Familiar names popping up on stadiums

Marketing drives new group of sponsors

February 17, 2003|By Jon Morgan | Jon Morgan,SUN STAFF

Goodbye, dot-coms. Hello, shaving cream.

As the Ravens search for a corporate name for Baltimore's NFL stadium, people involved in the search and similar ones elsewhere say the days are gone when high-tech firms would pay millions to bolt their monikers to ballparks.

In their place are stalwarts such as razor maker Gillette, which last year bought the sponsorship rights to name the Patriots' stadium.

That's good news for fans who never learned how to pronounce PSINet Stadium downtown or adjusted to 3Com Park in San Francisco.

Seven corporations have bought the names to NFL stadiums in the past two years, and not one has a dot or a hyphen in its name. Three manage money, one sells electricity and the rest make products found in our kitchens, bathrooms and garages: Heinz ketchup, Gillette shaving supplies and Ford cars and trucks.

Besides PSINet and 3Com, three high-tech companies have dropped or declined to renew naming sponsorships of NFL stadiums: CMGI Inc. in Foxboro, Mass., Ericsson in Charlotte, N.C., and Adelphia Communications Corp. in Nashville, Tenn.

One reason, of course, is the bursting of the high-tech bubble. Another is that the forces that motivate sponsorships have evolved. A naming rights deal was once viewed as a costly but quick way for a fledgling company to get noticed. Now deals are seen as elements of larger marketing programs designed to - gasp - sell things.

"Our research shows that our consumers are great sports enthusiasts, so we know that this sponsorship gives our brands an excellent opportunity to connect with our consumers," James M. Kilts, chairman of the Gillette Co., said last August when his company's name replaced CMGI on the then-champion Patriots stadium.

The $7.6 million-a-year price tag is but a sliver of the $576 million Gillette spent on advertising last year, a year in which its sales topped $8 billion. Contrast that with PSINet, an internet services firm that agreed in 1999 to pay the Ravens an average of $4.65 million for 20 years despite revenues of only $122 million - and a loss of $46 million - the year before.

The deal was undone a year ago after PSINet went bankrupt and the Ravens bought back the rights from the company's creditors. Since last fall, the team has been actively searching for a replacement mega-sponsor and hired Team Services LLC of Bethesda to help find one. The Ravens entertained prospects at the Super Bowl in San Diego last month.

Dennis Mannion, Ravens vice president of business development and marketing, declined to disclose their names.

"We have multiple interested parties and multiple negotiations," he said, adding he would like to have the deal struck in the next few months.

He declined to identify any of the prospects, but said many of them have strong local ties. That is consistent with other recent deals around the country, where prominent corporations bought the names of facilities in their hometowns.

"As an optimist, I would sure like to be ready to get going by next season, but it might take more time," he said.

One reason the stadium has been without a name for more than a year is that potential sponsors remain skittish after the messy demise of a number of companies that had named sports facilities. Moreover, the NFL is in the midst of a stadium-building boom similar to the one baseball enjoyed in the 1990s. The result is an extraordinary number of buildings in search of sponsors. Names are being, or soon will be, sought, for nine NFL stadiums - nearly one in three.

That makes it tough to complete a deal, said David Cope, director of business development for Gilco Sports & Entertainment Marketing of Bethesda.

"It's a great market for the buyer. There is so much more supply than demand; even college and high school stadiums are looking for naming rights. Everybody is getting into it, because it works," said Cope, who helped engineer one of the most lucrative naming deals in sports, the $7.6 million-per-year Redskins stadium sponsorship by FedEx, signed in 1999.

This is not a good time to be seeking a sponsor, said James Gilliland, director, Global Project Finance for Fitch Ratings, who recently wrote a report on the state of naming rights. "You have to wonder how many companies are willing to put their names on the dotted line in such a rough economy," he said.

But the consultant working for the Ravens said the market seems to be reawakening.

"We don't expect this to be easy, but the brand that the Ravens have established in the market is strong," said E.J. Narcise of Team Services.

Narcise has participated in a number of naming-rights negotiations, including those that resulted in Reliant Stadium in Houston, Comcast Arena in College Park and Ericsson Stadium in Charlotte, N.C.

While some industries, such as airlines, have lost their interest, others have stepped up. The defense sector, for example, is promising, as are the financial services and consumer products sectors, he said.

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