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What To Do When You’ve Got $400 Million Laying Around

Why not blow it all on naming rights for the NY Mets ballpark?

That’s what Citibank is doing. $20 million a year for 20 years.

That’s $400 million. For a sponsorship.

Think about it. 95% of all credit unions in America don’t even have that much in assets.

Citibank’s annual marketing budget is only $500 million (you’re saying “Onllllyy…”). They’ll be pumping 4% of it into the name of one ballpark in one market. And we aren’t even talking about the Yankees here. We’re talking about the Mets.

Alas, if Citibank knew then what it knows now.

You see, it was back in November 2006 when they signed the deal, and they had just ended their third quarter with net income of $5.3 billion. Yes, that’s with a “B.” Billion.

But those were the subprime days…

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According to the NY Times, Citibank has lost $17 billion (again, with a B) in the last nine months – including a $2.5 billion loss last Friday.

During that time, the company has cut about 28,000 jobs. Backing out of this deal could have saved how many jobs?

But Citibank isn’t flinching. A Citi spokesman says they remain “strongly committed” to the sponsorship. Dave Howard, the Mets EVP/Ops, backs that up, saying that Citi hasn’t expressed any jitters.

Relatively Speaking: Too bad the Oakland Athletics couldn’t get $400 million from Cisco for the naming rights for their new ballbark. If they had got a $400 million sponsorship deal for Cisco Field (scheduled to open in 2012), that sucker would be paid for. That’s what the whole stadium cost. Instead, the Athletics got a $120 million – meager by comparison – in a deal worth $4 million a year for 30 years. That’s one-fifth of what Citi paid.

Other things that can cost you $400 million:

Via: Ron Shevlin (thanks!)

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Comments

  1. At least they didn’t dump it on a bowl game. Wait a minute, they have the Rose Bowl don’t they. Hmmm.

  2. Hi Trey. Thanks for stopping by and commenting.

    What bothers me so much about this campaign is the concentration of HUGE dollars on one market. The Mets have how many nationally televised games every year? They make national headlines how often?

    If Citi’s headquarters were located on the west coast, do you think they would have still picked Mets stadium? Is the CEO a Mets fan?

    Ugh. I shudder at the rationale that must have stunk up meetings over this sponsorship.

  3. Jeffry –

    As a credit union guy and rabid Atlanta Braves fan, all I can say is that Citi and the Mets deserve each other … ;)

  4. A little devil’s advocate (and doesn’t the devil always advocate job cuts?) …

    * In the SportsCenter age, you’ll get a couple of mentions per night on the most rabidly watched show for professional 18- to 49-year-old males. Owning the things that get talked about can make more sense than advertising on the channels where people talk.
    * Citi is more than its national retail bank. In the investment banking capital of the world they got it before it became JP Morgan Park or Morgan Stanley Stadium
    * People who want a little sports cachet are always willing to buy other crazy things: http://news.bbc.co.uk/1/hi/business/4293684.stm

  5. Mets fans everywhere are upset you consider them second-class to the Yankees.

  6. Sorry Tom. It’s not a personal thing, I promise.

    I think most people would agree that the NY Yankees are the most valuable property in Major League Baseball, so if someone pays $400 million to name anything other than the Yankees stadium then you know we haven’t even defined the high-end of the market for stadium naming rights.

    At least if Citi had paid $400 million for the Yankees stadium, the world would know that a stadium sponsorship couldn’t get any more expensive.

    I would have made the same point if any team other than the Yankees got a $400 million deal. It just probably stings a little more for Mets fans because it hits so close to home.

  7. I’ve never understood the money paid on stadium naming rights compared to the opportunity cost. Has it ever been financially justified? Or ROI calculated on it? Albeit, that would be hard, if not impossible, to quantify. Maybe it’s just a CEO ego thing.

    I’m also surprised such major spending decisions aren’t put to stockholder vote.

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