Citi's $400 Million Deal With Mets Stadium: Will It Stand?
First of all, thank you to all the people who chipped in over these past two weeks, especially my producer Tom Rotunno and my blog editor Mark Koba who ran the show, so that I could have a real vacation. Now, let's get cracking.
The New York Mets theme song for the 2009 season is "We built this Citi." The question is whether the Citi will stand.
Questions about whether the humungous 20-year, $400 million naming rights deal that the bank agreed to two years ago for the new Mets stadium would stand up, began when the global financial crisis started. Then the 53,000 jobs cut at Citi, the second largest single job cuts in terms of volume in history. And last night, the government injecting $20 billion into Citigroup.
Sure, the $20 million a year is a drop in the bucket, but the important point to make here is that the folks at Citi are at least behaving as if the Mets made this contract so locked up, that they couldn't get out of it no matter what the financial situation was.
"You know, those (naming rights) decisions were made in a different time and a different place and we have a legal and binding agreement around that and so I never heard it discussed," Citi's CFO Gary Crittenden told Erin Burnett on our "Squawk on the Street" this morning. "I don't think it's an issue."
As far as the Mets are concerned, good for them. No other company, in this environment, would give them $20 million a year. I don't even think they could get $12 million at this point, to be frank. As far as Citi is concerned, it's definitely going to be uncomfortable.
Whether it's rational or not, they're going to hear people asking how many employees they could have had back for that $20 million annual investment. The right question to ask, and I don't know the answer to this is, what's a better investment for the company, the people you could have working for those dollars or the naming rights to the stadium?
Things of course get doubly uncomfortable now that it's taxpayer dollars on the line. No one expects that AIG sponsorship of Manchester United to stick now that the government is involved. Sure, the AIG bailout is much bigger, but that doesn't take away from the fact that a high profile sports sponsorship doesn't seem as necessary as it once did.
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