Houston Astros and Enron - Assignment Example

As a prominent sports team with a large fan base, it is a force to be reckoned with in the sports of American baseball which is perhaps the most popular team sports in the United States and also a major part of the American culture as a pastime when families bond together. When its sponsor Enron Corporation suddenly collapsed back in 2001, the Houston Astros found themselves in the embarrassing position of being endorsed by an organization which symbolized corporate greed. It is the aim of this brief paper to examine the options available to the said sports team and as an illustrative case study on how to properly handle a seemingly public relations disaster.

Discussion Professional sports today in America and elsewhere in the world is characterized by the increasing intrusion of commercialization through corporate sponsorship in the form of company advertisements and marketing promotions. American sports organizations are privately-owned teams and as such has to be managed well like any business enterprise and has to turn a profit for its owners. In this regard, many of such sports organizations have turned to corporate sponsors to earn much-needed additional revenues to offset higher expenses in the form of maintenance of its home stadium and to pay the often-exorbitant professional players' fees.

In other words, the sports team owners are in a quandary of sorts, as they have to sacrifice the purity or sanctity of sports in favor of commercial ads to make their sports teams a viable on-going enterprise. There is a prevalent practice of selling the naming rights of a stadium to a corporation for a huge fee. Problem Definition – in the case of the Houston Astros, they had sold the naming rights for their new ball park to Enron Corporation for a 30-year period to the tune of $100 million and in turn, Enron was given all the rights to put up advertisements, banners, and all sorts of the paid endorsements accruing to the Houston Astros sports team, such as the opportunity to put Enron's name on all interior and exterior signages to include even the uniforms of game-day staff.

A part of the deal included spending for a luxury suite and season box seats (Jensen & Butler, 2007, p. 28). When Enron collapsed, the sports team had to find a way to dissociate themselves from it. Case Analysis – the sudden collapse was an unprecedented event in American business history for it was the largest bankruptcy filing ever and worse, Enron represented the corporate scandal involving dubious accounting practices, insider trading, and other types of malfeasance. The Houston Astros found themselves in the uncomfortable position of being associated with the company most hated by Americans who lost their jobs, pensions, and life savings.

Evaluation of Case Facts – the naming rights that Enron Corporation entered into with the management of the Houston Astros was a valid business contract but the extremely bad name or reputation that Enron soon earned after its collapse when sordid wrongdoing came to public knowledge made it untenable for the sports team to continue with the contract because it is now a public relations crises in relation to its valued publics, in particular its avid sports fans. Consideration of Alternatives – Houston Astros has to find a way to get out of the now-useless contract with Enron as the corporation is in no position to honor its end of the bargain in terms of annual installment payment for the naming rights of the stadium.

The sports team has to resort to the courts to discharge it from its obligations