WSJ: Luxury Strikes Out

"In a case of monumentally bad timing, this year three of the biggest names in pro sports -- the [New York] Yankees, New York Mets and Dallas Cowboys -- are opening three of the most expensive stadiums ever built, filled with premium-priced seats and luxury amenities. At a combined cost of more than $3.5 billion, the stadiums were conceived and financed in a vastly different environment, a time when corporations and municipalities were flush with cash. Now they're opening just as corporate America is going through a massive belt-tightening -- and trying to avoid the appearance of extravagance at all costs."

8 months ago JoshNY 23 comments 0 recs |

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The WSJ comes at this from their own, financially-focused angle, of course, which is their prerogative. It’s sort of the other side of the coin from that Village Voice article linked earlier this week. What caught my eye, though, was this little nugget:

Citigroup, which has received billions of dollars of federal aid, has been forced to defend its $400 million marketing deal with the Mets that includes the right to name the park Citi Field. The Mets have endured weeks of jokes about renaming their field “Taxpayer Stadium” or “Bailout Park,” but the deal with Citigroup looks safe for now. A Citigroup spokesman says no taxpayer money will be used for the marketing deal.

What bullshit. Money is fungible. $400M in “non-taxpayer money” given to the Mets is $400M more “taxpayer money” that Citi needs to pay for something else because that “non-taxpayer money” went to the Mets. It’s astonishing to me that the WSJ didn’t mention that, but I guess they know where their bread is buttered.

by JoshNY on Mar 13, 2009 3:04 PM EDT reply actions 0 recs

say it ain't so

It’s like all the lottery money that’s “dedicated for schools” but really just replaces money that used to be in the common budget, but is now earmarked for “fact-finding” trips to Bermuda and subsidies for foie gras and yacht wax.

by hotspur on Mar 13, 2009 3:55 PM EDT up reply actions 0 recs

Devil's Advocate

Let’s be clear that Citi Corp isn’t just giving the Mets $400 million over twenty years. Just because Citi Corp is getting federal bailout money doesn’t mean they should cease business operations, one facet of which is surely marketing and advertising. They are going to get some return on their advertising investment; whether it’ll be $20 million a year remains to be seen, but it’s going to be something considerably more than nothing.

by Eric Simon on Mar 13, 2009 3:56 PM EDT up reply actions 0 recs

I certainly agree

that Citi shouldn’t be stopping spending money on marketing because of the situation they’re in, although I’m not sure exactly who it is that’s not presently using Citi for financial services but will be persuaded to do so because their name and logo are all over a baseball stadium. However, that’s my personal skepticism about the value of marketing/advertising in general in view of the extent to which our daily lives are saturated with it.

In any case, the fact remains that money is fungible and the implication that taxpayer money is, somehow, categorically different than the money being used to pay for the naming rights is laughable. If you ask me, they’d be better off saying something along the lines of what you said (“If Citi is going to regain profitability in the future, we need to market ourselves, and the naming rights are a big part of that”) rather than what they did say, especially in the WSFJ.

by JoshNY on Mar 13, 2009 4:22 PM EDT up reply actions 0 recs

Naming

I suspect someone has run studies on brand recognition and stadium naming and has concluded that pouring millions into this sort of thing is a smart marketing decision. It’s not about seeing Citi Field and concluding that Citi must be a great place to put your money, but rather about getting the name out there (see: Absolut Vodka, any cigarette company) so that when someone does decide to invest in a bank/vodka/cigarette that the name recognition begins to pay dividends.

by Eric Simon on Mar 13, 2009 4:39 PM EDT up reply actions 0 recs

Presumably someone has

but it was probably a marketing consulting firm that wanted to justify the money they make by being a middle-man on these deals. Yes, obviously getting your name out there is important, but at this point, who hasn’t heard of Citi? I have to guess there’s a point of diminishing returns on money spent to get your name out there.

by JoshNY on Mar 13, 2009 5:38 PM EDT up reply actions 0 recs

Advertising

First of all, CitiCorp isn’t paying 20 million dollars just to get its name out there. There are cheaper ways to do that. What they’re actually paying for is getting their name out and cognitive identification. Citi doesn’t care about having its name said with more frequency, but having that name identified differently. By pairing it with the stadium, suddenly “Citi” is operating on different neural pathways for thousands of people; CitiBank is now identified not just with the Bank, but the Mets franchise, New York City, and any other events that may be held there. Believe it or not, your brain will start responding to the Citi logo and name differently than it did in the past, and the positive associations that CitiBank will gain from the deal does have a value that shouldn’t be flatly disregarded.

(This is also not to say that banking decisions will be made solely upon advertising. They won’t be, but the aim of advertising is to give a company an edge in a competitive market.)

Now, is that deal worth $20 million per year? Probably not, but in my opinion it’s not so cut and dry where I’d call a company grossly irresponsible for agreeing to it.

by Alex Nelson on Mar 13, 2009 7:22 PM EDT up reply actions 0 recs

I'm in the same camp as Josh

Exactly! Who hasn’t heard of Citi? I would love for someone to provide me with an explanation of how the name/logo makes me or any other consumer want to use their product. I’ll use the product because of what it can do for me and what value it has.

CITI is in a pretty bad light at this point. The vast majority of Americans are sick to death of the big banks in general because there is no confidence in them whatsoever. Very few believe in banks, the people who manage them and the services they provide.

CITI can have their name and logo plasterede everywhere. Me? I’m going to ignore it. I’m so desensitized to the whole disgusting philosophy behind advertising. When commercials come on t.v. or the radio, I turn the channel.

The world needs more Jon Stewarts!

" (Stewie) Wait a minute. Germany is building WMD's? Then, why doesn't America go in there and kick their a$$e$? (Brian) I don't know. Maybe it's because they don't have any oil? (Stewie) Ohhhhhhh. Clap, clap, clap, clap, claaaaap. "

by LOUtheMETandNATSfan on Mar 13, 2009 8:16 PM EDT up reply actions 0 recs

hmm

I’ll admit I wasn’t entirely aware of what you’re saying here, blackfish.

by JoshNY on Mar 14, 2009 11:28 AM EDT up reply actions 0 recs

read Daniel Gross's take

Here it is in Slate. It’s not unreasonable.

We've got ourselves a ball club, the Mets of New York town!

by kingcritical on Mar 14, 2009 1:41 AM EDT up reply actions 0 recs

let's not forget

that citibank is paying $20 million per year, assuming they didn’t pay all $400 million upfront (which would be stupid). so it’s unlikely that taxpayer money will pay for much of the marketing deal between citibank and the mets…i doubt the government will still be giving money to citibank in 2011.

by englishgrey on Mar 14, 2009 12:21 PM EDT up reply actions 0 recs

I go to the bank that's has the closest branch/atm to both my apartment and my law school

I don’t give a crap that they sponsor stadiums in my least favorite city, and I wouldn’t give a crap if they sponsored stadiums in New York. If I move and Wachovia is no longer convenient, and Bo Jackson’s bank is the closest, I’ll join and start using that one, even if they never name a stadium after him (though at this point, what do the Raiders or Royals have to lose, right?)

I don’t know, I think this whole “naming rights” boom is kinda ridiculous. But, then, I’ve never been tricked into believing that some Nigerian warlord was trying to leave me $12M.USD (TWELVE MILLION US DOLLARS) in an account, which apparently a lot of people have, so what do I know…

by cjmulrain on Mar 14, 2009 1:01 AM EDT reply actions 0 recs

Except here's the thing

You’re assuming the goal of advertising is to force you to buy an obviously inferior product. That’s not necessarily true, because let’s face it: most of the time you’re not, no matter what. Advertising chiefly seeks to persuade you into choosing one of two or more comparable products.

I live in a town with a lot of banks. I mean, within three or four blocks of each other I have a Roslyn Savings Bank, Chase, North Fork, and Bank of America. If I go in the opposite direction, I can find an HSBC and a TD Bank that aren’t much further. And you know what? There are two banks are even closer than any of these: a First National (directly across from my house!) and a Dime Savings Bank (right around the corner!). For the most part, there’s little difference between going to any of them, and I actually use the one that’s furthest away.

Why? I suppose interest rate might matter to some people, though in my case it didn’t make a difference. I don’t believe I shopped around any. To be 100% honest, I have no clue why I chose my bank. None. I should probably change it, but switching banks is a hassle. The simple fact of the matter is that there’s always an irrational aspect to human buying behavior, something that becomes more prevalent when there’s little to no difference among products. Advertising, through simple classical conditioning, seeks to prey on that.

by Alex Nelson on Mar 14, 2009 2:19 AM EDT up reply actions 0 recs

Interesting.

Perhaps the ~~SHITI~~ CITI logo at CITI field should have a scrolling ticker below it displaying the interest rates on different investment options available with CITI. There’s a ticker on nearly every damn thing these days. Has anyone seen Fox News lately? (No, I don’t choose to watch their broadcast, but at work there may not be a choice) 1/3 of the picture is of the actual person speaking and the rest of the screen is filled with financial data, upcoming stories and some other superfluous bullcrap. How the hell is a person supposed to pay attention to all of that? Who is in charge of the brain trust that put that together?

by LOUtheMETandNATSfan on Mar 14, 2009 2:32 AM EDT up reply actions 0 recs

There were stock tickers shown in between innings at Shea

I wouldn’t be surprised if there are at New Shea too

by JoshNY on Mar 14, 2009 11:33 AM EDT up reply actions 0 recs

I don't know

For me, the choice was simple. There are two banks next to my law school. One of them has a branch 2 blocks from my apartment, the other one doesn’t have a branch within a mile of my apartment. There are other banks near the Wachovia I use, but they don’t have branches near my school. Case closed, simple decision. Had I been working at the time, I might have chosen a different bank, b/c there’s no Wachovia’s near my office. Obviously, different people have different motivations for choosing certain banks (interest rates are probably a big one, maybe they know someone who works for a certain bank, etc.), and maybe some people choose based on name recognition b/c their favorite teams stadium is named after that bank. But, to be completely honest, I think right now I am far less likely to choose Citi Bank in the future b/c I hate corporate sponsorships and this one in particular has been seriously bungled by both sides. I’m sure I’m not the only person who feels that way. I just think it’s not worth the money they’re spending on it, which is fine if it was completely their money, but since it’s at some level our money, it rubs me the wrong way.

by cjmulrain on Mar 14, 2009 3:40 AM EDT up reply actions 0 recs

wachovia sucks balls

i suggest you move closer to a better bank

Pedro offers you his protection.

by pj on Mar 14, 2009 8:13 AM EDT up reply actions 0 recs

I've been making my decisions the same way

When I was in law school and lived in Manhattan, I primarily used Citi because they had a branch really close to the school and an ATM really close to my old apartment. At this point I’m using Bank of America much more often because they have a branch in the same building as my office and an ATM on my way to the subway from my apartment. I dunno if this is the best way to make that determination, of course, but it is a way and you’re not the only one who’s decided that way.

by JoshNY on Mar 14, 2009 11:32 AM EDT up reply actions 0 recs

when you're in law school and have no money

convenience is really the only factor to consider in choosing a bank. unfortunately, i go to school in boston where every damn bank is a bank of america. i can’t wait to switch to something else when i move back to ny.

by englishgrey on Mar 14, 2009 12:15 PM EDT up reply actions 0 recs