Within the next two months, the 12-foot-high neon-purple letters that spell PSINet Stadium will be removed as the Baltimore Ravens begin their search for a company to buy the high-profile naming rights to the 69,000-seat stadium, team officials said yesterday.
The Ravens regained the naming and marketing rights from bankrupt PSINet Inc. in an agreement filed last week in federal court in New York. The agreement still must be approved by the court.
Team President David Modell will begin discussions with companies that have contacted the team, and also seek out other companies, said Kevin Byrne, the Ravens' vice president of public relations. The process of finding a new sponsor may take several months, he said.
"Because PSINet's financial problems have been so public, it's given a number of companies a chance to already indicate their interest," Byrne said. "We're encouraged by that."
The Ravens struck a 20-year, $105.5 million deal with PSINet, an Internet services provider, in January 1999, during a time when many high-flying dot-com companies were burning millions of dollars on elaborate marketing campaigns. But the Ashburn, Va.-based company grew too quickly and buckled under heavy debt after the technology bubble burst. The company filed for Chapter 11 bankruptcy protection last summer.
PSINet began discussing a settlement with the Ravens in the fall after the company's financial advisers shopped around the naming rights to Fortune 500 companies in the Philadelphia, Washington and Baltimore metropolitan areas, and to other Fortune 500 companies with widely recognized brand names, the court filing said.
But PSINet was unable to find a buyer. The agreement with the Ravens was "in the best interest of the creditors and the estate," PSINet's chief financial and chief restructuring officer, Lawrence E. Hyatt, said yesterday.
Team officials and attorneys representing the parties declined to say what other companies had expressed interest in the stadium-naming rights.
Under the settlement agreement, the Ravens will reimburse PSINet $5.9 million and agree to terminate sponsorship and luxury suite agreements worth $76.3 million, according to the court filing.
The Ravens will also be responsible for all costs related to removing signs and logos from the stadium, products and other advertising uses.
How much money the Ravens can command for the naming rights to the stadium remains to be seen, though sports marketing analysts say the market is nothing like it was two years ago.
The St. Louis Rams recently sold the naming rights to the former TWA Dome to brokerage firm Edward Jones in a deal worth up to $73.6 million over 23 years. And the Houston Astros have been fighting to get back the naming rights from bankrupt Enron Corp. for their park in Houston.
Still, some in the industry think that a good price can be negotiated by the Ravens, who won the Super Bowl last year and still have significant name-recognition nationwide and internationally. Others note that one of the most lucrative stadium-naming deals happened in this market with Federal Express's $205 million, 27-year deal for the Washington Redskins' stadium in Landover.
"It is a difficult time for any advertising or marketing venture," said Andrew D. Appleby, head of General Sports and Entertainment, a marketing firm in Michigan. "However, [the Ravens] are still coming off one year removed from a Super Bowl and still seemingly have a good team intact."
Appleby guessed that a local or regional company will likely emerge with the stadium-naming rights, though he said he hadn't heard of specific companies interested in a deal.
Kurt Hunzeker, editor of Team Marketing Report, a sports marketing industry newsletter, said sports teams will scrutinize potential sponsors more closely in light of public relations "nightmares" involving companies such as PSINet and Enron.
As PSINet's signage and logos are eventually taken down in Baltimore, said Byrne, the Ravens' spokesman, the team could revert to the name used the year before the PSINet deal was struck: Ravens Stadium at Camden Yards.
But there is no question that the team will seek to sell the naming rights.
Said Byrne: "We depend on the income from the naming rights and partnership."