Striking out Enron
Astros want to drop Enron name off stadiumPosted: Tuesday February 05, 2002 1:06 PM
Updated: Thursday February 07, 2002 4:07 AM
HOUSTON (AP) -- The Houston Astros don't want the name "Enron Field" atop their 2-year-old ballpark.
"Thousands of people who have been adversely affected by the Enron collapse are being reminded on a daily basis of this continuing tragedy," attorneys for Astros owner Drayton McLane wrote in a motion filed Tuesday with the New York court overseeing Enron's bankruptcy.
The team wants the bankruptcy court to force Enron to make a decision on whether to honor the 30-year, $100 million naming rights agreement signed in 1999.
The former energy giant's next payment for Enron Field's naming rights is due Aug. 31. The Astros say it isn't realistic to expect Enron to be able to make the $3.7 million payment.
"The Enron logo displayed on the Stadium wrongly suggests to the public that the Astros are associated with the alleged bad business practices of Enron," the motion states. "As it stands, the Houston Astros arguably are viewed as Enron's team."
Enron, considered the nation's seventh-largest company in 2000, wilted late last year as investor confidence vanished amid wave of questions over the energy trader's accounting practices.
According to the Astros' motion, the team has requested that Enron allow it to move forward with a new naming rights agreement with a third party, but Enron has refused.
"Enron has mishandled this situation from the outset, thereby squandering any value that could have been realized through a consensual resolution of the matter," the Astros' attorneys argued.
The lawyers now refer to the team's association with Enron as "forced."
Enron spokeswoman Karen Denne said the company's naming rights agreement with the team is a valuable asset the former energy giant isn't willing to give up.
"Our agreement with the Astros is in full force and effect, which is in the best interest of our creditors," she said. "The naming rights agreement is a valuable asset in the estate."
Pam Gardner, Astros president of business operations, said the team had no other choice than to ask for the bankruptcy court to intervene.
"We have worked diligently with Enron to transition the stadium name, but we've been unsuccessful," she said.
Since Enron filed for bankruptcy protection in December, the company has spent about $108,000 for a suite and nearly $90,000 for 2002 season box seats as required in the license agreement, Gardner said.
So far, Enron has made three annual payments totaling $10.25 million and is current on its payments, the Astros said.
"We speculate that the only reason that Enron continues to make these expenditures is that Enron believes it can sell the baseball stadium's naming rights to someone else without the consent of the Astros," Gardner said.
According to the Astros, Enron can't sell the field's naming rights without the team's permission.
If Enron were to attempt to sell the naming rights, the Astros say the agreement prohibits a third party from changing the name of the ballpark until April 7, 2009.
As part of the naming rights agreement, Enron's name is plastered on all exterior and interior signage, uniforms worn by game-day staff, cups, napkins and plates.
"The current public perception of Enron is incompatible with the honesty and integrity embodied in baseball, as America's national pastime, and espoused by the Houston Astros," the motion concludes. "This court should require Enron to make an immediate decision regarding the License Agreement so that the Astros will not continue to be harmed throughout the 2002 baseball season."
Denne, Enron's spokeswoman, says she isn't quite sure how the team is being harmed by the company's name being prominently placed on Enron Field.
"How good a team they are is determined by how they play on the field, not the name on the stadium," she said.