The new economy is officially dead. The old economy is officially still alive and kicking. And shaving.
Patriots rename stadium for Gillette
By Justin Pope, Associated Press, 08/05/02
FOXBORO, Mass. -- Gillette Co. gets a Super Bowl champion with a sparkling new stadium. The New England Patriots get a stable, blue chip partner with strong local ties.
And CMGI gets out of a deal it couldn't afford.
In the stadium-naming industry's latest move toward more stable partnerships, the Patriots said Monday their new $325 million home would be renamed Gillette Stadium, ending its association with struggling Internet holding company CMGI.
Terms of the 15-year deal weren't disclosed. Nor would officials say whether it was comparable to the $114 million CMGI promised to pay over 15 years for the naming rights in December of 2000, when its stock was trading around $44 per share. The company's shares are now trading around 40 cents. They closed up a penny, at 40 cents a share, on Monday.
"This is a three-party agreement that I think has worked in everyone's best interest," Patriots owner Robert Kraft said during a press conference at midfield.
The deal, just hours before a practice open to some fans and two weeks ahead of the Patriots' Aug. 17 exhibition-game debut in the stadium against the Philadelphia Eagles, poses logistical problems. The team had already tackled one, painting a Gillette logo at midfield. But Kraft said he had no idea how long it would take to replace, for example, the string of nearby highway sings that still say "CMGI Field."
The agreement is the latest example of the multibillion dollar stadium naming rights industry following the lead of the stock markets and showing a preference for more stable, traditional companies. The Baltimore Ravens renamed their field Ravens Stadium after its former corporate sponsor, PSINet went bankrupt. Enron Field in Houston became Minute Maid Park.
"Right now with the business climate overall we feel our capital is best placed in our core businesses," said Thomas Oberdorf, CMGI's chief financial officer.
Oberdorf would not give details of the negotiations leading to the name change, but said "the Patriots basically came to us. They had been speaking to Gillette."
Gillette CEO James Kilts said the deal had developed in "the last few weeks," but refused to say who approached whom. He spoke of Boston-based Gillette's long history in sports sponsorship, dating back to Honor Wagner hawking its razors in 1910 and 1939, when the company became the exclusive broadcaster of the World Series.
"We really connect with consumers through our sports marketing," Kilts said.
Andover-based CMGI, owner of such Web sites as uBid.com and the AltaVista portal, once dreamed of becoming a broad-based Internet holding company, and hoped the stadium contract would spread its brand.
But when the tech bubble burst it was forced into a comprehensive restructuring and thousands of layoffs.
The stadium opened in May for Major League Soccer's New England Revolution. CMGI was not required to begin making $7.6 million annual payments on the deal until the stadium was complete. Kraft refused to say if CMGI had made such payments, but said it had met every financial commitment.
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