Golden State Warriors, Oracle, Stadium Naming Rights, And Corporate Responsibilty

Oracle, who's name now graces the Oakland Arena, and Monster Cable, which placed its name on the stadium where the San Francisco 49ers play, have got themselves into a big mess.

Now that both companies have their names on publically-owned stadium, they're discovering they can't get away with treating the public poorly.

This Oakland Tribune article tells the story:

Naming rights not all companies get
Oracle, others find monikers on arenas bring community expectations

By Barbara Grady, BUSINESS WRITER - Oakland Tribune Article Last Updated:12/10/2006 02:50:10 AM PST
A cheerleading squad from an inner city Oakland high school and their parents are angry with Oracle Corp. ever since the company -- whose name is emblazoned on the arena of the Golden State Warriors -- turned the students away from an Oracle trade show.

A San Francisco neighborhood of immigrants and members of the San Francisco Board of Supervisors are upset with Monster Cable Products Inc. because the Brisbane company -- whose name is all over the 49ers football stadium -- has laid off 120 employees who have scant chances of finding new jobs.

What Oracle and Monster Cable are learning -- the hard way -- is that with the naming rights to big professional sports stadiums comes higher expectations about how the companies will behave in the community. Redwood Shores-based Oracle, one of the world's largest software companies, is paying about $3 million a year for Oracle Arena to be the name of the Warriors' home. Huge red Oracle signs are not only highly visible to every driver on Interstate 880, every pedestrian in the neighborhood and every basketball fan coming to the arena for games, but Oracle's name also appears in newspaper, magazine and online accounts of games played at the arena.

Monster, paying $6 million over four years for naming rights to the 49ers stadium, gets the same huge publicity benefit by having its name on the former Candlestick Park not far from Highway 101.

So when the Oracle signs piqued the interest of the cheerleaders from Castlemont High School, the coach, a parent and squad members decided one October afternoon to visit the huge Oracle OpenWorld trade show in San Francisco.

To their hurt and dismay, the students were turned away from the show. "They didn't have to act that way to teenagers," said Lillian Foster, coach of the Castlemont cheerleading squad. "They asked us not to come in because they thought all we wanted to do was pass out fliers."

Said Ethel Davis, grandmother to one student, "You have these kids trying to go to learn about computers and people are shunning them."

Strike one for Oracle community relations in the hometown of its arena. Oracle officials did not know about the visit and said contracted security guards, not Oracle employees, turned the students away.

"We would have gladly welcomed the students if we knew" in advance of their interest, said Bob Wynne, chief spokesman at Oracle. The squad later was hosted at a Warriors' basketball game and is in discussions with Oracle about a donation.

Still -- like Monster Cable -- Oracle learned a lesson. "Getting the naming rights has put more expectations on Monster to explain our actions as a business," said Daniel Graham, spokesman for Monster Cable.

Citing pressure from overseas competitors, Monster laid off 120 employees from its Brisbane plant in late October. Almost all of them were longtime employees of immigrant background and limited English skills, said San Francisco Supervisor Jake McGoldrick, who represents the district in which many laid-off workers live.

Now Monster Cable faces threats of losing naming rights to the 49ers stadium because of community anger over layoffs.

"He should take the letters M-O-N-S-T-E-R off the walls of that ballpark and we will gladly release him from the contract. He can use the money to help the workers," McGoldrick said of Monster Chief Executive Noel Lee. Lee founded the company 27 years ago in the Richmond district, which McGoldrick rep resents.

When Monster moved to Brisbane, many workers followed him. Monster gave four weeks severance pay and four weeks extended health benefits to the laid-off workers. But the workers want the same severance that Monster gave to previously laid-off workers, which is four weeks plus one week for every year an employee worked at Monster, according to McGoldrick and an association representing the workers.

"The City and County of San Francisco shares a special connection with your company since your name is attached to the stadium at Candlestick Point," Supervisors Aaron Peskin, McGoldrick and Ross Mirkarimi wrote to Monster Cable. "We have seriousÊconcerns about the layoffs. As a major employer in the Bay Area, Monster Cable's mass layoffs will be felt throughout the City and County."

Lee responded in a letter to the supervisors that four weeks of severance pay is more than what other manufacturers often do and that "we are one of the highest-paying employers in the local manufacturing industry" by paying $12 to $25 an hour. "To imply that we do not treat our people well is uninformed."

But sports marketing consultant Zennie Abraham, chief executive of Sports Business Simulations of Oakland, said the high public exposure a company gets from a sports stadium naming contract puts a higher obligation on that company to act on behalf of the community.

"The name is in the public's face and because that company is associated with a good organization -- for example, the Warriors -- the general expectation from the community is that the company is going to be good," Abraham said.

"Only a big company has enough money to demand that its name is placed on a facility, but they do it because they know they are going to get enormous marketing benefits," Abraham said. With that publicity, "it's absolutely inherent in naming-rights contracts (that) they open themselves up to community concerns."

In some stadium naming contracts, such as ones crafted by American Airlines in Dallas and FedEx in Landover, Md., the naming-rights contract comes with agreements to sponsor community programs in the city, he said. The most infamous mistake involving naming rights might have been Enron Park in Houston. After the Enron scandal erupted, the Astros quickly bought out the 30-year, $100 million naming-rights deal with Enron and found a new, more palatable sponsor, Minute Maid.