A swing and a miss for Citigroup
It has not been a banner week for Citigroup. Tens of billions in losses, a wave of layoffs and a disgraced management regime. But as we've come to expect by now, Washington has come to the rescue again with a controversial deal to provide fresh capital and massive loan backing. Citi, in turn, has agreed to some regulations on dividends and executive pay.
The company seems confident about making a comeback—so optimistic, in fact, that it’s holding onto a $400-million, two-year contract to hang its name over the new Mets stadium.
That may seem a piddling sum compared to the vast financial mess on Wall Street, but the ballfield deal symbolizes the kind of imperious risk-taking that helped bring down the too-big-to-fail crew.
Newsday’s Anthony Rieber sees something of a curse in the naming-rights game:
“…maybe naming-rights deals really are good business. Maybe Citi Field will become a shining beacon of sports/business synergy, just like Enron Field and Bank One Ballpark and Pacific Bell Park and SBC Park and Ameriquest Field and Edison International Field and Network Associates Coliseum and McAfee Coliseum.“All of those are past names of current baseball stadiums. Some have been renamed more than once.
“The naming-rights deals either changed hands when the parent companies were sold or merged, or the deals were not renewed for one reason or another, or the deal went belly-up when the company went kaput and took all of its employees with it.
“That one was Enron Field in Houston, now Minute Maid Park. Good thing people still drink orange juice.
“We're not saying Citigroup is going to go the way of Enron, but wouldn't that $400 million help even a little? Maybe the Citigroup spokesman and some of the 52,000 could have kept their jobs?”
Corporate America’s excesses—from sports sponsorships to Capitol-bound private jets—seem even more outrageous against the backdrop of the economic meltdown. But critics of the government's mushrooming bailouts worry officials are ignoring past lessons and paving the way to more recklessness. It's hard not to notice intricate links between Obama’s economic advisory team and former Treasury Secretary Robert Rubin, a champion of deregulation and CitiGroup insider.
To its credit, Citigroup has recently been trying harder to live within its means—by cutting back on color photocopies at its offices, for instance.
In case scaling down the next Staples order fails to restore investor confidence, Slate’s Daniel Gross suggests more radical measures, including a deeper cut on dividends. But every little bit helps:
“Citi should ground corporate jets and instead send execs on the Acela train or the Chinatown Bus ($35 round-trip) when they go to Washington to talk with their new stakeholders. The best option for taxpayer-financed travel: a Joad-style flatbed (American-made) truck.”
As for the stadium, Gross says the company’s new partnership with the Treasury might require some adjustments, like "Paulson Park at Citi Field or the Ben Bernanke Bullpen.”
To honor the public-private teamwork behind the bailout, Steve Ellis of the watchdog group Taxpayers for Common Sense says, “They should put 'US Treasury' on the front of their uniforms.”
Perhaps not the kind of branding the company had in mind when it originally signed the deal. But however the naming rights play out, Mets fans, along with all other taxpayers, will be living with the legacy of Citigroup’s rise and fall for years to come.
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Comments (2)
You know what's really going on here: We have to bail out the saudi prince [the largest owner of citi]. The poor thing has been decimated by the fall in oil prices.
They should name the stadium Taxpayer Field or how about the novel idea of "Metropolitan Stadium?", after all, aren't the Mets the New York Metropolitans?