The Business & Pleasure of Sports

<< Previous entry: Office Depot offering shopping spree with Tony Stewart

>> Next entry: Panthers, Nets create "Snowbird Ticket Exchange"

Should companies with naming rights deals also be getting bailouts?

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?

Categories: Advertising (79), MLB (110), Sponsorship (101), Sports Team Owners (49)

Leave a Reply


You share in the community, so we just ask that you keep things civil. Leave out the personal attacks. Do not use profanity, ethnic or racial slurs, or take shots at anyone's sexual orientation or religion. If you can't be nice, we reserve the right to remove your material and ban users who violate our Terms of Service.

About the author
CRAIG DAVIS In more than 33 years at the Sun Sentinel, Craig Davis has written about a wide variety of sports topics from baseball to yachting, fishing to triathlons, and also worked as a copy editor and page designer. Recently he reported on local sports, including running, swimming, cycling, equestrian and beach volleyball. He enjoys sports as a participant as well as a spectator, is active in the South Florida running scene plays in the curling club at Saveology Iceplex. This blog offers a glimpse at the business side of sports in the interest of enhancing enjoyment of the games and sporting options as a spectator as well as a participant.
Connect with me

Search this blog
E-mail newsletters
Get the news that matters to you delivered to your inbox. Breaking news, hurricane alerts, news from your neighborhood, and more. Click here to sign up for our newsletters. It is fast, easy and free!