Loss of TWAs name no disaster for Rams
Loss of TWAs name no disaster for RamsPublished January 15, 2001
American Airlines' proposed buyout of TWA stands to bring a new, potentially lucrative naming-rights package for the St. Louis Rams once the airlines' $500 million deal is completed.
TWA, which agreed to pay the Rams $1.5 million a year for 20 years to put its name on their domed home when it opened in 1995, will cease to exist once the buyout is complete. The elimination of one of the country's oldest airlines, however, does not mean immediate financial harm to the Rams.
The naming-rights agreement allows the Rams to terminate the deal should TWA file for bankruptcy, according to Marc Ganis, president of Sportscorp Ltd., a Chicago-based consultancy that helped negotiate the Rams' deal with TWA. The Rams also are protected from a loss of naming-rights revenue for one year because the deal calls for the naming-rights revenue to be paid a year in advance, Ganis said.
Under the buyout agreement, TWA is expected to file for Chapter 11 Bankruptcy Court protection before being acquired by American, leaving the Rams the option of terminating the deal. The Rams control all naming rights to the facility, and the St. Louis Visitors and Convention Commission receives 25 percent of naming-rights revenue.
"At the time the naming-rights deal was made, TWA was not in the best financial conditions, so there are provisions in the deal that provide the Rams protection," Ganis said. "The team has been paid in advance, so it gives the Rams more time to land a new deal."
Rams officials refused to elaborate on any future naming-rights deals.
"There are some possibilities that things will be changing, but right now, it is too premature," Rams spokesman Rick Smith said.
The likelihood of the Rams finding a new naming-rights partner comes as the value of stadium sponsorship deals are skyrocketing, but new NFL stadiums in major markets attract the highest bidders. The latest deals average about $7 million annually, though the Houston Texans landed a 30-year, $10 million annual deal with Reliant Energy Corp. for their stadium complex.
"But it bodes well for the Rams to hit the market again," Ganis said. "Though St. Louis is not Boston or Houston, there has been a sharp escalation."
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