Will Ravens be playing in the PSINet Stadium? Club is reported to be negotiating to sell name rights


The Ravens are negotiating with PSINet Inc., a fast-growing, Northern Virginia-based Internet service provider, to name the Ravens downtown stadium, according to two sources familiar with the discussions.

If a deal were to be completed, PSINet could put its corporate name or that of a product or service on the building, such as PSINet Stadium at Camden Yards.

Although several issues remain to be worked out -- including how much the sponsor would pay for the naming rights -- the team is focusing on a deal with PSINet, said the sources, who spoke on the condition of anonymity.

The talks could take several weeks or even months to conclude because of the complexity of the proposed deal, one source said.

Ravens Executive Vice President David Modell declined this week to confirm or deny that the Ravens are negotiating with PSINet. But he said talks aimed at finding a sponsor for the stadium have reached a serious stage.

"We have had some very serious discussions. There are some large issues that need to be worked out," Modell said. "I do not want to say much about the whole topic."

Robert D. Leahy, senior vice president of corporate marketing and communications for PSINet, flatly denied having any talks with the Ravens on naming rights.

"There is no agreement with the team and I'm not in negotiations with the team," Leahy said.

But he said the company is exploring sports sponsorships as a way to increase its name recognition among consumers.

PSINet signs were installed in the stadium in the past few weeks, on the concrete facia below the upper deck.

"We have purchased the signs inside the stadium, and we will see how that goes," Leahy said.

Paying for the rights to name a stadium after the company "has not been a topic yet," he said this week. But, he added, "you are piquing my interest."

PSINet serves chiefly business customers, providing them with high-speed Internet access, e-mail service, Web site design and secure electronic commerce.

This year, PSINet invested $45 million in fiber-optic cables connecting Washington and New York, with service to cities in between. It is looking to open a sales office in Baltimore this year, he said.

"We have a marketing strategy that involves the eastern corridor," Leahy said.

Added TV exposure

The $223 million stadium at Camden Yards, which opened this fall, seats 69,000 people and would bring a sponsor the additional exposure of NFL television audiences. The taxpayer-financed stadium became a political issue in the recent election campaigns as some criticized the state's funding of the downtown Baltimore site as well as Maryland's contribution to the Redskins' new home near Washington.

The Ravens, who paid the equivalent of $12 million toward construction, also paid the state $10 million for the right to resell the stadium's name. State officials have said they expected the team to profit on the resale.

In talks with other suitors this year, the Ravens were asking $4 million a year for 20 years for the naming rights. It is not known whether the Ravens have altered their asking price in discussions with PSINet, but the team has said it hopes to set a new standard for the industry on such deals.

In June, the financial services firm Raymond James & Associates agreed to pay $2.5 million a year for 13 years to name the Tampa Bay Buccaneers' new home. Cellular phone equipment company Ericsson agreed several years ago to pay $2 million annually for 20 years to name the Carolina Panthers' stadium in Charlotte, N.C.

More than a name

The Ravens hope to get more by offering a sponsorship that would go beyond putting a name on the outside of the building.

Corporate logos could appear on cheerleader uniforms and products could be displayed inside the stadium, among other things. A double-decked skybox has been reserved for the sponsor.

PSINet clearly fits the profile of the kind of company that has been engaging in naming-rights deals: a big player in a highly competitive business where an edge in consumer awareness can mean the difference between survival or extinction.

Among PSINet's rivals are integrated communications giants such as Sprint Corp., GTE Corp., MCI Worldcom and AT&T; Corp.

Besides Ericsson Stadium in Charlotte, other stadiums that have acquired high-tech sponsors in recent years are San Francisco's 3Com Park, San Diego's Qualcomm Stadium, and Jacksonville, Fla.'s, Alltel Stadium.

PSINet, a pioneer in the commercialization of the Internet, was founded in 1989 as Performance Systems International Inc.

In January, it turned down a $400 million purchase offer from U.S. Internetworking. PSINet employs about 1,600 people, about half at the headquarters in Herndon, Va.

In the first nine months of the year, the company posted revenue of $165.7 million -- a 90 percent increase from the same period a year earlier -- and a loss of $134.9 million.

The loss included some one-time-only charges related to the purchase of equipment and subsidiaries. Five companies were purchased in the third quarter, two in Japan and one each in Canada, Hong Kong and South Korea.

PSINet has tripled in size over the past 18 months and, with its recent acquisitions, is on a pace to achieve annualized revenues of $300 million.

Ulric Weil, an analyst who covers PSINet for Friedman, Billings, Ramsey, said the company has had its ups and downs but has strengthened its management team in recent years and appears poised for strong international growth.

"They are well-positioned," Weil said. "Unless they make major mistakes from here on out, I think they are finally on the right track."

PSINet has begun to run television ads and take other measures to increase its visibility, he said. "They are stepping out," he said.

Seeking recognition

This year, PSINet signed on Trone Advertising in New York and charged the firm with boosting PSINet's brand awareness among consumers, according to Adweek magazine.

Charles "Chip" Morris, manager of T. Rowe Price's Science and Technology Fund, which owns several hundred thousand shares of PSINet, said a naming-rights deal would not be out of character for the aggressive and well-financed PSINet.

"Judging from what they are trying to do with the business, naming a stadium would be consistent with their objective of becoming a major global player," Morris said.

Other companies the Ravens had approached about naming rights include Comcast, Sprint, Federal Express Corp. and United Parcel Service.

Pub Date: 11/12/98

Copyright © 2019, The Baltimore Sun, a Baltimore Sun Media Group publication | Place an Ad