Naming Rights On Hold For Cowboys Stadium

When the Dallas Cowboys play their first game here later this year, team owner Jerry Jones might have a temporary name for his stadium and a lot less cash than he expected.

When the Dallas Cowboys' new stadium opens in June, there may not be a corporate sponsor attached to its name. 'Chances are, there are offers, but they are coming in well below what the Cowboys want,' said naming rights consultant Terry Burton, who is not involved with the negotiations.

A naming rights deal to add hundreds of millions of dollars to his bottom line hasn't materialized, and sports business professionals said Jones might not find a sponsor this year unless he's willing to offer a deep discount. Even optimistic naming rights consultants are saying that a blockbuster deal is probably off the table in this year of economic turmoil.

"Chances are, there are offers, but they are coming in well below what the Cowboys want," said naming rights consultant Terry Burton, who is not involved with the negotiations.

He said the Cowboys would be best served by waiting for the economic downturn to "play out." Burton, owner of Vancouver, Canada-based Dig In Research 2007 Inc., which evaluates sponsorship and philanthropic naming rights deals, said he believes the market could bounce back to previous levels in time for Super Bowl XLV in Arlington in 2011.

However, such a delay means that a sponsor would miss all the publicity surrounding the opening – such as concerts, large-scale tours and other high-profile events – as well as national attention when the Cowboys play their first regular-season game in Arlington.

Cowboys spokesman Brett Daniels declined to comment about naming rights negotiations for the $1.1 billion stadium, which is projected to open June 1. Team officials, including Jones, also have declined to discuss specifics in the past.

Daniels also would not say what the team would call the stadium if a naming rights deal weren't in place when it opens.

AT&T officials, who have been rumored to be interested in the stadium's naming rights, said they have not signed a deal with the Cowboys. Sarah Andreani, spokeswoman for the telecommunications giant, said several high-profile stadiums are opening soon, and "we have been approached about most of them."

She declined to say whether AT&T was negotiating with the Cowboys.

AT&T is among the world's biggest corporate advertisers and spent about $1.3 billion to promote its brand last year. Its name can be found from the San Francisco Giants' baseball stadium to the AT&T Cotton Bowl Classic to the AT&T Center in San Antonio, home of the Spurs.

Tough Times For Development Around New Cowboys Stadium

The new Dallas Cowboys stadium was predicted to transform its surroundings into a vibrant urban center comparable to Times Square or at the very least Victory Park.

But the bright lights, restaurants, hotels and pedestrian-friendly shopping district are nowhere to be seen. The severe recession has sabotaged much of the planned development around the $1.1 billion stadium, whose inaugural event will be a June 6 concert featuring George Strait and Reba McEntire.

Aside from road improvements, a row of new town homes and a few more commercial vacancies, the neighborhoods surrounding the Cowboys stadium differ little from when construction began. And the chances of any major development opening in time for the 2011 Super Bowl are shrinking daily.

"We're totally helpless to make that go forward until we're over this problem that we're having," Arlington Mayor Robert Cluck said. "The economy is beyond anyone's control."

The 1.2 million-square-foot Glorypark retail, residential and entertainment project from Texas Rangers owner Tom Hicks is being redesigned after nine months on the shelf and has no timeline yet. Just a few blocks from the Cowboys stadium, Glorypark was expected to be a center of activity on game days and during the week of the Super Bowl.

When the Cowboys kick off their first preseason game in late summer, it's likely that rather than upscale sports bars, the closest dining will be CiCi's Pizza, Panda Express, Pitt Grill and a handful of other small restaurants.

Developers planning the Solaris Plaza hotel, retail and office complex for the historic but long shuttered Eastern Star Home off Division Street called it quits before the project was publicly announced and never even bought the land.

That project was expected to also include parking garages and convention space, according to e-mails sent to city officials in March 2008. It wasn't clear when plans for the development were halted. Portions of the old retirement home were in such bad shape that they had to be demolished, said former owner Hal Thorne, a Grand Prairie lawyer.

The e-mails about Solaris Plaza and others relating to projects around the stadium were obtained as part of a Public Information Act request made by The Dallas Morning News last year. The city appealed to the Texas attorney general's office, which decided that many of the documents and e-mails were public records. The city disagreed and sued the attorney general's office to prevent their release.

Some of the documents were finally released early this year.

Arlington supporters of the new Cowboys stadium hoped that it would be a catalyst for redevelopment in an area dominated by parking lots, motels, auto sales and repair and retail targeting immigrants. The mixed-use developments and pricey condominiums planned for the area would have targeted the more affluent football fans who could afford tickets that cost as much as a few hundred dollars and seat licenses that cost thousands.

The city is contributing about $325 million in funding toward construction of the stadium.

"The city of Arlington was clearly banking on that ancillary development," said economist Bernard Weinstein. "It's not the city of Arlington's fault or the Cowboys' fault that we're having the worst economic downturn since the 1930s."

The adjacent developments were considered particularly important since most of the money generated inside the stadium will go to the Cowboys or toward paying off a portion of their debt.

Since the stadium will also be owned by the city ($325m in funding), it will not generate property taxes.

As far as the Super Bowl is concerned, even if dirt started to fly this week, there's no guarantee that a large, full-service hotel or big mixed-use development near the stadium would be finished in time for the Super Bowl.

Source: Dallas Morning-News

Past Bankruptcies In The Sports World

With the current economic downturn, here are some of the sports franchises or majority owners who have declared bankruptcy in the past 30 years.

The Pittsburgh Penguins Partners, who owned 100% of the Pens, filed for Chapter XI protection on June 13th, 1975.

The Cleveland Barons, an NHL franchise that started out as the California Golden Seals in 1967 and moved to Cleveland in 1976, were merged with the Minnesota North Stars, who were also having financial problems, in 1978.

Bruce McNall, who owned 28% of the Los Angeles Kings, filed for Chapter XI protection on May 12th, 1995

The Pittsburgh Penguins, then owned by a group headed by Roger Marino, filed for Chapter XI protection on October 13th, 1998

In early January 2003, the Ottawa Senators, who listed debts of $166.2 million, including $50.7 million to Covanta Energy Corp., $40 million to the Canadian Imperial Bank of Commerce, $20 million to FleetBoston Financial Corp., and $14.2 million to the NHL, filed for bankruptcy protection

A few days later, on January 13th 2003, the Buffalo Sabres filed for Chapter XI protection, listing $206 million in debt to its 40 largest creditors.

On June 6th, 2008, William "Boots" Del Biaggio, who owned 20% of the Nashville Predators, filed for bankruptcy.

In addition, the Tribune Company, owners of the Chicago Cubs, file for bankruptcy protection on December 9th, 2008; the Cubs were not part of the filing.

The dates of these filings are not strongly related to business cycle downturns. The June 1975 filing by the Penguins took place two months after the March 1975 trough (identified by the NBER Business Cycle Dating Committee) and the Del Baggio filing was during the current downturn. The rest took place during expansions. Only one of these franchises, the Cleveland Barons, did not emerge from bankruptcy. In two cases, it was minority owners that were bankrupt.

It's pretty clear that we have not yet reached the bottom of the current downturn. Based on past events, if a North American pro sports team is going to file for bankruptcy protection under Chapter XI in the near future, it will probably be a franchise in the NHL, and that franchise is unlikely to disappear. I have not been following the events on the other side of the Atlantic recently, but I would guess that things could be bad for football clubs in the top European leagues.

Sports Teams Using Food To Draw Crowd

Forced to get creative from the "Great Recession," sports teams — already freezing or lowering ticket prices — are using food to coax us to the ballpark or arena.

It's not a bad idea considering the fact that the CDC says two in every three Americans are overweight.

It's also not a bad idea because like tickets and salaries, the markup on concession items at a sporting event are due for a major correction.

Two minor league teams — the Lakewood BlueClaws and the Trenton Thunder — are offering up a can't pass up type of deal. The teams recently announced that kids, 12 and under, will get a free hot dog, bag of potato chips and 12-ounce soda with their ticket.

But the minor leagues are the minor leagues.

So you can imagine our shock when we heard that the San Diego Padres are now offering the "Five for $5" plan. It's a bucket of popcorn, a cookie, a 22-ounce soda, a hot dog and peanuts for $5 total. As a reference point, the Padres charged $4 for that hot dog and $4.25 for that soda last year.

I'm just going to guesstimate here, but I'm thinking the retail cost of this deal last year probably would have cost you about $18.50. This year, it's $5. That's a 73 percent drop in prices.

Crazy? Nah.

It still makes sense to the Padres. See, the retail cost of these items is around $1. So instead of making $17.50 on the sale of all of these items, the Padres will make $4. The difference of course is that, with the price lowered, the Padres will likely sell at least twice the amount of food and potentially more tickets. Last year, the Padres had their lowest total attendance in five years. If the game is a great background for a cheap dinner, so be it.

Expect more teams to understand this margin correction on concessions is coming pretty soon. The days of $1 hot dog night are over. At least for now, that's going to be every night in many places around the country.

By Darren Rovell, CNBC

Yankees, Bank of America End Sponsorship Talks

The New York Yankees and Bank of America have ended talks on pursuing a major sponsorship deal.

The deal was being termed as a "pseudo stadium naming rights deal" because the two parties had discussed giving the bank premium branding in the new Yankee Stadium.

On Thursday afternoon, Bank of America confirmed to Newsday that talks were suspended last month.

A Yankees official told CNBC on Thursday that the two mutually agreed to part ways after seeing the heat that Citigroup was getting for putting its name on the new Mets stadium.

New York Yankees spokesperson Alice McGillion released this statement Thursday afternoon:

"During our discussions with Bank of America, we discussed a special relationship, not a naming rights relationship, with the bank at the new stadium. In light of recent events, with the downturn in the economy and the effect on financial institutions including government support of those institutions, we have determined that it is better to enter into a traditional business arrangement with a financial institution."

Both Bank of America and Citigroup received $45 billion in TARP funds.

Source: CNBC