Citigroup’s $400 million naming rights deal for the new New York Mets ballpark has gotten the attention of members of Congress. After all, the banking giant is receiving $45 billion in federal bailout money through the government’s Troubled Asset Relief Program (TARP). It agreed in 2006 to spend about $20 million a year for 20 years to name the new stadium.
Last week, U.S. Reps. Dennis Kucinich, Democrat of Ohio, and Ted Poe, Republican of Texas, asked Treasury Secretary Timothy Geithner to push Citi to drop the deal. “Citigroup is now dependent on the support of the federal government for its survival as an institution,” the representatives’ letter said. “As such, we do not believe Citigroup ought to spend $400 million to name a stadium at the same time that they accept over $350 billion in taxpayer support and guarantees.”
When word surfaced the company might be looking for a way out of the giant stadium name deal, it reiterated Tuesday that it is committed to the legally binding deal and that no TARP money would be used on the Citi Field agreement.
But the question remains: should companies that receive federal bailouts be putting big money into these types of naming rights deals?
The question arose after Sept. 11, 2001, when the airline industry was laying off workers and seeking federal help, and yet several stadiums and arenas, including AmericanAirlines Arena in Miami, bore the names of air carriers.
The conventional wisdom from the business community tends to be that in difficult times, companies should be spending a portion of their budgets on advertising, since that’s when they need it most.
Do you agree?
New Dolphins owner Stephen M. Ross completed a deal valued at $1.1 billion to buy the team and Dolphin Stadium last week, even as he has joined a group of real estate developers asking for federal assistance in the struggling economy.
According to Richard Sandomir’s column in today’s New York Times, several financial institutions with their names atop sports venues are receiving TARP dollars. Among them: Bank of America, which pays $7 million annually for its name on the Carolina Panthers football stadium is receiving $45 billion; JP Morgan Chase, which pays $2.2 million a year to name the Arizona Diamondbacks’ Chase Field is receiving $25 billion; PNC Financial, which pays $1.5 million a year for the Pittsburgh Pirates PNC Park name is getting $7.6 billion.
Sandomir’s column quotes a Treasury official saying the department did not have the authority to command a bank to discontinue a naming rights deal. But Kucinich told Sandomir that TARP allows “broad changes.”
What do you think?