So it seems like everyone is angry that Citi is still going through its 20-year, $400 million naming rights deal with the New York Mets while the company has received $45 billion in TARP money. After multiple reports of a possible severance, the Mets have come firing back, basically saying it's a legally binding contract.
Here are my thoughts on the issue:
1. Naming rights deals, for the most part, aren't the greatest use of sports marketing funds. Dollar for dollar, we think there are better things to spend on.
2. That being said, banks — like every sector of business — have to market themselves. And banks especially have to market themselves because they are rather undifferentiated. To give the folks at Citi the TARP money and then say that they can't market their retail banking operation actually doesn't make much sense.
3. Several politicians think the Mets should help Citi get out of this deal. I don't. Good for the Mets for getting Citi to sign the largest deal in naming rights history. If the contract is signed, they deserve to receive every penny — even if it's controversial money.
4. It is not rational to think the contract can just be dissolved, so if we want to talk breakup fee, let's get started. Given the fact that the Mets likely can't get $150 million for the same deal today, you'd have to think that Citi would have to pay at least $150 million to terminate the deal. Is that what people want? That instead of getting something for $400 million, they get nothing for $150 million? That's a bigger waste than the deal that exists now.
5. If the Mets want to work with the folks at Citi, I like the idea suggested by Slate's Daniel Gross. That is, to extend the deal to 30 or 40 years, so that the per annum cost is lessened. Why would the Mets do this? Because if the stadium is called Citi Field for 20 years, there's not much value to a new company coming in 2029. Add to this the fact that the average life of a stadium seems to be about 25-30 years and this could actually make sense and quiet the critics a bit.
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