Walmart's New Health Food Push: Is It Too Hard to Swallow?
Bonds Are a 'Safe' Investment: A Big Lie Gets Even Bigger
Last July I suggested that Citigroup (NYSE: C) should cancel its $400 million deal to put its name on the new New York Mets stadium. Although previous CEO Chuck Prince inked the 20-year deal, I called for it to be canceled after Citi posted $17 billion in losses for the first half of 2008. Not surprisingly, it took more than my blog post to push Citi to cancel the $400 million deal.
After getting $45 billion in government bailout cash and another $305 billion in loan guarantees; and canceling the delivery of a $50 million corporate jet, it comes as no surprise that Citi is beginning to realize that times have changed. But as I suggested last July, there is a rich history of companies naming stadiums after themselves and soon ceasing to exist. For instance, there used to be a stadium in Houston named after a little energy trading firm you may have heard of -- Enron.
Now it looks like Citi is trying to pull out of the deal but the Mets are not going to let Citi get out of it that easily. But perhaps, Citi is just going through the motions. A Citigroup spokesman said that Citi "signed a legally binding agreement with the New York Mets in 2006." Jay Horwitz, a Mets spokesman, told Reuters, "The Mets are fully committed to our contract with Citi."
I don't know how this little mess will be resolved but two things are clear. First, naming a stadium after a company is a colossal act of management ego that hardly ever pays off and often provides investors with an early warning signal. Second, if you had shorted Citi at $19.35 back in July when I wrote that post and covered today at $3.65, you would have made a 430% return on your investment.Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College. His eighth book is You Can't Order Change: Lessons from Jim McNerney's Turnaround at Boeing. He owns Citi stock.
Goldman Earnings Sink After Buffett Dividend
Johnson & Johnson's Income Falls 23%
Burberry Shares Leap on Sales Update
Reader Comments (Page 1 of 1)
2-03-2009 @ 9:28AM
ceo0797 said...
My small business has been dead in the water since September thanks to the hijinks of these overpaid moneymen.
We need to take the assets of these bad banks and auction them off to the good banks who don't need bailouts.
We need to fire the entire executive staff at the bad banks
We need them to stop NOW naming stadiums after themselves
We need to stop NOW the bonuses these pigs are taking
We need to stop NOW their advertising and marketing. Look at the LA Times and Wall Street Journal the last two days. Who has money to buy FULL PAGE ADS in these newspapers? Citibank and B of A, with OUR money.
We need to have the government oversee the bad loans of the bad banks, rework them and then sell them to the good banks.
Bottom line...the Good Banks an Good People have suffered while the BAD banks have continued to live high on the hog.
2-03-2009 @ 10:01AM
orlandofe said...
People are losing their jobs, their houses are being foreclosed, their 401's aree shrinking and citi bank is paying millions to put their name on the mets stadium after receiving taxpaye r funded bailouts. This is crazy. The mets just signed a pitcher for 12 million a year , this is despicable in the current financial climate, where do you think the money came from, it came from the taxpzyers. And domn't forget if your cable bill went up its effected by these athletes gig salaries.
2-03-2009 @ 10:16AM
DAVEdetroit said...
I Can Not Find ANY Good reason Why CITI Should Pay this RIDICULOUS PRICE, For Branding This Stadium, Except To Put Their Name In Front Of NYC, But the Cost Is Paid For, By All Cities, Of Tax Payers, Across the USA.
I Also Suspect, If CITI Pulls Out--They Will Not Be Able To GIVE AWAY That Branding, away.
Citi, And the METS--Want To Stick It To the Tax Payer--Again.
EMIL J KOVACH JEj
2-03-2009 @ 10:31AM
Dan Barnett said...
Remember "PSI Net Stadium" in Baltimore? That dotcom went dotbust.
2-12-2009 @ 1:41PM
JohnCHICAGO said...
With our country near a depression and the local NY congressmen (5 to date) who have "demanded" that Citi honor this deal...where has common sense gone.
When will our "leaders" get that you cannot spend more than you make...let alone it being OUR TAX PAYER MONEY that is going to be paying for a private advertisement. Oh, to those who say "well, the Mets won't let them out of it"...I say...hello anti-trust rules to Major League Baseball. Maybe they WILL get it. A family of 4 going to an MLB game will set you back $300. I make a great living...I work 7 days a week but I will not park my ass anywhere near Wrigley Field or Comiskey (sorry...US Cellular Field) Park. PUT YOUR COUNTRY FIRST...YOUR CHILDREN FIRST...YOUR GRANDCHILDREN FIRST...WE ARE BLOWING OUR FUTURE on waste. Please NY State citizens, call you congressmen and tell them to put you first...not the Mets. If that doesn't work...don't go to their games...and VOTE THESE POLITICIANS OUT OF OFFICE...IT IS "OUR COUNTRY"...ISN'T IT?