Essay: Public Relations Lessons From How the Houston Astros got "Enron-ed"

Abstract

Essay:Public Relations Lessons From How the Houston Astros got "Enron-ed" Ric Jensen (bio) Essay: Public Relations Lessons From How the Houston Astros got "Enron-ed" When the Houston Astros first opened their new baseball stadium in downtown Houston in 2000, the ballpark and the city received largely positive national attention about the uniqueness of the facility. In 2000, an article in Sports Illustrated proclaimed, "With all its bells and whistles and architectural quirks, Houston's new dinger-friendly Enron Field is every bit as thrilling as the Astrodome was dull." Sportswriters and fans loved the steam-powered locomotive that runs on railroad tracks above left field, and the old-fashioned hand-operated scoreboard. The one factor the owners could not count on was the corporate name prominently featured all around the ballpark. The naming sponsor was the Enron Corporation, which in 2000 signed a deal with the Astros to have the park called Enron Field. But less than two years later, the energy company declared bankruptcy after a series of legal and management scandals. This presented the Astros with three major public relations challenges: deciding how to act when Enron became embroiled in controversy, protecting the organization's reputation during the scandal, and developing a strategy to disassociate the Astros from Enron. Can Naming-Rights Agreements Become a Public Relations Challenges? Although many marketing and public relations experts contend that stadium naming-rights agreements are beneficial for sports organizations and fans, others are more skeptical. When corporate sponsors replace historical ballpark names, the fragile relationship between cities, sports teams and fans can be threatened. Selling stadium naming-rights to corporations may send a signal to fans that athletic events are just another business and that loyal supporters are nothing more than paying customers. There are several examples of public relations disasters associated with corporate naming partnerships: • RCA kept the naming rights to the Indianapolis Colts' domed stadium even after the company moved most of its manufacturing jobs from Indiana to Mexico. [End Page 104] • Firms that purchased naming rights for the Baltimore Ravens stadium (PSI Net), the St. Louis Rams dome (Trans-World Airlines), the St. Louis Blues arena (Savvis) and the Carolina Panthers ballpark (National Car Rental) soon went bankrupt or became defunct. These teams were stuck with corporations that were no longer economically viable. • After historic Candlestick Park was renamed 3Com Park, so many people protested that the city abandoned the naming-rights agreement worth $1 million per year. • Denver residents refused to acknowledge the corporate name of the new stadium built for the NFL's Denver Broncos. Rather than accept the name Invesco Field, public opposition forced the Broncos and Invesco to settle on a less visible stadium name, Invesco Field at Mile High. The Rise and Fall of Enron Prior to its bankruptcy in 2001, Enron employed more than 21,000 people and was one of the world's leading energy providers. The company claimed revenues of more than $101 billion in 2000 and was named "America's Most Innovative Company" by Fortune for six straight years. In December 2001, the company collapsed and filed the largest bankruptcy in American history. There were allegations that Enron executives knew of the pending collapse and sold their Enron stock at a profit, while employees had no such warning. As a result, the life savings of many Enron employees and shareholders became worthless. Following the bankruptcy petition, many Enron officers were indicted for bank fraud, securities fraud, wire fraud, money laundering and insider trading. The scandal has been so ingrained into American culture that the word Enron has now evolved into commonly used terms to describe corporate wrongdoing. To be "Enron-ed" is to be victimized by the company you work for. An "Enronian" is an employee or investor who has suffered from corporate scandal through no fault of his or her own. How Enron's Collapse Affected the Astros The Houston Astros new ballpark, first known as The Ballpark at Union Station, opened on April 9, 2000. In April 1999, Enron signed a 30-year $100 million deal for the naming rights to the ballpark—the 10th most valuable naming rights agreement at the time...