Stadium with a shaky identity

Prospects uncertain if Ravens must seek new name for PSINet

April 07, 2001|By Andrew Ratner | Andrew Ratner,SUN STAFF

If the plunge of PSINet Inc. leads the Baltimore Ravens to regain naming rights to the downtown football stadium, the team would shop them in an atmosphere greatly different from the last time.

Although the team is better known since winning the Super Bowl in January, corporate advertising budgets, formerly deep-pocketed dot-coms and naming-rights deals are in a shambles nationally. Teams in St. Louis, Miami and possibly Boston are hunting for new stadium names because their sponsors are bankrupt or heading that way.

"You've got two countervailing forces," said Stephen Walters, a Loyola College economics professor who studies sports economics. "The team's a lot better and is more visible. Assuming the rights revert to the Ravens, they'll bank a bigger check because they're on everybody's radar screen now. But the corporate culture being what it is, a deal may be slow to develop."

The Ravens and PSINet signed a 20-year agreement in 1999 that included naming the stadium after the company. The sponsorship deal totaled $105.5 million, almost half of what it cost to build the stadium. But the future of the deal has been in question since the Internet-services company notified the U.S. Securities and Exchange Commission this week that it may soon run out of cash and its stock may be worthless. The Nasdaq exchange halted trading on the stock at 19 cents Tuesday.

The Ravens believe they would retain the right to resell the naming rights if their pact with PSINet is broken, but the future of the stadium name remains unclear if the company continues to make payments to the team, as sources close to the deal say it has. If the company declares bankruptcy, bondholders might attempt to resell the stadium name as an asset. If the stadium name goes back on the market soon, it would do so in a much more turbulent climate.

"I think the Ravens would probably feel good to do as well as they did the last time," said Dennis Howard of the University of Oregon's Warsaw Sports Marketing Center. "It's a period of retrenchment in the sports industry."

Certainly, there are companies, especially in the energy and telecommunications industries, still interested in and able to spend millions of dollars to gain the national visibility that would come with putting their name on a sports facility. Even college and minor-league teams are selling naming rights to facilities.

Lucrative deals

Two-thirds of major professional sports stadiums and arenas are named for corporations, nearly twice as many as in 1997. The value of those naming-rights deals is more than $3 billion, according to the Bonham Group, a sports-marketing firm in Denver.

American Airlines paid $195 million last year for 30-year naming rights to the arena in Dallas where the Mavericks basketball team and Stars hockey team play. New baseball stadiums open next week in Pittsburgh and Milwaukee with the names of corporate sponsors who paid $1.5 million to $2 million a year for the right. Reliant Energy Corp. agreed to pay a record $300 million over 30 years last fall to sponsor the sports and convention complex in Houston where a new National Football League franchise will play next year.

"When a prime-time TV ad costs $500,000 for 30 seconds, $5 million or $10 million a year to put a name on a stadium can look like a good buy," said John H. Anvil, a marketing professor at the University of Delaware who studies Super Bowl advertising.

Looming changes

But sign makers may be kept busy peeling corporate names off stadiums almost as fast as they're bolting them on.

St. Louis is contemplating two new arena names as a result of business upheaval. The TWA Dome, where the Rams play football, will get a new name because TWA Inc. filed for bankruptcy last winter. Its prospective parent, American Airlines, is not interested in continuing the arrangement because it has deals totaling $237 million to have arenas named for it in Dallas and Miami.

The Blues hockey team in St. Louis may also have to find a new arena sponsor because the Internet company it signed up last summer for $72 million over 20 years is failing. The 750,000 shares of stock the Blues owners accepted as partial payment from Savvis Communications Corp. were worth $7.3 million in August but had a value of about $322,000 yesterday.

In Massachusetts, CMGI Inc., an Internet and venture capital firm that agreed to pay $114 million to the New England Patriots to have its name on a renovated football stadium in Foxborough, might not be around by the time construction is completed next year. The company's stock has dropped nearly 100 percent in the past 13 months, to $1.94 yesterday. That stadium was one of the first named for a corporate sponsor, when the Patriots sold rights to Schaefer brewing company in 1971. It has been renamed twice.

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