Citigroup’s Naming Rights Deal Debate Carries On
Will they or won’t they? Citigroup announced a $20 million naming rights deal for the new New York Mets ballpark well before it received a $45 billion of federal bailout money and another $300 billion in loan guarantees. And some U.S. Representatives want new Treasury Secretary Timothy Geithner to intervene and have the deal dissolve.
Last we heard, too, is that Mets fans and the local New York government are also not too thrilled with the deal. And Citigroup is reportedly looking to find a loophole so it can back out of the agreement.
What do you think? Should the Mets allow Citigroup to back out of the deal? Should the government get involved? And are naming rights deals all that they’re cracked up to be?
February 3rd, 2009 at 3:34 pm
Having negotiated a few of these deals, I believe that more often than not, the sponsor does not get their money’s worth. The deal typically provides logo exposure for companies that don’t need it, but little opportunity for messaging that can truly extend a company’s brand. Often these deals are driven either by ego, or by the sales department who likes the entertainment value of the suites and tickets, and access to celebrities, but don’t really comprehend the marketing ROI. Once companies get into these deals, they typically find they don’t have the necessary budgets to leverage them appropriately. Like buying tickets to the Prom, and forgetting to arrange a date until its too late.
For these deals to make any sense, I believe that companies need to do comprehensive leveraging plans and budgeting before they begin negotiating. They need to examine exactly what their advertising, promotion and sales events will likely produce in terms of results, and compare that to what they would spend in other areas to achieve these results.
The deals that have worked did so because the sponsors knew what they were going to do ahead of time and were able to negotiate all the rights and assets up front that they would need to execute their plans.