Citi-group Looking to Bail Out of Deal?

Dominick DiFucciAnalyst IFebruary 3, 2009

According to NY Reuters, Citigroup is exploring breaking the $400 Million dollar marketing deal on the Mets new stadium.

Officials at Citigroup have made no final decision about whether to try to void the 20-year agreement, which includes naming the Mets' new baseball stadium after the bank, the people told the paper.

The Mets deal was attacked last week as an example of misplaced spending by financial institutions that needed bailout funds, according to the paper.

A Citigroup spokesman in New York told Reuters on Tuesday that "no TARP (Troubled Asset Relief Program) capital will be used for Citi Field or for marketing purposes."

Members of the U.S. House of Representatives, Dennis Kucinich and Ted Poe, wrote to Treasury Secretary Timothy Geithner last Wednesday, asking him to push Citigroup to dissolve the Mets deal, the paper said.

"Citigroup is now dependent on the support of the federal government for its survival as an institution," the paper quoted the letter as saying. "As such, we do not believe Citigroup ought to spend $400 million to name a stadium at the same time that they accept over $350 billion in taxpayer support and guarantees."

If Citigroup backs out of its agreement with the Mets, it's likely that would not happen immediately and could involve the bank paying a break-up penalty to the Mets, the paper said, citing people familiar with the situation.

Citigroup "signed a legally binding agreement with the New York Mets in 2006," the Citigroup spokesman in New York told Reuters.

"The Mets are fully committed to our contract with Citi," Mets spokesman Jay Horwitz told the Journal.

I still say the Mets should try and land MET-LIFE as their stadium sponsor. Get Met - It pays!