Is Stadium Naming a Good Idea?

by Elaine Schwartz    •    Jun 18, 2012    •    253 Views

Home to the Miami Heat, the American Airlines Arena is hosting the NBA finals. Last year, American Airlines declared Chapter 11.

Is it the “stadium curse?”

In 2000, for $100 million, Enron bought the naming rights to the home of the Houston Astros for 30 years. Two years later, when Enron imploded, the Houston Astros bought back the contract for $2.1 million.

Last month, the Houston Dynamo soccer team held a ribbon cutting ceremony for their newly named BBVA Compass Stadium. BBVA is the US subsidiary of the largest bank in Spain, the bank that recently had an $8.3 billion euro capital shortfall. (Does that mean that any European bailout money BBVA might get will go to Houston??)

Others who have suffered the “stadium curse?” The Journal of Sports Economics includes in its list:

Sponsors, Stadiums and Situations

Firm Stadium City “Difficulty”
CMGI CMGI Field Boston Financial “distress”
Conseco Conseco Fieldhouse Indianapolis Bankruptcy
MCI MCI Center Washington, D.C. WorldCom (parent company) bankruptcy
National Car Rental National Car Rental Arena Miami ANC (parent company) bankruptcy
TWA Trans World Dome St. Louis Bankruptcy
US Airways US Airways Arena Landover, MD Bankruptcy

From “A Stadium by Any Other Name: The Value of Naming Rights,” Journal of Sports Economics, pp. 581-595, December 2007, by E.M. Leeds at al.

No doubt, firms believe a naming opportunity enables them to support a community, get a stream of positive publicity and enjoy the benefits that accompany beng associated with a stadium. However, Michael Leeds, a sports economist from Temple University believes that typically, as a competitive strategy, there is no impact on profitability. Leeds presents his research here. And for more on the “stadium curse,” this Bloomberg article discusses BBVA and the Houston Dynamo, marketplace.org interviews Michael Leeds, and BusinessInsider presents a history and stadium pictures.

And finally, you might enjoy these college stadium names.

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