PSINet clicks on $105M deal

Internet provider `sponsors' stadium for 20 years to aid image

Fans: Name doesn't compute

Suites, radio/TV part of record NFL package

January 26, 1999|By Jon Morgan | Jon Morgan,SUN STAFF

First, a word on the pronunciation. It isn't "sigh net" or "p-sigh net." It's "P-S-I Net."

Get used to it. It's a name you're going to be seeing and hearing a lot in coming years. Look for it plastered to the bricks of the Ravens' stadium, glued to the cup holders, beamed through cyberspace and repeated in pre-game shows and radio broadcasts.

Herndon, Va.-based PSINet Inc. will insist on such omnipresence, and has paid dearly for it.

The company, an Internet service provider, has agreed to pay $105.5 million over the next 20 years to become the Ravens' "presenting sponsor," according to a source familiar with the negotiations.

In exchange, PSINet will receive a jolt of publicity and name recognition to help it compete in the cutthroat business of computer services. That starts today with simultaneous news conferences in New York and Baltimore linked by satellite and broadcast live on the Internet (www.psinet.com).

The reaction from fans to the new name was not good, especially those raised at Memorial Stadium, an edifice dedicated to the nation's war dead.

"I hate it. It doesn't apply to anything," said Doris Gregor, a longtime Baltimore football fan. "It doesn't indicate football and it doesn't say anything about the team. I just don't like it."

Larry T. English, a Ravens season-ticket holder, said the commercialization of the name was overkill considering the taxpayer financing of the building and the "permanent seat licenses" charged ticket buyers.

"I think that between the city and state paying for the $220 million stadium and the fans paying the PSLs, it's a little ridiculous to have to sell the name," he said. "In my eyes, it will be Ravens stadium no matter what they call it."

The $105.5 million PSINet deal with the Ravens would be a record for a football stadium, shattering the previous mark set by the Tampa Bay Buccaneers at Raymond James Stadium.

The namesake financial services firm is paying the Bucs $3 million annually for 13 years. The PSINet sum would come close to the record $116 million that office equipment retailer Staples has paid to name Los Angeles' new arena.

PSINet rewards, too

But the Baltimore deal includes substantial elements unrelated to the name of the building -- such as ad time on radio broadcasts and the team-produced TV shows -- so its value as a benchmark is not clear.

One source said the radio component alone is worth about $500,000 a year at retail. That is revenue the team will not be able to attract from other advertisers, so it can't be considered a net gain for the team.

In exchange for its annual average payment of nearly $5.3 million, PSINet will get as close an association with an NFL team as any sponsor ever has. The arrangement stretches from sponsorship of the team's two television shows to access to the stadium's only double-decker skybox -- two suites stacked at the 50-yard line and connected by a spiral, cherry staircase.

To discourage fans from referring to the building as anything other than PSINet Stadium, the suffix "at Camden Yards" was purposely left off the official title.

Web page, kiosks, more

Sources say there will also be a substantial involvement between the team and company in cyberspace. Details are to be released today, but a new Web page for the team and Internet kiosks in the stadium are possible components, as well as some electronic razzle-dazzle to entertain fans on game day.

"If it's a good company and it's high-tech, it could move us into the next century in terms of what we do for the fans. But the name is a little hard to make ring," said Maryland Stadium Authority executive director Bruce Hoffman.

PSINet serves chiefly business customers, providing them with high-speed Internet access, e-mail service, Web site design and secure electronic commerce. PSINet is the nation's largest independent Internet service provider, with dedicated cables nearly ringing the globe and a special concentration running between Washington and New York.

Its competitors include such integrated and well-capitalized telecommunications behemoths as MCI Corp., AT&T and Worldcom.

The stadium deal will catapult PSINet into the big leagues of name recognition, something that can spell the difference between survival or extinction in its fast-changing industry.

Stock rises after '98 fall

"This will surely give them the opportunity to raise their brand image to a national level. Anything they can do to establish a national brand would be good," said Charles "Chip" Morris, manager of T. Rowe Price's Science and Technology mutual fund, which owns PSINet stock.

PSINet lost $45.6 million last year on revenues of $121.9 million, but is growing rapidly and has drawn interest from investors hoping it establishes a strong beachhead and becomes profitable or is purchased by a larger firm. It was founded in 1989 as Performance Systems International Inc.

PSINet's shares rose 2 3/4 to 34 3/4 yesterday.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.