by Associated Press
http://sports.espn.go.com/mlb/news/story?id=3881057
This article is a follow-up on one of my previous blogs (eCommerce Blog Week 1). Back in 2006, the New York Mets and financially troubled Citigroup signed a $400 million naming rights deal for the Mets new stadium set to open in April. Since, Citigroup Inc. has received $45 billion in federal bailout aid and late last year said it planned to cut 53,000 jobs worldwide. Thus, causing scrutiny from politicians, whom signed the federal bailout for the the banking industry, saying that they are spending their money unwisely.
The Mets argument is that Citigroup signed a legal binding agreement and they are fully committed to their contract. With this being said, Citigroup has came out and said that they are going to continue with their stadium naming rights deal.
Though Citigroup has said that they do not plan on using any part of their $45 billion federal bailout aid towards the $400 million stadium naming rights deal, I feel that this is not a good move for Citigroup during these trouble times in our economy.
But, Citigroup should not be highlighted when other corporations who are also receiving billions of dollars in federal funds are spending money on sponsorships. Bank of America, another recipient of $45 billion in federal bailout aid pays $7 million a year for Bank of America Stadium, home to football's Caroline Panthers, and has been negotiating with the New York Yankees for a $20 million marketing deal that would not include stadium naming rights.
Companies buy stadium naming rights because they are good business and not just because executives like to see their corporate names on 15-foot signs. Naming rights deals have been a very profitable platform. Only time will tell if this will help out the banking industry.
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