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Mets, Citigroup Say NY Naming Rights Deal Still On
The Associated Press, February 03, 2009
By Karen Matthews
Citigroup and the New York Mets said Tuesday that their $400 million naming rights deal for the team's new stadium is still on, despite a published report that Citi may be looking to back out.
The Wall Street Journal reported Tuesday that Citigroup is exploring the possibility of backing out of the 20-year marketing partnership, which includes naming the new ballpark Citi Field.
The report quoted unnamed people familiar with the matter as saying that Citigroup has made no final decision.
Citigroup, which received $45 billion in federal bailout aid last fall, said in a statement: "Citi signed a legally binding agreement with the New York Mets in 2006." The bank said that none of the bailout money would be used for Citi Field.
The Mets said in a statement, "In conversations this morning, Citi reinforced that they will honor our legally binding agreement."
Two members of Congress said last week that in light of the bailout, the Obama administration should pressure Citi and the Mets to drop the deal.
"At Citigroup, 50,000 people will lose their jobs. Yet in the boardroom of Citigroup, spending $400 million to put a name on stadium seems like a good idea," said Rep. Dennis Kucinich, an Ohio Democrat.
Kucinich and Rep. Ted Poe, a Texas Republican, made their pitch in a letter to Treasury Secretary Timothy Geithner.
Other sports marketing deals also face potential scrutiny.
Bank of America, the recipient of another $45 billion in federal bailout money, reportedly pays $7 million a year for Bank of America Stadium, home to football's Carolina Panthers, and has been negotiating with the New York Yankees for a $20 million marketing deal that would not include stadium naming rights.
Both Citi Field and the new Yankee Stadium are due to open in April at sites adjacent to the teams' old ballparks.
William Chipps, senior editor at the Chicago-based IEG Sponsorship Report, said companies buy stadium naming rights because they are good business and not just because executives like to see their corporate name on a 15-foot sign.
"Naming rights deals have been a very profitable platform," Chipps said. "The challenge is overcoming consumer perceptions that this is a throwaway."
But Anthony Sabino, a professor of law and business at St. John's University in New York, said Citigroup should back out of the Mets deal even if it has to pay a sizeable "breakup fee."
"Citi has to realize that now they are in part owned by the American taxpayer," said Sabino, who identified himself as a die-hard Mets fan. "It just doesn't look good for Citi to be firing people and yet they have the embellishment of having their name on a brand-new spanking ballpark."