Citigroup Inc. may buckle to political pressure and cancel its advertising agreement with the New York Mets, according to media reports. Last week, Congressmen Dennis Kucinich, D-Ohio, and Ted Poe, R-Texas, urged Treasury Secretary Tim Geithner to force Citigroup, which has taken $45 billion in capital from Treasury's Troubled Asset Relief Program, to remove its name from the new home of the baseball team. While earlier calls for the beleaguered bank to cancel plans to take possession of a $50 million French-made corporate jet made sense -- given the firm already has a fleet of two other planes and similar demands were placed on the automakers -- this
latest call goes too far.
Continue reading below
Citi has committed to pay $400 million over 20 years for the naming rights to the stadium, which amounts to $20 million a year in advertising costs. Now, if the $20 million is divided over the approximate 80 games the Mets will play at the park, then Citi is paying only $250,000 a game to plaster its name not only on the park's facade, but all over the stadium. It really doesn't seem all that excessive given the number of mentions the field will get in a day on national TV (Sports Center, Baseball Tonight, etc), or how many times a Citi logo will appear during a televised game. In fact, it seems a rather cost-effective advertising deal when compared with what Citi might pay for a 30-second advertising spot on, say, Fox's Saturday afternoon baseball broadcasts.
Instead, if Kucinich and Poe are looking for something "excessive" in the realm of advertising and sports, they should turn their attention away from Citi and focus on Bank of America Corp.'s deal with the NFL's Carolina Panthers. As I wrote last year:
At face value, Citi appears to be paying a princely sum that exceeds everyone else. But that's at face value. In fact, Bank of America is paying more for the rights to place its name on the Carolina Panthers' home. The Charlotte, N.C.-based bank reportedly pays $7 million a year for naming rights for the NFL-affiliated stadium, and when you consider the per game price, Bank of America is paying almost 4 times what Citi is paying thanks to the NFL's regular season 16 games compared to MLB's 162 games. Sure, if you factor in some of the concerts that Bank of America Field may host, that Citi Field is unlikely to match, the price comes down a bit, but at the end of the day, Bank of America is paying more. So where are the questions about BofA's wisdom?
The truth is these deals are simply about advertising, but politicians looking to score points with their constituents are turning these agreements into cases of corporate vanity and greed. While many restrictions were put on the car companies -- like demands for the end of corporate jets -- when receiving their government bailout, no one ordered them to stop advertising -- including the removal of their stadium naming rights. Similarly, airlines, which plaster their name on stadiums as frequently as banks, were never told to stop when they received a post-9/11 bailout. So do we really expect the banks to stop advertising?
Maybe we should ask Kucinich, Poe and the rest of Congress to stop advertising too if they take government matching fees when it comes time for re-election. - Matthew Wurtzel
See an opposing view from Dealscape
See earlier post on the topic from Dealscape
