Mets, Citi remain firm about deal
Banking giant says it won't back out of naming rights agreement
NEW YORK -- In the wake of a published report that Citigroup was "exploring the possibility of backing out" of its $400 million marketing agreement with the Mets, the struggling banking giant and the club issued statements on Tuesday that indicated the deal remains in place.
The Mets responded to the report in the Wall Street Journal, saying, "In conversations this morning, Citi reinforced that it will honor our legally binding agreement."
Citi's statement covered essentially the same territory, saying, "Citi signed a legally binding agreement with the New York Mets in 2006."
The Journal published a report quoting unnamed people familiar with the matter as saying that Citigroup has made no final decision about trying to back out of the agreement.
The report noted Citi had received $45 billion in a federal bailout late last year. The bank said that none of the bailout money would be directed to the Mets for Citi Field, the club's new home scheduled to open in April.
Citigroup's contract with the Mets calls for the bank to pay the club about $20 million annually for 20 years.
The Journal characterized Citi as "eager to quell the controversy over how lenders are using government bailout money." In a statement to the newspaper on Monday, Citi said no government funds from the Troubled Asset Relief Program will be used for the stadium. But, the paper said, as Citi "revisits the pact," it is "essentially acknowledging that the volatile political climate could make it untenable for the bank to proceed with the deal."
The paper reported if Citi was able to back out of the deal with the Mets, it likely wouldn't happen immediately and that it could involve the bank paying a breakup penalty to the Mets.
The Journal said Citi's re-examination of the Mets' deal followed President Obama's criticism of Wall Street firms that paid billions of dollars in bonuses, even as Washington was spending taxpayer dollars to help bail them out. The paper reported the Treasury Department hadn't pressured the bank to break the contract.
The Citi-Mets agreement has been under some scrutiny since it was announced last year that Citigroup was to receive $25 billion, and then an additional $20 billion from the federal government. Two members of Congress suggested last week that Citigroup should drop its $400 million deal with the Mets, and local politicians have issued similar statements in recent months.
Citigroup had suffered net losses of $28.5 billion since 2007. The government also agreed to shoulder most losses on a $301 billion pool of Citigroup's loans and other assets, the Journal said. It also reported Citigroup chief executive Vikram Pandit and other bank CEOs are set to appear before a House committee next week to explain their use of taxpayer-funded capital through TARP.
The Mets' deal was attacked last week as an example of misplaced spending by financial institutions that needed bailout funds. The Journal's report noted that Reps. Dennis Kucinich (Ohio) and Ted Poe (Texas) wrote to Treasury Secretary Timothy Geithner on Wednesday, asking him to push Citigroup to dissolve the Mets deal: "Citigroup is now dependent on the support of the federal government for its survival as an institution," the letter said.
"As such, we do not believe Citigroup ought to spend $400 million to name a stadium at the same time that they accept over $350 billion in taxpayer support and guarantees."
Marty Noble is a reporter for MLB.com. This story was not subject to the approval of Major League Baseball or its clubs.