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Oracle Grabs San Francisco Ballpark's Naming Rights for 20 Years

Zacks Equity Research

Oracle ORCL has reportedly acquired the naming rights for San Francisco, CA-based waterfront baseball stadium. Per Bloomberg, the deal is worth more than $200 million. Other reports anticipate that the company is spending around $200-$350 million. The ballpark is home to the San Francisco Giants.

According to the terms of the agreement, the gaming arena will be renamed as Oracle Park for the next two decades. An official announcement is anticipated on Jan 10, 2019.

Notably, AT&T T opted out early of this naming pact, which was set to expire in 2019, paving the way for the baseball stadium to be rechristened Oracle Park from the former name of AT&T Park.

The Giants’ baseball stadium boasts a capacity of 41,915 seats and is doing well of late. With the naming agreement, Oracle is expected to enhance its brand image in the San Francisco Bay Area.

The contract comes at a time when Oracle’s naming deal with Oakland arena is ending, now that the Golden State Warriors (aka the "Dubs") are shifting their home base to San Francisco.

The Dubs have inked a deal with J.P. Morgan Chase & Co. JPM spanning more than 20 years, which is reportedly worth $15-$20 million a year. Notably, the Warriors, the defending NBA Championship franchise, will reportedly start playing in the 18,080-seater “Chase Center” in October.

Key Takeaways

Backed by this latest deal with the Giants, Oracle also attempts to drive innovation in the sports domain, riding on automation capabilities to improve fan experience. Further, initiatives to boost ticket sales with ordering concessions and other methods might favor the company’s prospects in the new development.

Oracle is benefiting from a strong adoption of its cloud-based solutions comprising Fusion ERP and Fusion HCM among others.

In fact, Fanatics, a leading e-commerce vendor furnishing sports merchandise, selected Oracle Customer Experience (“CX”) Cloud suite to provide its customers, primarily sports enthusiasts, with a customized “Fan Experience.”

Notably, sturdy demand for the company’s next-generation autonomous database, supported by machine learning, bodes well for the company’s top-line improvement.

Oracle Corporation Revenue (TTM)

Oracle Corporation Revenue (TTM) | Oracle Corporation Quote

Nonetheless, escalating expenses are also a headwind. Importantly, in second-quarter fiscal 2019, non-GAAP operating expenses, as percentage of revenues, increased 70 basis points (bps) to 57.3%.

Zacks Rank & Key Pick

Oracle carries a Zacks Rank #3 (Hold). SS&C Technologies Holdings, Inc. SSNC, which sports a Zacks Rank #1 (Strong Buy), is a stock worth considering in the same industry. You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for SS&C is currently pegged at 13.5%.

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