By Mike Steffanos
Sorry. I know I promised to get back to regular posting now that the election is over, and I still intend to keep that promise. It's just that I have been really busy with a work project this month. Things are starting to loosen up a little, so I should be posting more often going forward. Here is a quick thought before I sit down for my turkey.
It's funny how much is being made of the naming rights deal with Citigroup, given the institution's latest woes. While I don't discount the impact of all the layoffs and the cost of yet another taxpayer bailout, if you didn't already know any better some of what you read and hear would lead you to believe the entire $400 million is coming out of the bailout money rather being paid out over a 20 year period. That's just the kind of oversimplification and overhype that drives our news coverage these days.
More troubling, I think, is that there are going to be quite a few Mets fans in the local area that fall victim to Citigroup's massive cost cutting layoffs. This, as much as the actual bailout, is what lends an air of unseemliness to the naming rights swag. I honestly don't know how hard it would be to rework that deal, but I would certainly give it a shot if I owned the club. However, I suspect the Mets ownership will try to lay low and hope that the story doesn't survive for more than a news cycle or two.
The Mets and Citigroup would be smart to rework their deal, lower the current payment and make more of the contract payable later on. While they are under no legal obligation to do so, it would diminish all of the negative publicity they are receiving on this. Sometimes the smart thing is to bow to reality and get ahead of the story, but the Mets and Wilpons have never been all that smart in this regard.
Still, some people are hyping this thing as some sort of fraud perpetrated on the American public. This was a business deal signed, sealed and delivered during the happier economic climate two years ago. A contract has been signed and, as homeowners struggling to pay their home mortgages know, contracts carry obligations in both good times and bad. Those in the media who profess to believe that Citigroup can turn around and say "thanks, but no thanks" to the naming rights deal are either startlingly uninformed or (more likely) playing fast and loose with facts to score some dubious political points.
Maury Brown has a great editorial on The Biz of Baseball that avoids the hype and explores the reality of the deal. Brown points out the real world consequences of Citigroup reneging:
The Mets would certainly sue Citigroup if they attempted to back out of the deal. Trying to find a corporation to pick up the naming rights would be tough, but reaching $400 million would be a near impossible feat given the sour state of the economy.
From the Mets' perspective, why should they be punished? As the saying goes, "A deal's a deal."
Citi, ergo the taxpayers, would wind up footing the bill for a legal battle. A source close to the Mets reports that the deal with Citi allows for little wiggle room for Citi to back out.
"It's binding. There's little doubt that Citigroup would have difficulty walking away from the deal."
And therein lies the problem.
In the often up-is-down world of business, Citi may be saying, "We can pay $20 million a year, and get some face time with the name Citi Field. Or, we can pay for a legal battle that we could easily lose, and wind up paying for most of the agreement anyway, without the benefits."
While, as already stated, I believe the Mets and Citigroup would do well from a p.r. standpoint to attempt to restructure the deal and backload more of the money, they certainly aren't do anything illegal or unethical if they don't. That's a fact, even if you get that from the media hype machine.
No one questions the right of any business to buy the naming rights of a stadium, particularly in a big city like New York where there are benefits to that kind of constant exposure. The problem is how much of that is being paid out while Citi Bank is relying on the kindness of taxpayers to stay afloat. That is almost undoubtedly going to be a very small percentage of that $400 million total. If Citi doesn't have their act together in a year or two they will follow the Passenger Pigeon into extinction and those naming rights will be moot.
Happy Thanksgiving, everyone.