Its called Contracts.
BUSINESS
The TARP Teams
Almost $700 million in stadium naming-rights cash comes from companies on the government dole.
PHOTOS
Who Is To Blame?
There are plenty of people who contributed to the sad state of our economy. But when it comes to bad decision making, these seven folks arguably deserve the bulk of the blame. (Want to add to this hall of shame? Follow the e-mail link at the end of this gallery.)
Apr 17, 2009 | Updated: 10:58 a.m. ET Apr 17, 2009
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Wasn't it just yesterday that no one thought anything of a pro sports venue slapping the name of a big bank or auto company over its door? Purists cringed a little, but they got used to it.
Those days are over. The credit crisis that has banks, automakers and at least one huge insurer, AIG, going hat-in-hand to the government brought new scrutiny to naming rights and sponsorship deals with sports franchises.
That most sports business experts call the sponsorship arrangements smart marketing doesn't matter to critics. Some simply see the grandiose world of pro sports as an inappropriate place for a struggling, publicly assisted firm to be mingling in. It's like the guy who lost his job keeping the company limo for trips to the unemployment office.
Citigroup and Bank of America took a combined $60 billion in government TARP funds to stay afloat. They owe the New York Mets and Carolina Panthers, respectively, a total of $512 million over the next 20 years. It's "become a big issue in this kind of environment," says Patrick Rishe, a Webster State professor who specializes in sports business.
By our count, there are nine major pro sports venues in the U.S. (plus Vancouver, Canada) that will rake in a collective $694 million over the next 25 years from corporations that are now on the public dole. Not included: a beleaguered airline industry that received more than $4 billion in government loan guarantees shortly after the terrorist attacks of Sept. 11, 2001.
Others include JPMorgan Chase (Arizona Diamondbacks), Comerica (Detroit Tigers), Wachovia (Philadelphia Flyers and 76ers, through its parent, Wells Fargo, and M&T Bank (Baltimore Ravens).
Another financial player, Raymond James, which has $26 million left to pay on its deal with the Tampa Bay Buccaneers through 2015, has applied for TARP funds but hasn't collected. A spokeswoman says it's still far from certain whether Raymond James will take the funds if they're approved. Reps from other banks on the list either declined comment or didn't return calls.
Among domestic automakers, Ford Motor, (its name adorns the Detroit Lions stadium) isn't taking public money, at least not yet. But General Motors, which has received $13.4 billion in public assistance, has an $844,000 annual naming rights deal north of the border with the Vancouver Canucks.
Despite the outrage on the part of some politicians over big-bucks sports sponsorships, don't look for the government to intervene anytime soon. While the Treasury Department has supported restrictions on executive compensation and luxury perks for companies dipping into the public till, it doesn't favor getting involved in marketing spending decisions, according to a spokeswoman. Maybe they realize financial firms will have to keep selling themselves to customers if the public ever wants to get its money back.
The good news for the Mets, Panthers and all the other teams with bank names on the door: It's your partners' images that are at risk of taking a hit, not yours. While a sponsor's objective in a stadium rights deal is exposure and association with the uplifting aura of Americans at play, a team's goal is the cash.
"No one is going to blame the Mets for taking the money," Riche says. "If anything, fans see the money as a way of keeping up with the Joneses and staying competitive for players."
© 2009
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