|Friday, January 25
Astros stuck with Enron name -- for now
By Darren Rovell
The back of the Houston Astros 2001 media guide carries an ad whose words seem all too surreal given recent events. Big, bold letters proclaim, "Sometimes, it's the things you don't see that have the biggest impact."
In April 1999, Enron signed a 30-year, $100 million deal -- the 10th-highest naming rights deal ever in total value -- to put its name on the new stadium. In early December, the company filed the largest Chapter 11 bankruptcy in American history.
The Astros now must contend with the public relations fallout from a deal with a company whose business practices are being investigated by a Senate committee. It used to be that stadium naming rights were considered an image risk only to the corporate sponsor. As the Enron scandal deepens, however, the company's black eye could start to hurt the team.
"Enron has to be off that building before Friday, March 29, when the Red Sox come into town for the first game here," said Ken Charles, program director of KTRH 740 AM, the Astros' flagship radio station. "Once the game is on television and it's televised in other markets, no one here wants it to be called Enron Field. It just leaves an unpleasant taste in people's mouths."
But erasing Enron's name might be tough. Pam Gardner, the Astros' president of business operations, said nothing could be done immediately since Enron "is current on its payments, and at this point (the Astros) are scheduled to open the 2002 season with the Enron name on the stadium."
Astros president Tal Smith said that although he was not privy to the contract, he believed the current payment was good through August.
"The ball's in their hands," Smith said. "As far as expediency goes, I don't think that's for the Astros to determine."
Gardner declined to discuss specific details of the contract, including whether there is an ethics clause that might allow the team to unilaterally terminate the agreement. She did say, however, that the Astros have not had discussions with Enron's bankruptcy lawyers and that other companies have already contacted the team about picking up the naming rights should the Enron deal terminate.
Beyond the contractual hurdles are the physical ones. The Enron name literally permeates the stadium, says Rick Costello, general manager of the Home Plate Bar & Grill, which is across the street from Enron Field.
"Inside the stadium, there's the clocktower and the scoreboard and probably more than 300 signs, Costello said, "It would probably take a year to get all of those logos off."
Although many stadiums still bear the names of sponsors that recently went bankrupt -- including the Baltimore Ravens' PSInet Stadium -- the Astros' situation might be the worst. Being associated with a bankrupt company is much different than being associated with a bankrupt company that has been charged with record shredding, insider trading and blatant accounting abuses.
"The Enron name will have mud on it for at least four or five years, and that's only if they can somehow recover from the mess they created," said Mike Paul, president of MGP & Associates PR, a crisis management public relations firm.
While the stadium name likely won't prevent most fans from going to see Jeff Bagwell and Craig Biggio, having the disgraced company associated with the team is only one factor in an equation that could adversely affect the Astros' business.
For one, the Enron bankrupty put some 4,500 area residents out of work, some of whom undoubtedly were ticket buyers, and the average Astros ticket in 2001 cost $20.03, 12th-highest in the major leagues.
"The most important factor of team attendance is usually winning percentage," said sports economist Robert Baade, who studies sports financing. "But per capita income is also obviously significant, and Enron is big enough to make that average income go down."
Moreover, local companies and organizations that serviced Enron might also have less money to spend. While Enron didn't buy advertising time on KTRH's broadcasts, program director Charles said the loss of Enron's support for charitable organizations and the performing arts could hit the community hard. According to published reports, Enron donated approximately $12 million to those causes in 2001, and the company even matched employee charitable contributions -- dollar-for-dollar -- up to $15,000.
"There will probably be a little less discretionary income in this town to spend on the sports teams or the theatre and cultural arts and entertainment in general," said Oliver Luck, former Houston Oilers quarterback who is now CEO of the Harris County-Houston Sports Authority. "But Houston's the fourth-biggest city, and we have more Fortune 500 companies than any city with the exception of New York."
Nevertheless, even if the Astros get out of the rights deal with Enron, they could lose money on a new deal, since the state of the economy likely will result in a deal worth less than the $3.3 million a year promised by Enron. And next year the NFL's expansion Houston Texans enter the fray, competing for the local sports dollar with the Astros and Rockets, who, incidentally, move into a new arena in Sept. 2003.
Darren Rovell covers sports business for ESPN.com. He can be reached at firstname.lastname@example.org.