Stadium Naming Deals Gone Bust
When a company spends millions to put their company name on a major stadium, controversy often follows as the value of such an expenditure is difficult to track. Major stadium naming deals have also seen another trend: corporate failures.
Throughout the booms and busts of the American economy, many companies who have chosen to embark on a naming rights contract have seen their companies suffer financially or even collapse within several years of a naming deal. Although external, indirectly related factors are certainly at play, the correlation is quite impressive: In many cases naming deals parallel a corporate "boom" spending mentality that contributes to a company's weakness when a bubble bursts.
So, what are some stadium naming contracts that went bust? Click ahead to find out!
By Paul Toscano
Posted 20 Jan 2009
Current Name: Gillette Stadium
Location: Foxboro, Massachusetts
Major Teams: Patriots (NFL), Revolution (MLS)
Cost of Naming Rights: $7.6 million/year
Construction Cost: $325 million
CMGI originally entered into a 15-year, $114 million deal in 2000 for the naming rights to the home of the New England Patriots, but the company dropped the big sponsorship contract before the team's first game in the newly-named stadium. Another victim of the dot-com bubble, CMGI saw its stock price fall from a level of $40 to pennies in less than two years and the expensive stadium sponsorship was one of the first things to go.
Gillette later acquired the naming rights, and has since been acquired by Procter & Gamble, however, since the household products company still uses the Gillette brand name, the stadium still sports the name.
Air Canada Centre
related investing news
Current Name: Air Canada Centre
Location: Toronto, Canada
Major Teams: Maple Leafs (NHL), Raptors (NBA)
Cost of Naming Rights: $1.5 million/year
Construction Cost: $265 million (Canadian)
The naming rights for Toronto's major stadium, which is also known as the ACC or the "Hangar," predated the bankruptcy of Canada's largest airline. Four years after the stadium opened in 1999, Air Canada filed for bankruptcy, throwing the $1.5 million a year rights deal into question. But Air Canada emerged from bankruptcy in September 2004, 18 months after its filing, and kept its namesake.
Current Name: Minute Maid Park
Location: Houston, Texas
Major Teams: Astros (MLB)
Cost of Naming Rights: $3.3 million/year
Construction Cost: $250 million
Perhaps the biggest and most well-known faux pas in stadium naming, Enron Field was a PR disaster for the Houston Astros after the sponsoring company, Enron, was flung into bankruptcy after its infamous corporate scandal. The Astros had signed the naming deal in 1999, when Enron was seen as a Wall Street darling.
Two years later, Enron collapsed after an elaborate accounting fraud was exposed. The team bought back the stadium's naming rights for $2.1 million after Enron filed for bankruptcy.
The National Car Rental Center
Current Name: BankAtlantic Center
Location: Sunrise, Florida
Major Teams: Florida Panthers (NHL)
Cost of Naming Rights: $2.2 million/year
Construction Cost: $185 million
National Car Rental, a subsidiary of ANC Rental, won the naming rights to the home of the Florida Panthers prior to the stadium's opening in 1999. However, in 2002 ANC filed for bankruptcy and the stadium, which is now known as the BankAtlantic Center, required a name change.
Current Name: M&T Stadium
Location: Baltimore, Maryland
Major Teams: Baltimore Ravens (NFL)
Cost of Naming Rights: $5.275 million/year
Construction Cost: $220 million
The home of the Baltimore Ravens, once known as PSINet Stadium, felt the hurt of the dot-com bubble burst after it's sponsor, PSINet, filed for bankruptcy after only two seasons under the name. PSINet was one of the first internet service providers in the country, but poor management, risky acquisitions and years of losses on the bottom line led to its insolvency.
Current Name: United Center
Location: Chicago, Illinois
Major Teams: Bulls (NBA), Blackhawks (NHL)
Cost of Naming Rights: $1.8 million/year
Construction Cost: $175 million
UAL's United Airlines held stadium naming rights to Chicago's major stadium prior to its 2002 bankruptcy. There were numerous factors behind the airline's bankruptcy filing, including the economic turmoil in the wake of 9/11, skyrocketing oil prices and the dot-com bubble burst, which significantly hurt its profitable routes Silicon Valley.
Current Name: LP Field
Location: Nashville, Tennessee
Major Teams: Titans (NFL), Tigers (NCAA)
Cost of Naming Rights: $2 million/year
Construction Cost: $290 million
In 1999, Adelphia Communications signed a 15-year, $30 million deal to name the Nashville Stadium after the company. At the time it was the fifth largest cable company in the US, but after widespread internal corruption the company filed for bankruptcy in 2002, and the naming contract was dissolved. The stadium is now LP Field, after Nashville-based Louisiana Pacific.
Trans World Dome
Current Name: Edward Jones Dome
Location: Saint Louis, Missouri
Major Teams: Rams (NFL)
Cost of Naming Rights: $1.3 million/year
Construction Cost: $280 million
St. Louis built the stadium, in part, to lure an NFL team to the city, and TransWorld won the rights to name it. But almost as soon as the stadium open ed in 1995, TransWorld filed for bankruptcy after crippling contracts severely damaged their profit model. After years of financial instability, and a high profile crash that highlighted the fleet's age and decay, TWA's assets were acquired by American Airlines in 2001. American did not to assume the naming rights for the stadium.
Current Name: CitiField
Location: Flushing, New York
Major Teams: Mets (MLB)
Cost of Naming Rights: $20 million/year
Construction Cost: $900 million
Citi Field or Bailout Ballpark? That was critics were saying after Citigroup was caught in the throes of the financial crisis. On the heels of annoucing a naming deal that cost Citigroup $20 million a year over 20 years, the company was forced to take $45 billion in government bailouts and saw its stock price drop nearly 94 percent from its November 2006 levels. Because of the heavy taxpayer support given to Citigroup, lawmakers began urging the company to scrap the names rights deal. But the company stuck with its plans, and has managed to avoid bankruptcy.
Although this naming deal didn't necessarily go bust for the company, it certainly overlapped with Citi's drop during the recession.
Current Name: Verizon Center
Location: Washington, DC
Major Teams: Capitals (NHL), Wizards (NBA), Mystics (WNBA), Georgetown Hoyas (NCAA)
Cost of Naming Rights: $2.2 million/year
Construction Cost: $260 million
Known as the "Phone Booth" as it has passed from one telecommunications company to another, the MCI Center was owned by MCI WorldCom until the company went bankrupt in 2004. At the time, WorldCom's bankruptcy filing was the largest in US history. The stadium has since become known as the Verizon Center after the telecom giant acquired what remained of Worldcom's assets.
Pro Player Stadium
Current Name: Sun Life Stadium
Location: Miami, Florida
Major Teams: Dolphins (NFL), Marlins (MLB), Hurricanes (NCAA)
Cost of Naming Rights: N/A
Construction Cost: $115 million
Joe Robbie Stadium, built in 1987, was renamed Pro Player Park, and later Pro Player Stadium after a subsidiary of Fruit of the Loom won naming rights. Although Fruit of the Loom filed for Chapter 11 bankruptcy protection in 1999, Pro Player remained the name of the park until 2005, despite the brand's corporate liquidation in 2001.
Current Name: Wachovia Center
Location: Philadelphia, Pennsylvania
Major Teams: 76ers (NBA), Flyers (NHL)
Cost of Naming Rights: $1.9 million/year
Construction Cost: $210 million
Wachovia acquired the stadium's naming rights in 2003 after absorbing First Union Bank. Then, in the midst of the credit crisis, Wachovia was purchased by Wells Fargo in 2008. The name of the stadium is set to change after the end of the 2010 pro seasons, once integration of the companies is complete.