THE ENRON FIELD CURSE: Why You Should Avoid Companies That Put Their Name On A Stadium

enron field

[credit provider=”AP”]

There’s a well-known phenomenon that bad things happen to companies that put their name on a stadium.The most notorious example was in 2000 when Enron bought the rights to Enron Field in a $100-million, 30-year deal. Just two years later, the defunct company would sell the contract back to the Houston Astros for $2.1 million.

The curse also famously struck TWA, PSINet, Fruit Of The Loom, CMGI Inc., Savvis Communications, 3 Com and Conseco.

How consistent is the trend?

Victor Niederhoffer analysed the performance of companies buying naming rights from 1990 to 2001, in his book Practical Speculation. These companies trailed the S&P 500 by a median of -8% in the year they named a stadium and a median of -27% three years later (they beat the index on mean thanks to the extraodinary performance of Qualcomm).

Niederhoffer attributed the stadium curse to hubris: “Corporations are beset by the same harmful tendencies as investors. When they are at their peak, they reach for the sun.”

The following slides show what happened to every company that named a stadium in the nineties.

[slideshow]
[slide
permalink=”target-trailed-the-sp-500-by-35-in-the-year-it-named-this-stadium-1990-1″
title=”Target trailed the S&P 500 by -3.5% in the year it named this stadium (1990)”
content=”Source: Practical Speculation
image=”http://static.businessinsider.com/image/4f15aab66bb3f7660e00005c”
caption=””
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]
[slide
permalink=”delta-trailed-the-sp-500-by-77-in-the-year-it-named-this-stadium-1991-2″
title=”Delta trailed the S&P 500 by -7.7% in the year it named this stadium (1991)”
content=”Source: Practical Speculation
image=”http://static.businessinsider.com/image/4f15bcf46bb3f76224000044″
caption=””
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]
[slide
permalink=”american-west-trailed-the-sp-500-by-86-in-the-year-it-named-this-stadium-1992-3″
title=”American West trailed the S&P 500 by -86% in the year it named this stadium (1992)”
content=”Source: Practical Speculation
image=”http://static.businessinsider.com/image/4f15bda069beddb77300003d”
caption=””
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]
[slide
permalink=”united-trailed-the-sp-500-by-39-in-the-year-it-named-this-stadium-1994-4″
title=”United trailed the S&P 500 by -39% in the year it named this stadium (1994)”
content=”Source: Practical Speculation
image=”http://static.businessinsider.com/image/4f15be6f6bb3f7a73a00002a”
caption=””
credit=””
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]
[slide
permalink=”coors-trailed-the-sp-500-by-2-in-the-year-it-named-this-stadium-1995-5″
title=”Coors trailed the S&P 500 by -2% in the year it named this stadium (1995)”
content=”Source: Practical Speculation
image=”http://static.businessinsider.com/image/4f15bfc4ecad04481b00001d”
caption=””
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]
[slide
permalink=”fleetboston-financial-trailed-the-sp-500-by-82-in-the-year-it-named-this-stadium-1995-6″
title=”FleetBoston Financial trailed the S&P 500 by -8.2% in the year it named this stadium (1995)”
content=”Source: Practical Speculation
image=”http://static.businessinsider.com/image/4f15c109eab8ea576200000e”
caption=””
credit=””
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]
[slide
permalink=”general-motors-trailed-the-sp-500-by-86-in-the-year-it-named-this-stadium-1995-7″
title=”General Motors trailed the S&P 500 by -8.6% in the year it named this stadium (1995)”
content=”Source: Practical Speculation
image=”http://static.businessinsider.com/image/4f15c1eb6bb3f7a42e000057″
caption=””
credit=””
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]
[slide
permalink=”keybank-trailed-the-sp-500-by-11-in-the-year-it-named-this-stadium-1995-8″
title=”KeyBank trailed the S&P 500 by -11% in the year it named this stadium (1995)”
content=”Source: Practical Speculation
image=”http://static.businessinsider.com/image/4f15c2aceab8ea176000000d”
caption=””
credit=””
credit_href=””
]
[slide
permalink=”3com-beat-the-sp-500-by-47-in-the-year-it-named-this-stadium-1995-9″
title=”3com beat the S&P 500 by 47% in the year it named this stadium (1995)”
content=”Source: Practical Speculation
image=”http://static.businessinsider.com/image/4f15c38169bedd6a13000039″
caption=””
credit=””
credit_href=””
]
[slide
permalink=”continental-beat-the-sp-500-by-96-in-the-year-it-named-this-stadium-1996-10″
title=”Continental beat the S&P 500 by 9.6% in the year it named this stadium (1996)”
content=”Source: Practical Speculation
image=”http://static.businessinsider.com/image/4f15c3dc6bb3f78c3c00002f”
caption=””
credit=””
credit_href=””
]
[slide
permalink=”ericsson-beat-the-sp-500-by-35-in-the-year-it-named-this-stadium-1996-11″
title=”Ericsson beat the S&P 500 by 35% in the year it named this stadium (1996)”
content=”Source: Practical Speculation
image=”http://static.businessinsider.com/image/4f15c463ecad044d1b000037″
caption=””
credit=””
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]
[slide
permalink=”edison-international-beat-the-sp-500-by-58-in-the-year-it-named-this-stadium-1997-12″
title=”Edison International beat the S&P 500 by 5.8% in the year it named this stadium (1997)”
content=”Source: Practical Speculation
image=”http://static.businessinsider.com/image/4f15c4e869bedd5324000009″
caption=””
credit=””
credit_href=””
]
[slide
permalink=”qualcomm-trailed-the-sp-500-by-44-in-the-year-it-named-this-stadium-1997-13″
title=”Qualcomm trailed the S&P 500 by -4.4% in the year it named this stadium (1997)”
content=”Source: Practical Speculation
image=”http://static.businessinsider.com/image/4f15c54fecad04522100000f”
caption=””
credit=””
credit_href=””
]
[slide
permalink=”alltel-trailed-the-sp-500-by-01-in-the-year-it-named-this-stadium-1997-14″
title=”Alltel trailed the S&P 500 by -0.1% in the year it named this stadium (1997)”
content=”Source: Practical Speculation
image=”http://static.businessinsider.com/image/4f15c5f2ecad042d19000043″
caption=””
credit=””
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]
[slide
permalink=”network-associates-beat-the-sp-500-by-61-in-the-year-it-named-this-stadium-1998-15″
title=”Network Associates beat the S&P 500 by 61% in the year it named this stadium (1998)”
content=”Source: Practical Speculation
image=”http://static.businessinsider.com/image/4f15c8986bb3f7cb4a000029″
caption=””
credit=””
credit_href=””
]
[slide
permalink=”bank-one-trailed-the-sp-500-by-23-in-the-year-it-named-this-stadium-1998-16″
title=”Bank One trailed the S&P 500 by -23% in the year it named this stadium (1998)”
content=”Source: Practical Speculation
image=”http://static.businessinsider.com/image/4f15c987ecad043d21000047″
caption=””
credit=””
credit_href=””
]
[slide
permalink=”american-airlines-trailed-the-sp-500-by-34-in-the-year-it-named-this-stadium-1998-17″
title=”American Airlines trailed the S&P 500 by -34% in the year it named this stadium (1998)”
content=”Source: Practical Speculation
image=”http://static.businessinsider.com/image/4f15c9fd69bedd1e2700001b”
caption=””
credit=””
credit_href=””
]
[slide
permalink=”safeco-corp-trailed-the-sp-500-by-62-in-the-year-it-named-this-stadium-1999-18″
title=”Safeco Corp. trailed the S&P 500 by -62% in the year it named this stadium (1999)”
content=”Source: Practical Speculation
image=”http://static.businessinsider.com/image/4f15ca7deab8ea3f62000054″
caption=””
credit=””
credit_href=””
]
[slide
permalink=”conseco-trailed-the-sp-500-by-61-in-the-year-it-named-this-stadium-1999-19″
title=”Conseco trailed the S&P 500 by -61% in the year it named this stadium (1999)”
content=”Source: Practical Speculation
image=”http://static.businessinsider.com/image/4f15caddecad04762f000018″
caption=””
credit=””
credit_href=””
]
[slide
permalink=”pepsi-trailed-the-sp-500-by-33-in-the-year-it-named-this-stadium-1999-20″
title=”Pepsi trailed the S&P 500 by -33% in the year it named this stadium (1999)”
content=”Source: Practical Speculation
image=”http://static.businessinsider.com/image/4f15cb6d69bedd913000000e”
caption=””
credit=””
credit_href=””
]
[slide
permalink=”staples-trailed-the-sp-500-by-48-in-the-year-it-named-this-stadium-1999-21″
title=”Staples trailed the S&P 500 by -48% in the year it named this stadium (1999)”
content=”Source: Practical Speculation
image=”http://static.businessinsider.com/image/4f15cbbf69beddf432000002″
caption=””
credit=””
credit_href=””
]
[slide
permalink=”adelphia-beat-the-sp-500-by-24-in-the-year-it-named-this-stadium-1999-22″
title=”Adelphia beat the S&P 500 by 24% in the year it named this stadium (1999)”
content=”Source: Practical Speculation
image=”http://static.businessinsider.com/image/4f15cc266bb3f79b4800001b”
caption=””
credit=””
credit_href=””
]
[slide
permalink=”fedex-trailed-the-sp-500-by-28-in-the-year-it-named-this-stadium-1999-23″
title=”Fedex trailed the S&P 500 by -28% in the year it named this stadium (1999)”
content=”Source: Practical Speculation
image=”http://static.businessinsider.com/image/4f15ccd469bedd1e27000041″
caption=””
credit=””
credit_href=””
]
[slide
permalink=”mellon-financial-corp-trailed-the-sp-500-by-21-in-the-year-it-named-this-stadium-1999-24″
title=”Mellon Financial Corp. trailed the S&P 500 by 21% in the year it named this stadium (1999)”
content=”Source: Practical Speculation
image=”http://static.businessinsider.com/image/4f15cd51eab8ea0e7a00000e”
caption=””
credit=””
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]
[slide
permalink=”gaylord-entertainment-trailed-the-sp-500-by-20-in-the-year-it-named-this-stadium-1999-25″
title=”Gaylord Entertainment trailed the S&P 500 by -20% in the year it named this stadium (1999)”
content=”Source: Practical Speculation
image=”http://static.businessinsider.com/image/4f15cdcdeab8eab375000021″
caption=””
credit=””
credit_href=””
]
[slide
permalink=”comerica-beat-the-sp-500-by-37-in-the-year-it-named-this-stadium-2000-26″
title=”Comerica beat the S&P 500 by 37% in the year it named this stadium (2000)”
content=”Source: Practical Speculation
image=”http://static.businessinsider.com/image/4f15ce3feab8ea147a000013″
caption=””
credit=””
credit_href=””
]
[slide
permalink=”enron-beat-the-sp-500-by-98-in-the-year-it-named-this-stadium-2000-27″
title=”Enron beat the S&P 500 by 98% in the year it named this stadium (2000)”
content=”Source: Practical Speculation
image=”http://static.businessinsider.com/image/4f15ced1ecad044b3100002d”
caption=””
credit=””
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]
[slide
permalink=”xcel-energy-beat-the-sp-500-by-592-in-the-year-it-named-this-stadium-28″
title=”Xcel Energy beat the S&P 500 by 59.2% in the year it named this stadium.”
content=”Source: Practical Speculation
image=”http://static.businessinsider.com/image/4f15cf6aecad045d35000019″
caption=””
credit=””
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]
[slide
permalink=”pnc-trailed-the-sp-500-by-10-in-the-year-it-named-this-stadium-2001-29″
title=”PNC trailed the S&P 500 by -10% in the year it named this stadium (2001)”
content=”Source: Practical Speculation
image=”http://static.businessinsider.com/image/4f15d0c369beddf93c000004″
caption=””
credit=””
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]
[slide
permalink=”american-airlines-trailed-the-sp-500-by-30-in-the-year-it-named-this-stadium-2001-30″
title=”American Airlines trailed the S&P 500 by -30% in the year it named this stadium (2001)”
content=”Source: Practical Speculation
image=”http://static.businessinsider.com/image/4f15d13469bedde237000019″
caption=””
credit=””
credit_href=””
]
[slide
permalink=”heres-all-the-data-31″
title=”Here’s all the data”
content=””
image=”http://static.businessinsider.com/image/4f15a9f1ecad046b6900005f”
caption=””
credit=””
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]
[slide
permalink=”for-macro-indicators-look-at-other-buildings-32″
title=”For macro indicators, look at other buildings”
content=”Look How Skyscrapers Have Predicted Recession Through History >
image=”http://static.businessinsider.com/image/4f0de51d6bb3f7c60c00000d”
caption=””
credit=””
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]
[/slideshow]