A DEAL is a deal is a deal. But in these current economic times, there are plenty of companies attempting to disprove that theory.
Today’s edition of the Wall Street Journal reports that Citigroup Inc. is exploring the possibility of pulling out of its $400 million marketing deal with the New York Mets.
Those of you who have driven through Flushing will have already seen the Citi Field sign perched on top of the Mets’ new stadium.
It was back in November, 2006, that Citigroup and the Mets announced a 20-year marketing and business partnership that included naming rights for the stadium, which opens in April.
Of course, back then, no one knew of the troubled times ahead for America’s financial institutions. Or, if they did, no one was doing anything about it.
Now, little more than two years on, Citigroup is in disarray and relying on government bailout money for its survival.
Which leads me to the $400 million question: Is it morally right that they should be allowed to financially support the Mets, and should the Mets be allowed to enforce the contract?
A Citigroup spokesman today insisted that no TARP [Troubled Asset Relief Program] money will be used for Citi Field or for marketing purposes.
Perhaps not directly, but how can that really be true when Citibank has already received a $25 billion rescue package from the U.S. Treasury Department?
Why Citigroup must back out of 20-year deal
Two congressmen – Dennis Kucinich (D-Ohio) and Ted Poe (R-Texas) – have written to Treasury Secretary Timothy Geithner urging him to push Citigroup to dissolve their deal with the Mets.
It may not be quite that simple. There are likely to be penalty clauses within the contract and David Howard, the Mets’ vice president for business affairs, is quoted as saying: “Citi are our partners and both side are going to live up to the agreement.
“Superficially, I understand the public’s reaction. But the reality is the TARP recipients were companies the federal government thought were vital to our economy. To continue doing business, they still need to advertise.”
A point well made and one that brings up a much wider issue. How much should companies relying on bailout money cut back on their advertising and marketing budgets?
The fact that certain baseball clubs, particularly the two in New York, continue to hand out multi-million dollar contracts like confetti, is hardly going to endear them to members of the public who are neither Mets nor Yankees fans.
Both clubs have relied heavily on taxpayers’ money to build their new stadiums. The Yankees have even had the cheek to ask for – and receive more – in the form of tax-exempt bonds after spending $423.5 million on signing three new players this winter.
There has already been public outrage over the bonuses paid to Merrill Lynch executives from bailout money and the CEO who spent $1,405 on a trashcan.
It’s high time Barack Obama and the White House got tough with the banks and told them to pull the plug on non-essential spending.
Unfortunately for the Mets, that should include naming rights for sports stadiums and Taxpayer Field.