Naming rights deals self destruct

If we sometimes wonder about the greed, arrogance, and stupidity of the people who own and operate major sports teams, we can take comfort in this much: they're no more greedy or arrogant or stupid than the people who own other major corporations in the business sector.

If you need proof of that postulation, check out the corporate sponsors of almost any stadium in America, where the get-rich-quick crowd rushed to throw their money away on naming rights deals that would serve as monuments to themselves. What remains, in many cases, are monuments to short-sighted avarice.

The defending NFL champions Baltimore Colts play in a stadium named after a bankrupt Internet firm, PSINet. Their immediate predecessors, the St Louis Rams, play in an indoor facility still called the TWA Dome, even though the troubled airline for which it was named was recently absorbed by American Airlines, which, having lost three aircraft in the past three months, has troubles of its own.

The Miami Dolphins' home field is still called Pro Player Stadium, although Pro Player no longer exists as a company, and they could shortly have company. The struggling computer equipment manufacturer 3Com has already served notice on the San Francisco 49ers that it does not plan to renew its naming-rights arrangement for the former Candlestick Park.

The NFL New England Patriots and Major Soccer League's New England Revolution play their final seasons at Foxboro Stadium this year. Right across the parking lot, the blue-steel girders of the edifice which will be called CMGI Field already reach into the sky. The $325 million price tag on the new facility was underwritten in part by CMGI, a then-thriving high-tech concern, which a few years ago committed $120 million over 15 years to secure the naming rights for the nascent facility.

At the time that deal was sealed, CMGI stock was trading at $24.81 on the NASDAQ. It subsequently went into free-fall, bottoming out at 60 cents.

Yesterday it was trading at $2.04 a share.

At a stockholders' meeting shortly after CMGI stock had gone into free-fall, the company's CEO David Wetherell was forced to defend his position. He pointed out that CMGI was receiving nearly two years' worth of free advertising before it even had to make its first payment, and had, moreover, retained the right to peddle the stadium naming rights to another bidder (with the Patriots' approval) if the situation warranted.

"We have the opportunity to change the name, or we could sell the naming rights," explained Wetherell, espousing a philosophy designed to be of small comfort to football fans. "It's an asset that the company will treat like any other."

Nowhere was the syndrome of corporate avarice more aptly illustrated than by events in Houston over the past week, where the repercussions of the self-immolation of the Enron Corporation could shake the very fabric of the baseball team (the Houston Astros) which is the principal tenant of Enron Field.

The cozy stadium, erected to replace the 35-year-old Astrodome two years ago, not only enjoys a reputation as being fan-friendly, but among players as being batter-friendly. (National League hitters are wont to refer to it as "Ten-run Field"). The staggering collapse of Enron, which tumbled into liquidation last weekend, could have an alarming impact on the sporting industry, particularly as concerns the Astros. The company had signed up to pay $100 million over 30 years for the naming rights, money which was almost certainly anticipated in compiling the team's budget for 2002.

Every time the Astros lose out in a bidding war for a free agent this winter, rest assured that Enron's name will be invoked. If the team, which has reached the playoffs four times in five years, doesn't get there again next season, Enron will be blamed.

Moreover, the Astros' search for a replacement faces some stiff local competition. The basketball Rockets are already prowling the corporate landscape in search of somebody to throw money at their new arena.

"In retrospect," Houston columnist Dale Robertson said this week, "the Astros sold their soul to the devil. They just failed to realise it at the time."

Enron's implosion resulted in the loss of 4,000 jobs in Houston alone. (And 1,100 more in the UK). It is reasonable to assume that until they find gainful employment, very few of those people are going to be taking their families to baseball games, and when they do, they will be loath to get near a place so closely associated with corporate arrogance and human misfortune.