The report this morning that Citi is thinking about getting out of their deal to sponsor the Mets’ new stadium is an important occurrence if it’s true. While there have been other stories of marketers trying to undo deals they’ve made within the sports industry, the Citi deal would be, by far, the biggest of these deals to fall apart.
Unlike title sponsorship of a golf tournament, this is a 20 year deal worth $400 million and while $20 million a year isn’t huge money in the scope of Citi’s finances, it’s money they don’t have right now (and, unless you and I give it to them, may not be around to have later on).
I’ve spent a big portion of my career in the sports business and I know how fragile a place it can be. To the outside it seems as if there is unlimited money to be spent on almost every property out there. On the inside, the opposite is often the case (witness the demise of the AFL, the pullback of Olympic sponsors, several NASCAR teams, etc.).
If Citi can get out of their deal, if Ginn does, in fact, get out of their golf deals, then one can almost hear every CEO being asked by their Board to explore the chances of recouping their commitments in sports regardless of what the ROI may be (cash is king!). That may be when the very fragile house of sports cards may come crashing down.
UPDATE: Mets’ statement says “In conversations this morning, Citi reinforced that they will honor our legally binding agreement.” We’ll see!