What to do when you’ve got $400 million laying around
July 22, 2008
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…
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:
- Talk radio host Rush Limbaugh for 8 years
- One retirement package for the CEO of an oil company (the biggest in history)
- One campaign warchest to run for the presidency of the United States
- One super-hightech new helicopter to shuttle the next U.S. president around
(Gotta love Americans. One president, but we need 28 ‘Marine Ones?’ Why?) - Distribution rights for the Beatles entire catalog <— EDITOR’S PICK
- IT and communications infrastructure for Beijing Olympic Games
- Making Spider Man 3
- Rebuilding the I-35W bridge that collapsed in Minnesota
Via: Ron Shevlin (thanks!)
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- Batter up! Yankee stadium next for big bank sponsorship
- San Diego County Credit Union Poinsettia Bowl?
- BofA makes early grab at Olympic rings
- The Web 2.0 make/buy decision
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Filed Under: Sponsorships
July 22nd, 2008 at 11:32 am
At least they didn’t dump it on a bowl game. Wait a minute, they have the Rose Bowl don’t they. Hmmm.
July 22nd, 2008 at 11:58 am
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.
July 22nd, 2008 at 1:38 pm
Jeffry –
As a credit union guy and rabid Atlanta Braves fan, all I can say is that Citi and the Mets deserve each other …
July 23rd, 2008 at 7:18 am
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
July 25th, 2008 at 6:31 am
Mets fans everywhere are upset you consider them second-class to the Yankees.
July 25th, 2008 at 7:16 am
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.
July 29th, 2008 at 1:56 pm
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.