Author's note: It is not my intention to drag B/R into any political or financial loyalties by writing this article.
There has been a great deal of press given to how poor the economic situation is in this country. There have been countless stories and television reports done describing the questionable spending habits of corporations while their bottom lines continue to fade. This is not a story of economics. This is a story of a baseball team truly helping their community and, indeed, the country.
I personally take issue with CEOs taking a huge salary if a company is failing, but that's not what I'm writing about today. If companies profits fall, that happens. If stock prices come down, that happens. When people lose their jobs, I can see how that could happen as well. But if a third party can directly control the well being and potential loss of employment for a larger group of people, I firmly believe it should be done.
Right now in Washington, legislators are arguing about whether or not they should bailout the auto industry, and which banks should get how much money to cover a decade of poor decisions and rip offs. I am writing today to ask the New York Mets to perform their own bailout package.
- B/R Ticket Guide
As you can see in the photo (in this case artwork) for this story, the new stadium for the Mets is named Citi Field. It is to be a gorgeous, $600 million facility with all the bells and whistles that New York expects from its venues. A large portion of the park's construction will be paid for by tax-exempt bonds issued by the city ($444 million and change), while the city and state would be on the hook for approximately $268 million over the next 40 years. My issues isn't with how the team is financing the building of the stadium.
My issue is this: Citicorp recently announced that, because of sagging profits, they will be relieving approximately 53,000 of their jobs. And yet their name will stay on a stadium that only seats 45,000. Does anyone else see the irony in that statement? A brand new major league baseball stadium seats fewer people than the sponsor plans to fire because the company can't afford their salaries any more?
Citi is contracted to pay $20 million annually for the next 20 years to have their pretty logo on the marquee of the stadium.
My question: Could that $20 million save some, if not all, of those 53,000 jobs?
My response: I am calling on the New York Mets to provide ethics by force to Citicorp. Do not take their $20 million. Hand them their check back and implore them to do the right thing by keeping as many of those 53,000 people on board as they can. I am sure that there are dozens of companies that are financially sound enough to afford that size a contract to have their logo on the only corporately sponsored major stadium in New York.
We have enough problems in this country right now, and we have a lot of smart people trying to find ways to get jobs for millions of people in need. If a baseball team could step up to the plate and defend some people staring down the barrel of an unemployment line, isn't that what America is about?
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about 1 month ago
You have to wonder where the ethics investigations are for these companies. Let's totally throw away the (correct) idea that it's grossly inhumane. (I like my opponents to at least have a fair fight, so I'll tie the emotional appeal hand behind my back.) It's wildly irresponsible. Realistically it won't save all of those jobs, but the 20 million could easily save a significant percentage of them.
More importantly (again, purely from a business perspective) this kind of advertising crushes stock holders. Basically, this kind of advertising is just white noise, there not to sell YOUR product but to draw attention away from EVERYONE ELSE'S product. In an economic upswing, that's great. It draws interest to your service or product, and shows company strength (that you can spend X amount of dollars on almost wholly ineffective advertising and still be profitable).
However, in an economic downturn (which we've been in since the big-government liberals took back control of congress, but that's another fight for another day), it's unbelievably bad business.
That 20 million could be better used to re-invest in the company, and insure that the bank has enough money to not have to foreclose on loans. (Remember, the entire reason that foreclosures work is because banks aren't supposed to have to do them in mass quantities) Having that money available to show as profit instead of an outgoing advertising expense (for ads that garner unquantifiable results no less) not only hurts you and I, Joe Bailout Funder, but it crushes the stock price for all the investors (those who make this nation go) because the company is no longer profitable.
To expend that kind of money when your bank can't even stand (not that any of them outside JPMorgan-Chase can) on its loans and foreclosures of defaulted said loans is both insane and in poor taste.
Unfortunately, most people won't ever look at it this way. They'll take the defeatist attitude and say "There's nothing I can do, and it doesn't affect me anyway.".
Great write up.
about 1 month ago
That $20,000,000 each year would pay each of the 53,000 workers a yearly salary of $377.00. The savings by terminating 53,000 workers will be over a billion dollars per year. The 53,000 workers will be world wide, not just in the U.S. The $20,000,000 is advertising that is expected to generate revenues greater than $20,000,000.
In the business model of a multi-nation company the size of Citi, $20,000,000 would only be the value of 80 $300,000 mortgages.
I hope I have put this matter in perspective.
from about 1 month ago
It's a great sentiment, but Ken's math proves a good point. $20Mil is a drop in the bucket compared to Citi's overall operating income. The Mets could at least follow the Nets lead and offer to help those laid off find jobs.
from about 1 month ago
I appreciate your perspective, Ken.
I work for a bank.
$20,000,000 is also the equivilent 400 US Jobs at $40,000 a year + insurance/benefits.
You also realize that, with their stock price dropping daily, the net market capitalization of Citi is now lower than that of US Bancorp, the 6th largest bank in the US. Last time I checked, didn't Citi fancy itself to be among the top five or six INTERNATIONAL banks?
In this financial marketplace, how is $400,000,000 being spent ONLY IN NEW YORK CITY going to generate revenues of that sum or larger? This is a 20 year contract, for $20M annually. If they were running a national ad campaign, or improving their physical locations with that money, I could understand the expense. But to put your logo on a stadium in one location? In a city where they already have 20%+ of the market share? Has the logo of Chase on the artist formerly known as the BOB in Arizona made them a major player in that locale? And how many times a year does the opposite coast get to hear about Citi because they happen to be tuning into a Mets game? 4 times? Max?
If you worked for a company that told you they were downsizing, and then you saw their logo going up on a professional sports stadium, I'm sure you'd be thrilled and go buy season tickets to support your former employer. I thank God every day I have never worked for Citi and never will. While I appreciate you standing up for a company that continues to make aweful decisions with what's left of their capital, I'll stand by my article.
about 1 month ago
I think you have a good moral outlook on this. It would be nice to be able to help everyone losing their jobs, but the sad reality is that this is how it will be for awhile.
It is not the Mets "job" to help Citi's employees. They have to make their money because they have employees as well. Either way you look at it, that $20,000,000 is going to pay somebody no matter where it goes.
I my sound "cruel" in my way of thinking the Mets shouldn't help Citi, but I believe in the old statement "survival of the fittest." These weak companies should fall right now and the ones left standing will blossom and be stronger than ever when we rise again.
You probably think this doesn't effect me at all, but my father is losing his job when his company, Starcraft RV, Incorporated shuts down January 7, 09. He has worked there for 20 years, but neither him nor I, think it is any other companies responsibility to save Starcraft.
about 1 month ago
Let me put it this way: If you had a brother, who recently had his house foreclosed on, and he offered to take you out for a nice steak dinner because he found $50 under the couch cushions, should you do it?
I'm not saying it's the Mets responsibility to save Citi. I am saying that you are only as good as the company you keep. To that effect, how's it working out for the Texas Rangers playing in Ameriquest Field?
And the $20M that is going to pay someone's salary... is going into the pockets of Delgado, Santana, Wright, Reyes... not the "middle class."
Again, I'm not writing this article to stir up a political debate. I just wanted to encourage the Mets to keep better company than Citi.
about 1 month ago
Tab, I am not standing up for Citi. I am retired from a senior level consumer finance position at a soon to be defunct national bank and have personally lost nearly $150,000 in my nest egg thanks to the nonsense in lending and the stock market. I am just pointing out the magnitude of the problem. Remember, the only reason Chase has their name on the old BOB in Phoenix is that they took over Bank One. Bank One had the naming rights, thus it is now Chase Field. This too will happen with Citi, - the field may end up named after a Saudi Prince.
For all you know, Citi is negotiating with the Mets to get out of the contract or is seeking a replacement company to take over the contract.
about 1 month ago
Tab Bamford: Are you high?
about 1 month ago
Good article and I fully support the fact that either the Mets or Citi should do all in their power to change this however you do have to see it from their point of view (morals aside).
For a company such as Citi they probably have a board of decision-makers. And they run their company through a budget system, (ex. 30% on Ads 50 % salary 20 % expanding/loans) and when their net revenue decreases they generally just try to decrease on all of their seperate money things. So in essense unless the Mets can also convince the Board to shift the budget used on Ads to Salary all that 20million/year would do really is be used on is different advertising areas. Most top-executives in businesses are pretty greedy and will look out for their own skin first, it would be very hard to convince them to change up their entire budget. Lol i don't think I explained it well enough but I hope you get the idea, a business class professor could probably explain it much better.
about 1 month ago
It never ceases to amaze me of the naivete of people who may be otherwise intelligent and articulate! If Citicorp were allowed to withdraw their name and money from the ballpark, not one job would be saved. The 20 mil a year would probably go to top management in the form of bonuses or other perks and compensaion. The 400 million over the next 20 years will provide inmeasurable advertising and name recognition to Citicorp. Television, radio, and print media will mention their name throughout the country everytime there is a venue at the park.
The city and the Mets will benefit from the new park; and many jobs are created by a new ballpark with all the excitement and increased attendance. Believe it or not, everytime a person hears or sees a name it creates a comfort zone which makes a consumer more likely to want to deal with that business. During a recession, people need a diversion from their worries and will spend money on entertainment. Therefore, I suggest everyone chill out about how Citicorp spends their own money and we participate in supporting our favorite teams.
from about 1 month ago
I'm not alone.
http://sports.espn.go.com/mlb/news/story?id=3726892
NY City Council has heard two arguments that the field should be named Citi/Taxpayer Field.
about 1 month ago
Think about all the ATM's, credit card processing charges, etc, that they are making, by having the exclusive rights? The ATM Charges are like $3 or $4 alone at a ballpark.
ANd With the 43,000 seeing the name all the time at the park, on tv, its millions, etc....
I understand your point though. There could be a little more integrity in Pro Sports on the Advertising side.
about 1 month ago
See, while you worry about how much Citi is spending on advertising, you are really missing the big picture that actually hits most people in the united states.
Pharmaceutical companies spend more every year on advertising than they do on research. On top of that, the everyday person can't afford health care if their employer doesn't offer benefits.
This is really the least of our nations worries (talking about this article) when you look at the big picture. I understand your morals, but their are so many problems we have. One, gas prices, are finally more reasonable after years of price gouging. It all works itself out.
from about 1 month ago
I can agree with what you're saying here. I guess my frustration lies in the unquestioned acceptance we all have for the ridiculous spending habits of companies while they're firing American workers (and those abroad).
While things do tend to work themselves out, Mr. Pandit might be looking for a new job before they do at Citi.
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