Ravens poised for replay of stadium name game

Word could come today on early end to 20-year PSINet deal

Market for rights in slump

January 24, 2002|By Andrew Ratner | Andrew Ratner,SUN STAFF

The Baltimore Ravens and PSINet Inc. might announce as early as today the premature end of their 20-year deal, which would remove the neon-purple name of the bankrupt Internet services company from the city's football stadium.

But if the Ravens regain the right to resell the name, they'll likely do so in a market much flatter than when they sold it as part of an advertising package in 1999 for $105.5 million.

A Ravens' buyout of the right from PSINet would require approval in U.S. Bankruptcy Court, because PSINet has operated since last summer under Chapter 11 protection from creditors. Court approval could occur in a month without objections, said an attorney involved in the case.

But the dot-com, energy, telecommunications and airline industries whose members bid up naming-right values a few years ago have been battered. Investors are less apt to be as forgiving about such deals. Also, the prolific collapses of some stadium sponsors -- including Enron Corp., the fallen energy behemoth that has its name on the 2-year-old baseball field in Houston -- has left a bad taste with the public.

"My guess is the market may be 50 percent" of what the Ravens negotiated with PSINet, said Andrew D. Appleby, a former executive with the Detroit Pistons basketball team who heads General Sports and Entertainment, a marketing company in Michigan. "Much like TV broadcast advertising, the dot-coms came in and drove up the price, but the bubble burst. The Ravens will be hard-pressed to repeat" the PSINet deal.

Others in the industry aren't so gloomy. They say the Ravens have a much higher profile since winning the National Football League championship a year ago. One of the most lucrative stadium-name deals ever, in addition, happened in this market: the $205 million that Federal Express agreed to pay over 27 years to sponsor the Washington Redskins' park in Prince George's County.

"I'm predicting a rebound, particularly in the last half of the year as clients make decisions for the 2003 budget year," said Dean Bonham, a Denver-based naming-rights consultant and broker. "I'm very bullish on the Ravens' prospects for a new naming-rights deal. They are one of the two or three top teams in the NFL, arguably one of the premier franchises in all of sport today. ... "

Of 62 professional sports venues in North America named for corporate sponsors, fewer than 10 have dissolved or are in danger of doing so -- not a large percentage, said Bonham, chairman of the Bonham Group Inc. in Denver and former president of the Denver Nuggets basketball team.

`A lot of uncertainty'

But recent news around the country -- including reports that stadiums are unable to land deals or to replace bankrupt corporate sponsors -- suggests the market is in a slump.

3Com Corp. recently told the NFL's 49ers that, after this month, it won't renew its seven-year naming right for the San Francisco park formerly called Candlestick. 3Com sales were off by a third last year, and San Francisco's baseball team left the facility for its own corporate-named edifice, Pacific Bell Park. But 3Com maintains that the stadium identification has outlived its usefulness.

Other NFL teams, in St. Louis and Miami, have yet to find replacements for their stadium sponsors that went bankrupt.

The Miami Dolphins have played in a stadium named for a defunct company for more than a year with no new partner in sight. Pro Player Stadium in South Florida is named for a Fruit of the Loom offshoot that was discontinued after the parent corporation filed for bankruptcy in 1999.

"We've been pretty active in the market, but companies are saying there's a lot of uncertainty in the economy and the world," said Jim Ross, vice president of sales and marketing for the Miami Dolphins. "We're anxious, but not so at the risk of not doing a deal with the right partner."

The Rams play in a domed stadium originally named for Trans World Airlines, which went bankrupt and was acquired by American Airlines in April.

Drawing negative attention

Ross said the high visibility that makes a stadium name a prime promotional vehicle has become a double-edged sword: Sponsorships in collapse have drawn greater attention and ridicule than other forms of advertising that dried up in the recession.

Corporate stadium names continue to evoke strong mixed emotions, though the trend isn't new and corporate monikers adorn arenas to the tune of more than $3 billion total.

Chicago has had two such flaps in recent months. The Bears of the NFL last fall suspended plans to resell the name of Soldier Field, fearing charges of insensitivity as America mounted its war on terrorism. Meanwhile, the marketing of the name of Comiskey Park, named for the founder of the team that plays there, the White Sox, elicited charges of selling out history and tradition.

In Baltimore, the PSINet name possibly stirred more contention than the Ravens' starting quarterback -- most years anyway.

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