder of the importance of fighting climate change,” Bezos said. 

Elsewhere in sports, Amazon Web Services, the company’s data analytics group, has done tech deals with Major League Baseball, Formula One and the Los Angeles Clippers’ CourtVision digital experience, but for Amazon as a whole, nothing to the magnitude of Seattle.

At Climate Pledge Arena, Amazon receives category exclusivity in online retail, data and analytics, consumer electronics and grocery, Griffis said.

“They’re wicked smart people and they built these negotiation models and are very savvy at it,” he said. “Where most people have probably failed in the past with Amazon as it relates to these types of deals is that there wasn’t a bigger idea attached to it. The idea to push an agenda that has the ability to reach a far greater number of people outside of sports and entertainment, that’s what made it work. If it was just Amazon branding, it wouldn’t make a lot of sense to them and they would pass.”

For Amazon, their assets expand to every part of the arena as it relates to pushing the envelope on green buildings, whether it’s the rainwater used to form the ice surface for NHL games or removing all fossil fuels from the building, which is unprecedented for a sports facility. 

“Instead of negotiating the assets, we’ve been brainstorming: What if we did this? What if we did that?” said Tod Leiweke, president and CEO of NHL Seattle and Tim’s brother. “Every day, we get to promote this idea of a sustainable world. It’s a beautiful vision, that we can change the course of what’s happened to our planet and dream of having a zero carbon footprint. It’s going to require investment and policy, but it’s absolutely possible.”

To make it happen, OVG hired Seattle architect Jason McLennan in late 2019 as chief sustainability consultant. McLennan, CEO of McLennan Design, has specialized in sustainable design for 20 years. Several years ago, McLennan worked with Tod Leiweke to develop a health and wellness standard for the mixed-use district next to Amalie Arena, home of the Tampa Bay Lightning. Tod Leiweke spent five years as the Lightning’s CEO.

By virtue of the building type, arenas waste a great amount of energy, which presents a stiff challenge in Seattle for going carbon neutral, given the city’s leading role for promoting sustainability. Some experts think it’s impossible to achieve a carbon-free footprint, but advances in technology over the past decade have made it doable now at a lower cost, McLennan said.

The biggest challenge was to “decarbonize” the building by removing all infrastructure connected to natural gas, which venues typically use for heating, dehumidification and cooking. Replacing it with what is now a fully electrical system was a “big lift” for OVG, and something that has not been done before in the big leagues, McLennan said. 

“It’s ambitious and it changes the way you construct the building due to the fact that gas won’t be a part of it,” Tod Leiweke said.

Installing solar panels on the roof of the arena’s entry pavilion and a parking garage, plus investing in renewable energy to provide 100% of electricity use through on-site solar and off-site renewable energy, was another step in the process. The cost of utility-scale solar energy has dropped dramatically over the last few years, which helps, McLellan said.

“Going even further than that — this is something most projects when they claim to be net zero, they are just talking about the building —  we are calculating the carbon footprints of all the associated emissions from transportation to and from the arena for all events, and offsetting that with carbon offsets as well,” McLennan said.

In addition, 95% of all arena waste will be diverted from landfills and 75% of the venue’s food program will be sourced locally. 

Single-use plastic will be eliminated by 2024. The prospect of self-serve systems phasing out post-COVID-19 has some arena operators such as Sprint Center’s Brenda Tinnen saying plastic straws and lids will come back, but McLennan said compostable options are available. 

Delaware North Sportservice is Climate Pledge Arena’s concessionaire. 

The arena roof, protected as a historic landmark, is the only piece of the original KeyArena structure that remains intact as part of the reconstruction. Leaving it intact helps reduce the building’s carbon footprint by eliminating the need to build a new roof.

The electric Zamboni is a perfect concept, considering the short runs it makes to clean the ice surface before going back under the stands to be recharged, McLennan said.

“When people see what you can do at this scale, it opens up the possibilities and puts pressure on the entire industry that we have to do things differently and be part of the solution,” McLennan said. “It starts removing many of the excuses people had for looking at things like renewable energy and water conservation all of these other things, and say, ‘Look, it’s time to do this.’” 

On the music side, OVG will ask touring acts to purchase carbon credits on the nights they perform at Climate Pledge Arena to offset the emissions tied to the buses and planes they use for transportation. That aspect is separate from the naming rights agreement, Tim Leiweke said.

All told, the deal falls in line with the legacy of an arena originally built for the 1962 World’s Fair, Tod Leiweke said.

“The building had a soul when it opened, so we had a great head start on this issue and we are proud to save this building instead of throwing it out,” he said. “For our fans, we could have put a corporate name up, but now they’ll come to our arena and see that there’s this wonderful purpose for every game and event. It’s a powerful step.”