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Bank of America (NYSE: BAC) has said that it generates $10 in revenue for every $1 it invests in sports marketing, and nets $3 of that amount in income. In theory, taxpayers as shareholders should support these deals if they will enhance the company's ability to generate income.
But still: The company has broken off its talks for a long-term endorsement deal with the New York Yankees amid fallout from the market collapse and the government's bailout of the firm. Many Americans and politicians feel that it's hypocritical for companies like Bank of America and Citigroup (NYSE: C) to take billions in taxpayer cash and then spend hundreds of millions on naming rights for stadiums.
But back to the industry's claim that these deals are actually good investments: I'm extremely skeptical. How can you quantify the impact of something like a naming deal as precisely as $3 in revenue and $1 in net income. Are people who make financial decisions based on endorsement deals more likely to overdraw their checking accounts and pay overdraft fees? Yeah, probably: But do we really want TARP money being used to help Bank of America and Citi lure in naive consumers with logos plastered over baseball stadiums? I don't think so.
The revenue that banks will generate from advertising on sports arenas is likely to be of the most predatory variety. For that reason alone, we shouldn't let TARP money be used to put signs on stadiums.
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Reader Comments (Page 1 of 1)
3-02-2009 @ 1:35PM
wdmurphy said...
the vultures are circling again. whats gonna happen when no one can afford to take their families to a game. how will ur investment in naming rights look then? i suppose it really doesnt matter if u continue to get bailouts from the suckers u have been screwing for years. time our government spends some time listening to the american public and screw big business and there micro and macro economics that havegotten us in this mess
3-02-2009 @ 1:39PM
wdmurphy said...
`p.s. bank of america and citi today will be writing off 6400.00 dollars and change on my accounts . if they have so much money to pay for naming rights they sure dont need anymore from me.