Stadium just tip of PSINet deal

Ravens, Internet firm say multifaceted pact revolutionary in sports

Online services is focus

Modell: Agreement `far transcends' name

January 27, 1999|By Jon Morgan | Jon Morgan,SUN STAFF

Ravens jerseys for sale online. Webcasts of the coach's news conferences. A virtual fan club, complete with a first shot at tickets. And, of course, a logo for the side of the stadium.

The Ravens announced yesterday a $105.5 million, 20-year sponsorship agreement with PSINet, a Herndon, Va.-based computer services company, that both say will revolutionize sports marketing and the way fans interact with their teams.

"This whole partnership far transcends putting a name on a building," said Ravens owner Art Modell.

Comparing it to the path-breaking television deals he helped negotiate on behalf of the NFL 40 years ago, Modell predicted the tech-heavy agreement would draw new and different fans to professional football.

PSINet chairman William L. Schrader, appearing with Modell at a news conference at the downtown stadium, said the agreement "will become the envy of my industry and the envy of sports franchises worldwide."

The deal calls for the Ravens stadium -- generically tagged "NFL Stadium at Camden Yards" for its debut season last year -- to become PSINet Stadium. The name will be inscribed over each of the giant scoreboards inside and a logo will be created for the outside.

Last year, Modell said, "I don't want an ugly name. I want a highly recognizable name that means something to people here."

Yesterday, he said he felt he had accomplished that goal, despite the obscurity of PSINet, a 2,000-employee, global firm known better to businesses than consumers because it mostly markets to commercial customers.

"The product on the field will determine the acceptance. I think the football fan is more interested in what we do on the field than what sign is on the stadium," Modell said.

Schrader acknowledged his company's lack of name recognition, but hoped the Ravens association will change that. The firm recently opened a sales office in Baltimore.

"Once they understand that we are the best in our world, the best in our industry, I hope they will give us a chance," Schrader said.

PSINet's core business is providing Internet service to businesses, including Web page design and secure software for the fast-growing world of electronic commerce. That specialty will be brought to bear in several ways for the Ravens.

A new Web page (www.baltimoreravens.com) with online shopping for team-related merchandise and sections dedicated to the cheerleaders, player bios and other features.

Interactive kiosks at the stadium, offering high-speed, free Internet hookups for all fans.

A subscription-based, Ravens-branded service to be unveiled in April that PSINet hopes will become the primary Internet portal for many people. The members-only service will provide e-mail and access to the World Wide Web, just like America Online, Erol's and other companies. Subscribers, whom the team envisions as a "virtual fan club," will also get first crack at tickets for games.

"Webcasts," or live broadcasts of team events such as the coach's weekly news conference and "chats" with players, will be available to subscribers on their computers. The NFL's contracts with television networks prohibit games from being broadcast on the service.

The subscription fees have not been determined, but Schrader said they would probably be comparable to other Internet providers, which charge about $20 a month. Plans call for a variety of service levels, with varying fees.

PSINet will keep most of the subscription revenue and the team and company will split the proceeds of related advertising and merchandise sales on terms still to be worked out, according to one source familiar with the agreement.

Schrader said he hoped the computer aspects of the deal would translate into similar pacts with other teams and other sports. "We would like to export as much of this as we can," he said.

NFL restrictions prohibit PSINet from calling itself the "official Internet provider" of the Ravens or using team trademarks in its marketing. Sprint Corp. has a league-wide sponsorship to be the NFL's official telecommunications provider. That agreement is expiring in a few months, and the league may turn the sponsorship category back to the teams, which would allow the Ravens to seek an expansion of the agreement with PSINet.

David Cope, Ravens vice president of sales and marketing, said the PSINet deal will help the Ravens establish a new connection with online fans.

"We've only been here three years, and we don't have the brand equity of a Denver Broncos or a Green Bay Packers. We feel this partnership will help get us there," Cope said.

Dean Bonham, president of the Denver-based sports marketing firm The Bonham Group, said the Ravens-PSINet sponsorship will set a benchmark. In terms of dollars, it is one of the richest naming rights deals in history, second only to Staples' agreement to pay $116.5 million over 20 years to name Los Angeles' new arena.

That record is expected to be broken as soon as next week, when a deal to name Atlanta's new arena will be announced.

But so many of the components in the Baltimore deal are unrelated to the name of the stadium that it is hard to compare, said Bonham, who was not involved in the Ravens negotiations. Because PSINet will directly earn revenue from the members-only Web pages, the company will recoup at least part of its investment every year.

"This is very trendsetting and very cutting edge," he said.

Jeff Knapple, who heads Envision, a Los Angeles-based consulting company that also negotiates naming-rights agreements, said the Baltimore-PSINet partnership reflects the rapid change in sports marketing.

"It is a much bigger deal than naming rights. It is more complex and they've done a couple of things that no other team has ever done," Knapple said.

Pub Date: 1/27/99

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