While the naming rights to the new Mets stadium has captured much of the public's attention about the deal between the team and Citigroup, the truth is that it's actually a full-fledged marketing deal. The name of the stadium is included and important, but of more importance to the bank is the rights to all retail banking and credit card transactions over the 20-year span of the deal.
The idea is that the deal is profitable for publicity and for the bank's bottom line. The publicity part is what's getting the Mets and Citi into all kinds of hot water with Congress. If the stadium were called Jackie Robinson Field and Citi merely had signage and the retail banking rights, they may have been able to skate by without raising a ruckus.
That's certainly what the Yankees were hoping, but it may be more difficult now that news of their negotiations with Bank of America have hit the papers. Both Newsday and the New York Times reported on Wednesday that the two sides were close to finishing their own sponsorship deal, and Newsday is reporting that the annual cost is in the same neighborhood as the Citi/Mets deal. A Bank of America spokesman would only say that talks with the Yankees were ongoing.
This news sheds some light on the wide swath of marketing deals that troubled banks have with sports teams. PNC Bank's name is on the Pittsburgh baseball stadium, Chase Field is the home of the Diamonbacks and Bank of America already spends $7 million a year to have their name associated with the Carolina Panthers. PNC, Chase and Bank of America received, respectively, $7.6 billion, $25 billion and $45 billion through the government's Troubled Asset Relief Program.
The problem, then, is widespread. Along with all of the other problems, like $50 million airplanes and expensive retreats, it illustrates the need to figure out exactly how our governement is going to regulate the banks rather than just get uppity every time they do something as egregious as spending $400 million to do business with a baseball team.