Is this name on the new Mets stadium going to be
pulled before it opens?
Banking giant Citigroup, Inc. (NYSE: C) is looking to back out of its record $400 million naming rights deal with the New York Mets, citing controversy in the midst of asking for federal bailout money.
The Wall St. Journal reports that no final decision has been made by Citi at this time.
Citigroup said Monday that it has no plans to use Troubled Asset Relief Program, or TARP monies toward the naming rights for the new Mets stadium set to open this year, but pressure from the federal government may edge Citi toward dissolving the deal with the Mets.
The news comes as Citi has had total net losses of $28.5 billion since 2007, and received $45 billion in bailout aid from the federal TARP program last fall. They also have come under pressure from politicians, most recently “Reps. Dennis Kucinich (D., Ohio) and Ted Poe (R., Texas) who wrote to Treasury Secretary Timothy Geithner on Wednesday, asking him to push Citigroup to dissolve the Mets deal.”
The naming rights deal with the Mets is the most lucrative in all of U.S. sports. The agreement reached in 2006 before the bottom dropped out of the markets, is for 20-years, and $20 million annually. The record naming rights deal has a provision by which the parties can extend the deal for up to 35 years.
The agreement between Citi and the Mets is worth $100 million more than the next highest naming rights deal. That agreement is between Reliant Energy and the NFL’s Houston Texans for $300 million.
Since November, when Citi announced the layoffs of 53,000 workers, the Mets have maintained that the naming deal with the banking giant has been safe. Now, the government may quash the deal. The legal implications are not yet known as it has oft been repeated that the naming deal was "contractually binding." As noted prior, backing out of the deal is not as easy as it seems.
Maury Brown is the Founder and President of the Business of Sports Network, which includes The Biz of Baseball, The Biz of Football, The Biz of Basketball and The Biz of Hockey. He is contributor to Baseball Prospectus, and is available as a freelance writer. Brown's full bio is here. He looks forward to your comments via email and can be contacted through the Business of Sports Network.
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