The Stadium Curse Returns

Five years ago a CNNMoney writer named Chris Isidore was writing about a link between companies who put their names on sports stadiums and those companies’ financial well-being. What is the curse? From CNNMoney:

The curse is a simple one: If you have the hubris to put your name on a major North American sports venue, you and your stockholders will pay.

In 2001 and 2002, the Stadium Curse was alive and well (especially as the stock market was tanking). 63 stadiums had corporate sponsorship. According to CNNMoney:

When financial services firm Conseco Inc. filed for bankruptcy protection in 2002, it joined WorldCom, United Airlines (UAL: Research, Estimates), Adelphia Communications and US Airways as the victims of the curse last year alone.

After the collapse of Enron, PSINet, Trans World Airlines and National Car Rental parent ANC in 2001, that meant that nine of 63 stadium sponsors, or 14 percent . . . filed for bankruptcy in a 19 month [period].

There have been college finance professors who have studied the curse (which I suppose makes it somewhat more legitimate).

And now it’s back. From Reuters:

The Rangers baseball team on Monday announced the ballpark, known since 2004 as Ameriquest Field, will be renamed Rangers Ballpark in Arlington.

Ameriquest had in May 2004 signed a 30-year naming rights agreement worth a reported $75 million, but the Rangers said they asked Ameriquest last year to end that agreement. The new name is similar to the field’s original name, The Ballpark in Arlington.

Ameriquest is involved in the subprime mess.

Last week, Ameriquest’s parent, ACC Capital Holdings Corp., said it closed four centers, eliminating an unspecified number of jobs, in what it called a “very challenging” market for making home loans to higher-risk borrowers.

The cuts followed the elimination of some 3,800 employees last May by Orange, California-based ACC. The company said it still employed about 6,000 people prior to last week’s cuts.

Can Ameriquest survive? They were once the largest subprime lender in the country but sales volume has plunged. From Bloomberg:

Last month, ACC Capital received a cash infusion from Citigroup Inc., which agreed to become the company’s primary “warehouse,” or short-term lender.

New loan volume at ACC Capital’s lending units, the top provider of subprime loans during 2005, plunged 61 percent last year to $29 billion, dropping it into seventh place among such lenders, according to newsletter Inside B&C Lending.

If the “curse” continues, the outlook is not a positive one for Ameriquest. Also on the Stadium Curse Stock Index list: Ford and GM (the Lions and Vancouver Canucks, respectively.)

Be warned.