The New Era era at the home of the Buffalo Bills in Orchard Park is ending.
The Buffalo-based headwear and apparel company has asked the team to release it from its naming rights agreement, which means the stadium will no longer be called New Era Field.
The two organizations issued a joint statement Wednesday confirming that New Era had sought to get out of the naming rights and sponsorship deals with the Bills: "The Bills and New Era are currently negotiating the details of this separation and the Bills are beginning the process of pursuing a new naming rights partner for the stadium."
The exact date of the change, as well as the next name for the stadium, is still to be determined.
While the economic downturn stemming from the Covid-19 pandemic has significantly impacted New Era's business, sources with inside knowledge of the negotiations said PSE had been working with the company for "well over a year" to restructure the deal. Ultimately, both sides agreed to negotiate an early end to the arrangement, which was to run through 2022. Sources told The News that the naming rights were to cost New Era an average of $4 million annually.
The change comes as NFL teams continue to develop alternatives to recoup potential lost revenue if no fans, or a limited number of fans, are allowed in stadiums this season. Across the league, stadium revenue accounts for $5.5 billion, including tickets, concessions, sponsors, parking and team stores, according to Forbes. The Bills stand to lose $104 million of $386 million in total revenue if no fans are allowed, Forbes reported.
The News reported in May that the Bills were examining seating models for 15%, 33% and 50% capacity. New Era Field has a listed seating capacity of 73,079. The Bills have not announced plans for reduced capacity.
The Bills are among two-thirds of the teams in the league that have offered to let season ticket holders opt out of their 2020 tickets with no penalty.
Among the potential offsets for lost stadium revenue is a new initiative approved by NFL owners last month that allows the first eight rows to be covered with advertising banners that would be visible on television broadcasts. That could be an option for the Bills, especially with a schedule that has a number of national television appearances.
For New Era, the end of the naming rights deal accentuates the difficulties the company has faced over the last two years, even before the coronavirus pandemic forced the shutdown of sports vital to its business. And the circumstances around the early end of the arrangement draw a stark contrast to where New Era stood in August 2016, when CEO Chris Koch joined Bills officials for a celebratory news conference announcing the deal on the 20-yard line of the stadium.
The Bills played at the stadium formerly known as New Era Field for four seasons, from 2016 through 2019
That moment was five years in the making, dating back to when the Bills and Erie County were working out a new stadium lease and the team’s founder, Ralph Wilson Jr., was still alive and owned the team. Russ Brandon, then the president of the Bills, asked Koch if he someday would be willing to put New Era’s name on the stadium, which bore Wilson’s name and was often called "The Ralph." Koch told Brandon he would be open to talking about it.
The question – exploratory as it was at the time – was part of a plan aimed at keeping the team in Buffalo after Wilson’s death. Making the lucrative naming rights available would be attractive to a new owner. Wilson, who was intent on the Bills staying in Buffalo after his death, knew that – and he was quietly supportive of New Era potentially buying those naming rights one day.
Wilson died in 2014. Later that year, Terry and Kim Pegula purchased the team. In 2016, Bills officials formally offered Koch the naming rights.
The rebranding as New Era Field marked the second time the stadium's name changed. It was christened Rich Stadium when it opened in 1973, and then became known as Ralph Wilson Stadium in 1997.
The naming rights agreement was one of several multimillion-dollar deals New Era made under Chris Koch's leadership since 2012, when the company became the NFL's exclusive provider of headwear worn on the sidelines. In 2016, New Era became the exclusive on-court cap company of the NBA, and that same year expanded its deal with Major League Baseball to put its flag logo on the side of players’ caps. In 2017, New Era opened a store at the L.A. Live entertainment complex adjacent to the Staples Center in downtown Los Angeles.
Those moves exploded New Era’s visibility – and costs. The total dollar amount of those deals isn’t public, but sports industry sources confirm for The News that the annual payouts by New Era would easily reach into eight figures. New Era’s revenues are substantial – reported at $750 million in late 2018 – but the company has also made significant cuts to its business in more recent years.
In 2019, New Era shuttered its plant in Derby, where more than 200 workers produced up to 4.5 million caps per year.
The coronavirus pandemic, which shut down college and professional sports and most retail, prompted New Era in late March to furlough approximately 70% of its 600 U.S. employees at offices in Buffalo, New York and Irvine, Calif. Those furloughs, originally planned for 60 days, were extended into summer. New Era applied for and received a federal Paycheck Protection Program loan of between $5 million and $10 million, and then earlier this month laid off 187 employees, 117 of whom worked at its Buffalo headquarters.
That prompted a harsh backlash from elected officials, including Erie County Executive Mark Poloncarz, who said, “I am exceptionally disappointed with New Era.”
“I would rather see the stadium called Veterans Stadium than New Era,” he said. “I won’t even use that name. I still call it Ralph Wilson Stadium.”
Poloncarz expanded on that sentiment in a statement Wednesday, saying he would like to see the Bills not pursue another corporate partner but instead use Veterans Stadium to “honor the men and women who have served our nation.”
The Bills control the naming rights of the stadium through 2023, which is the expiration of their lease.
Poloncarz noted if the organization agreed to a deal with a corporate entity, it should “partner with a company that has a sterling reputation, especially as it relates to their workforce, and one our community would be proud to associate with as the home for our team – the Buffalo Bills.“
Poloncarz said the team should honor veterans such as former owner Ralph Wilson and former Bills player Bob Kalsu, who was killed in Vietnam.
Koch declined an interview request following the layoffs, but in late December spoke to The News in a wide-ranging interview that included his take on the major deals New Era has made in the last several years.
He said “the big three on the license side” – meaning MLB, NBA and NFL – “continues to grow our business and drives a big percentage of our business. That’s all been very positive.”
He juxtaposed those against the L.A. Live and New Era Field deals.
“The whole L.A. Live thing, did we really need to put a store there? No. But it’s nice to have,” he said. “The naming rights? We don’t do naming rights deals. We did that one because it’s Buffalo, because of Terry and Kim (Pegula). We felt like it gave us a connection to ownership, because there’s a revenue-share on naming rights deals. And quite frankly, if you look at the sports license business, it’s the only stadium that’s named after a company that’s a licensee. It’s banks, it’s insurance, so it’s very unique. ”