MA-based Internet company CMGI yesterday announced a
15-year, $100M naming-rights deal for the $325M, 68,000-seat
stadium under construction in Foxboro, MA, to be called CMGI
Field and set to open in 2002 as home to the Revolution and
Patriots (see THE DAILY, 8/23). Under the deal, CMGI will
pay $7.6M per season for the first ten years, with terms
facing a CPI adjustment for the last five years. The WALL
STREET JOURNAL report puts the deal at "at least" $114M
(WALL STREET JOURNAL, 8/24). Shares of CMGI were up 6 3/16,
or 16%, to close at 43 15/16, and traded 13.4 million
shares, on the news (THE DAILY). BLOOMBERG's Michael Buteau
reports that shares traded yesterday was "more than twice
the three month average of 5.6 million" (BLOOMBERG, 8/24).
CRITICS CORNER: In Boston, Meg Vaillancourt writes that
Patriots Owner Robert Kraft "tied his team's image securely
to the Internet" with the deal, and adds that CMGI's annual
payment "equals that of the largest NFL naming deal to
date," which is FedEx's 27-year deal with the Redskins.
Although CMGI Chair & CEO David Wetherell "argues" that the
deal is a "cost-effective way" for his company to create a
brand identity and gain a "foothold in one of the most
explosive growth opportunities on the Web, sports and
entertainment," the deal is an "enigma to many consumers."
Wetherell: "We are obtaining an unmatched brand awareness
opportunity" (BOSTON GLOBE, 8/24). THESTREET.com's George
Mannes writes that the deal "raises the questions about what
kind of audience CMGI is playing to, and the cost-
effectiveness of measures it's taking to reach that
audience." Mannes also wonders whether the deal "will help
the company build a national or international audience."
CMGI President of Corporate Development David Andonian: "We
think we're going to get a lot of national visibility out of
this." Wetherell estimated that with signage on
scoreboards, the stadium's main entrance and "nearby roads
and highways," CMGI will receive 2.8 billion ad impressions
per year (THE STREET.com, 8/23). In Boston, Syre & Stein
write that although CMGI has a market cap of $11B, Wall
Street has had a "skeptical view" of Internet businesses
this year, and CMGI's stock price has dropped 70%. Syre &
Stein: "Can anyone say for certain that CMGI will even be
around in 2002, when CMGI Field is slated to open?" (BOSTON
GLOBE, 8/24). Also in Boston, Gatlin & Van Voorhis write
that while some wonder why CMGI "would want to spend" an
"estimated" $120M for naming rights, sports marketing
"experts" noted that CMGI is not the first "high tech firm
to use a naming rights deal to boost its image," as a
"similar approach worked" for 3Com in S.F. and PSINet in MD.
The Bonham Group Chair Dean Bonham, on the trend of Internet
companies signing naming rights deals: "This is the classic
move we're going to see in naming rights deals, and there
will be a lot of them" (BOSTON HERALD, 8/24).
JUSTIFY MY MOVE: Wetherell: "CMGI Field is just one
component of a larger strategic marketing and branding
program that CMGI is launching. Through this campaign we
hope to expand our audience reach and expose CMGI's unique
value proposition to a still greater community of consumers,
investors and business leaders" ("Market Wrap," CNBC, 8/23).
CNNfn's Willow Bay reported "the CMGI name and logo will be
the first thing football fans see when they enter" the
facility. CMGI subsidiaries, including AltaVista, iCAST and
Lycos will also have promotional and sponsorship rights in
and around the complex" ("Moneyline," CNNfn, 8/23).
