That's not enough for Rep. Cummings. "I strongly urge Citigroup to find a way out of this contract and instead spend that $400 million on retaining its employees and restoring confidence in its operations," he said.
AIG and Citibank are just two examples Taxpayers for Common Sense cites of institutions who are taking federal money with one hand, and paying hefty sums to sports sponsorships and naming deals with the other. Many are banks which are not perceived as financially faltering, who have taken money from the Treasury's Troubled Assets Relief Program (TARP) to boost their anemic lending.
Bank of America (TARP take: $25 billion) is reportedly poised to ink a $20 million-a-year sponsorship with the New York Yankees – a team that is hardly hurting for cash. They are already in a reported 20-year, $140 million deal with the Carolina Panthers football team to call the team's arena "Bank of America Stadium."
Bank of America spokesman Joseph Goode said his bank's deal with the Panthers is making the bank money. "Any investments we make in sponsorship marketing are directly linked to driving revenue growth for the bank," he said, noting the deal also allowed Bank of America to market debit cards with the Panthers logo. He would not comment on the reported pending deal with the Yankees.
Even before the crisis, some marketers believed the naming and sponsor deals were idiotic. "It's pretty clear that it's a complete and utter waste of money, ego-driven," said Seth Godin, a marketing guru and bestselling author.
It's time for banks to re-evaluate these deals, says Ellis. U.S. taxpayers ponied up billions to these to lend because they wouldn't do it with their own money, said Ellis. But now, "Just as Americans all over the country are having to decide, 'what am I going to do without?' companies are going to have to make those decisions," he said.
"At the end of the day, they've got to look at the taxpayers and say, 'Yeah, we'll take your money and spend some of our assets on [naming] a stadium, or a college bowl,'" said Ellis. "That's a hard sell to the public, obviously."
Who else is taking public support while holding pricey naming deals? It's not a short list. Among the biggest:
PNC Bank ($7.7 billion in TARP funds pledged) is locked in a 20-year, $30 million deal to keep the home of the Pittsburgh Pirates named "PNC Park." A spokesman there said the bank did not use TARP funds to make payments on the deal.
J.P. Morgan Chase ($25 billion from TARP) has a 30-year, $66 million contract for the Arizona Diamondbacks to call their stadium "Chase Field." "That was an agreement that was signed 11 years ago," by a bank that was bought by Chase, said bank spokesman Tom Kelley. "Tell me what 2008 has to do with 1997? That's a contractual obligation."
Comerica ($2.3 billion in TARP funds pledged) has an identical deal with the Detroit Tigers to refer to their home field as "Comerica Park." Both expire in 2028. "From our perspective, they're not connected," said Comerica's Wayne Mielke of the stadium deal and the bank's anticipated receipt of bailout funds. "Why should it be reviewed?" The cost of the naming rights, said Mielke, "does not inhibit our ability to lend."