10 Disasters in Stadium Naming Rights
The folks at Eastman Kodak didn't mind having their name on Los Angeles' Kodak Theatre while stars were lining its red carpet for the Oscars and tomorrow's one-hit wonders were belting out stale pop songs from its American Idol stage. When Kodak went bankrupt this year, the $75 million it dropped on the theater's naming rights in 2001 seemed as bad as an investment as a 35mm camera in an all-digital world. Bye-bye Kodak, hello Dolby(DLB) Theatre.
Bankruptcies and scandals are particularly painful to the sports world, where every multimillion-dollar stadium is practically built with a "This Space For Rent" sign on its facade. Citigroup(C) stayed on the New York Mets' Citi Field after the company took $45 billion in bailouts. Air Canada and United Airlines' (UAL) names stayed on arenas in Toronto and Chicago, respectively, as those companies battled bankruptcy and shed jobs.
Those were just the companies that recovered. CNNMoney found that of the 60 publicly traded sponsors with names on sporting facilities, 37 of them (62%) have had their stocks slip in the past 12 months. Their value dropped an average 21%, compared with a 2.4% uptick in the S&P 500 during the same span.
Here are just 10 examples of stadium and arena naming deals in which the companies involved didn't foresee a financial losing streak:
Chesapeake Energy Arena
Home of: The Oklahoma City Thunder (NBA)
Cost of naming rights: $3 million a year
Chesapeake(CPK) slapped its name on Oklahoma City's arena less than a year ago and is already getting buyer's remorse.
Just after the company bought the naming rights in June, its share price started sliding and has dropped about 50% in the past year. Dirt cheap natural gas hasn't helped the company's bottom line, but neither has CEO Aubrey McClendon's SEC investigation. It turns out shareholders like to be told when their chairman gets a stake in well drilling and uses it to take out more than $1 billion in loans.
McClendon's stint as company chairman ended before the Thunder's playoff run. If they beat the Lakers and advance, will Chesapeake's name still be on the building in the next round?
Home of: The Houston Astros (MLB)
Cost of naming rights: $3.3 million a year
If you think a team won't just rip a broke company's name off its building, you obviously haven't had a glass of OJ in Minute Maid park.
When Ken Lay and his room full of smart guys drove energy giant Enron into the ground with an accounting scandal that bankrupted the company in 2001, the Astros were in no mood to keep the company's name on the building. Astros fans lost jobs and retirement savings as a result of Enron's fraudulent dealings, and the Astros were in no mood to see how the legal case against the company played out.