The Wall Street Journal is reporting that troubled financial giant Citigroup is considering pulling out of their $400 million marketing deal with the Mets. The deal includes the naming rights to the stadium opening this April, which was to be called Citi Field.
The news comes on the heels of last Wednesday's letter from Congressmen Dennis Kucinich and Ted Poe to Treasury Secretary Timothy Geithner. The letter asked Geithner to dissolve the deal as part of the government's agreement to provide Citigroup with more than $350 billion as part of the Troubled Asset Relief Program. On Monday, Citigroup said none of the TARP money would be used for the stadium, but that's splitting hairs to the extreme.
The public's been told time and again that the banks are evil and that spending money on a stadium marketing deal is bad. Citigroup could (and should) argue that having the rights to process every credit card transaction at Mets games for the next 20 years, and whatever other banking operations go on, can be profitable.
Really, what's more damaging, the Citigroup/Mets deal or the government's continual demonizing of banks whose future is intertwined with the economic health of our country? That's the thing about easy targets, they tend not to bring much return on the back end.
As for the Mets, the last thing they need is the loss of $20 million a year in revenue. Someone else will step up and play sponsor, but not for the same amount of money. The Wilpons have been adamant that their losses in the Bernard Madoff Ponzi scheme won't affect the Mets, but at some point things will catch up with them. Teams rely on these sponsorship deals for direct revenue and, as Yankee blog River Ave. Blues pointed out on Monday, broadcasters pay their rights fees with their help.
With belts being tightened everywhere, the loss of these funds could have a profound impact on the sports world. The Citigroup deal is the highest profile one, but it probably won't be the last one that goes sour in the coming months and years.
UPDATE: CNBC is reporting that Citigroup denies any talk of a pullout. Citigroup told the cable channel that they "signed a legally binding agreement with the New York Mets in 2006. No TARP capital will be used for Citi Field or for marketing purposes."
Additionally, the Mets told CNBC on Tuesday that "Citi reinforced that they will honor our legally binding agreement."