Naming a stadium: Good marketing or a waste?

updated 6:18 p.m. ET Feb. 4, 2009

NEW YORK - When the economy was healthy, no one batted an eye at Citigroup Inc.'s agreement to spend millions of dollars to put its name on the New York Mets' new stadium.

But in a recession that has seen the bank accept $45 billion in government bailout money, the move is viewed by some lawmakers as an example of lavish spending — akin to millions of dollars spent on corporate jets.

Business experts say advertising and other marketing efforts are not luxuries at all. To the contrary, they say, strong marketing strategies are even more important in tough economic times.

According to Mark Peroff, an intellectual property attorney at Hiscock & Barclay in New York, a stadium deal is "probably the most economical way to advertise because of the number of people that you capture."

The question, though, is how appropriate the deal is now that the landscape has drastically changed.

"You have to have the right tone. People in these times have very sensitive ears," said Don Sexton, a professor of marketing at Columbia Business School and a principal at the The Arrow Group Ltd., a marketing consulting firm. "Perceptions rule."

Citigroup's contract with the Mets is the biggest stadium naming rights deal ever. The bank is paying the team $400 million over 20 years to call the ballpark Citi Field. Citigroup is not alone — another bank operating with the help of government capital, Bank of America Corp., is reportedly paying $7 million a year for naming rights to the Carolina Panthers stadium.

Bank of America spokesman Joe Goode said a bank's team sponsorships aren't just marketing tools, but also business relationships. BofA does sports-themed bank and card accounts for consumers, as well as financial services for the teams, he said. He estimated that every dollar spent on the company's sports-related deals generates $10 in revenue and $3 in income.

Sexton said, however, that from a branding perspective, there's no hard data to prove how effective stadium naming rights are for financial services firms.

"I have not seen that putting a name on a field elevates your brand," Sexton said. "The basic idea of a brand is not that they know your name, but what your name stands for."

Citigroup has been a well-known bank for years. Its image, however, along with many companies in the financial services industry, has been sullied as the financial crisis throttled the economy. The company reported five straight quarters of losses, got a rescue package from the government, eliminated 75,000 jobs and got heavy play in the headlines for its plans to buy a $50 million corporate jet — which it soon scrapped after the government cried foul.

William Madway, marketing instructor at Villanova School of Business, agreed there is little data to show the efficacy of stadium deals. But, he says, the Citi Field deal could be very lucrative as long as the bank takes advantage of what the deal represents: supporting the great American pastime, for example, or riffing off the Mets' reputation as an underdog team that has made some great comebacks.

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