“If you think about what we sell as a telco, you can’t see it, you can’t touch it,” says Virgin Media O2 executive Gareth Griffiths, left, standing with AEG’s Paul Samuels. “The O2 gives us a very tangible way to bring that brand to life.”
AEG
Since opening in 2007, the O2 has become a destination concert venue for some of the world’s top artists and even been name-dropped in songs like Drake’s hit “God’s Plan”—and those lyrics won’t be out of date anytime soon.
O2, a British telecom provider that merged with Virgin Media in 2021 to form Virgin Media O2, announced Wednesday that it is renewing its naming rights deal for the arena and the surrounding entertainment district until 2038. O2 did not disclose the terms of the agreement, but according to a person familiar with the deal, the company will pay the arena’s operator, AEG Worldwide, more than £200 million—at least $265 million at the current exchange rate—over the ten-year extension.
At an average annual value of more than $26 million, it will stand among the most valuable naming rights deals in the world, with only one stadium or arena in the four major North American professional sports leagues exceeding that fee with what it collected in the most recent season of Forbes data. That venue, incidentally, is also owned by AEG: Crypto.com Arena, the home of the NHL’s Los Angeles Kings and the NBA’s Los Angeles Lakers, which is believed to have the most valuable agreement of its kind at an annual average of $35 million ($700 million over 20 years, through 2041).
The O2 is unique among those peers in that it is not the full-time home of any sports team, but the 23,000-seat arena stayed busy with 239 shows last year that sold 2.9 million tickets. This summer, Ariana Grande performed ten shows at the O2 to wrap up her Eternal Sunshine Tour, her only performances outside the U.S. or Canada. The arena also often hosts boxing and UFC fights and tennis matches, along with the occasional NBA game.
Beyond the main attraction, the O2 complex includes a more intimate 2,750-seat live music venue, an outlet mall, bars and restaurants, a movie theater, a bowling alley and an iFly indoor skydiving simulator. The entertainment district collectively has more than 11 million visitors per year.
“Every time I go around the world talking about naming rights, people say to me, ‘Please let me know when the O2 deal comes up—we’d like to chat about it,’” says Paul Samuels, president of global partnerships at AEG International. “There are going to be a lot of disappointed people when they realize that it’s not available again for another ten years.”
The O2 wasn’t always such a popular attraction. It is built under the original structure of the Millennium Dome, which opened on New Year’s Eve in 1999 to celebrate the new millennium, hosting a massive exhibition through the year 2000. The project was largely seen as an eyesore and sat vacant for years.
In December 2001, the British government essentially gave the site to property developer Meridian Delta, backed by billionaire Philip Anschutz, which then subleased it to AEG—more formally known as Anschutz Entertainment Group, the owner of venues around the world as well as the Kings and ticketing platform AXS. O2, which launched in 2002 as a spinoff from British Telecom, acquired the initial naming rights in 2005, before the arena opened, and dropped its position as the primary shirt sponsor of the English Premier League’s Arsenal FC the following year to make the arena its biggest brand-building effort.
“It was probably the hardest thing I’ve ever had to do in my career, to convince a public company board to stop sponsoring Arsenal and sponsor this white elephant instead, and have the belief that it could be what it is today,” says Samuels, who worked for O2 before he moved to AEG in 2007.
O2 paid a reported £125 million ($157 million at the time) for its first ten-year renewal in 2017, which will keep the partnership with AEG running through the 20th anniversary of the venue’s opening next year. The new deal will stretch the relationship to three decades.
O2’s leadership sees the expense as well worth it. Gareth Griffiths, director of partnerships and sponsorship at Virgin Media O2, says a recent survey indicated 96% of people in the U.K. had heard of the O2 arena. Virgin Media O2 provides 46 million mobile connections to customers in the U.K., and its customers get priority treatment with faster entry into the arena, access to reserved lounge areas and deals at other vendors within the O2 complex.
The new ten-year renewal will also come with a guarantee that 30% of the venue’s tickets will be available to O2 and Virgin Media customers 48 hours in advance of the general public, up from 20% of seats being reserved for priority tickets under the existing deal.
“If you think about what we sell as a telco, you can’t see it, you can’t touch it,” Griffiths says. “The O2 gives us a very tangible way to bring that brand to life.”
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