Lucas: Colts stadium naming rights deal a bargain

Seven years into a 20-year agreement, Lucas Oil Products Inc. founder Forrest Lucas thinks his company has already gotten its money’s worth out of its $121.5 million naming rights deal for the Indianapolis Colts’ home—or at least nearly so.

“I’d say I’ve got nearly all that back already,” Lucas told IBJ before the Colts kicked off this year’s home season against the New York Jets on Monday. “We’re definitely getting more out of it than what we paid. It’s been a real good deal for us.”

That’s saying something given that Lucas Oil will pay $6.1 million annually over the life of the pact.

Since its opening seven years ago, the 67,000-seat venue has already hosted two NCAA men’s Final Fours, a Super Bowl and a bevy of other big events. It’s the regular home of the nationally televised NFL Scouting Combine, has hosted dozens of Colts games and also been the site of several major conventions, including the massive Fire Department Instructors Conference.

Lucas said there are two key factors that have led to such a positive return on investment: The 2012 Super Bowl and the Colts’ consistent winning (this season not withstanding). From the Super Bowl alone, Lucas estimates his company got a $10 million or so revenue bump.

He added that the company’s display in the stadium’s main entrance and his ability to entertain clients during Colts games in a custom-designed 60-person luxury suite helps drive value to the deal.

Though Lucas Oil doesn’t divulge its revenue, industry analysts pegged it at $150 million three years ago. Lucas said that figure “was in the general ball park.”

Last year the company’s revenue grew by about 20 percent, Lucas said, and the company has been growing at a double-digit clip for several years.

Sales for the California-based company, which has a sizable presence in Indiana, has nearly doubled since it signed the naming rights deal just before the Colts 2008 season kicked off, Lucas said.

While Lucas Oil does a lot of marketing—including in various auto racing series and through its own television station, MAVTV—Lucas gives much credit to the stadium deal.

“This is one of the biggest marketing initiatives this company has ever made and I know it has made a huge difference,” Lucas said.

The length of the naming rights deal “let people know we were here to stay,” Lucas said, and the marketing initiatives surrounding the deal, including the stadium lobby display “let people know what Lucas Oil is and does.”

The suite Lucas Oil has is “the icing on the cake.” Lucas spared no expense in customizing his suite including mesquite wood floors, a horseshoe-shaped bar, and big-screen televisions.

“We bring in a lot of customers for the games,” Lucas said. “We fly them in from all over the country and some from [central Indiana]. For clients, it’s a big deal.”

Lucas noted the party atmosphere inside the suite can get pretty rowdy.

“It’s not a quiet suite. We have a lot of laughs,” he said. “When the Colts have a winning season, it’s a really big deal. The only problem is I’m so busy hosting the party I sometimes don’t get to watch the game much.”

Lucas also began a sponsorship deal with Colts quarterback Andrew Luck last year. Seven weeks ago, Luck and Lucas finished shooting their latest commercial which will start airing on TV this week.

“I told Jim [Irsay] before the [2012] draft, you have to get this boy. I’m sure that’s not why he drafted him,” Lucas said with a laugh. “But I can tell you the city, the Colts and Lucas Oil, we’re all lucky we got Andrew Luck.”