Twice Cursed: Spain's Banks and Houston's Soccer Stadium
(Corrects date of European Banking Authority statement in third paragraph.)
The world's eyes, including those of the Bloomberg View editorial board, are on Spain and whether it will reach for a European Union bailout to rescue its fragile banking system. Should this come to pass, it will show once again that the dreaded stadium curse is alive and well.
The Houston Dynamo, a Major League Soccer team, today held a ribbon-cutting ceremony for its new $95 million, 22,000-seat venue: BBVA Compass Stadium. That's BBVA, as in the U.S. subsidiary of Banco Bilbao Vizcaya Argentaria S.A., one of Spain's largest banks.
The company in December agreed to pay $20 million over 10 years for the stadium's naming rights. The deal was struck the same month that the European Banking Authority said that BBVA had a capital shortfall of 6.3 billion euros ($8.3 billion) as of Sept. 30.
The stadium curse is legendary. Citigroup Inc., for instance, bought the naming rights to the New York Mets' baseball stadium, Citi Field, in 2006, two years before getting its first round of federal bailout funds. In 2000, the New England Patriots' football stadium was known as CMGI Field, named for an Internet company that soon went bust.
BBVA's new stadium is in downtown Houston -- near the Houston Astros' baseball park, formerly known as Enron Field. So the curse's most notorious example is literally just down the street. (Enron Corp., the failed energy trader, filed for bankruptcy in 2002 after an epic accounting scandal. The Field Formerly Known as Enron is now called Minute Maid Park.)
The new stadium is only the latest foray into sports marketing for BBVA. In July 2010 the company became the "official bank" of the National Basketball Association. BBVA sponsors Liga de Futbol Profesional, Spain's professional soccer league. There's also the BBVA Compass Bowl in Birmingham, Alabama, which annually pits mediocre college football teams against each other. The company even has referred to itself as "the bank of sports," as if this were a good thing.
Off the field, the future seems less happy. As today's Bloomberg View editorial noted, the Spanish unemployment rate is 24.4 percent. Yields on Spanish 10-year bonds recently hit 6 percent. Standard & Poor's just downgraded the government's credit rating, as well as its ratings for 11 Spanish banks. One of those banks was BBVA, which had its rating cut to BBB+ from A. An EU bailout is starting to look inevitable.
One of the hard parts, of course, would be explaining to European taxpayers why they should help pay for plastering BBVA's name on a new soccer stadium in Texas. For what it's worth, the Dynamo's home opener, against DC United, is May 12.