Tuesday, November 25, 2008

Bailed Out Corporations Still Spending Millions on Sports

 
Despite billions in taxpayer handouts...uh, bailouts from the (averted gaze) Socialist government, Citibank and AIG will continue to flush down millions of dollars on big sports naming rights, logo placements, and sponsorships.

Citi, which recently axed 53,000 workers (you wouldn't know it from its gigantic "We're Hiring" sign on its building along Rt. 40 in Burlington, NC), and saw its stock price lose over half its value, is in a 20-year contract to pay the New York Mets $400 million to name the team's new stadium "Citi Field." And insurance giant AIG is paying the British soccer team Manchester United $125 million for the privilege of having its logo appear on Man U's uniforms. That, despite the fact the firm is standing largely thanks to a $150 billion lifeline from the U.S. Treasury.

From ABC News online:
"A spokesman for AIG confirmed that its sponsorship deal with Manchester United remains in place, but that the company is 'reviewing all sponsorships to identify any relationship that might be essential, to maintain the value of the business and service customers, so we can repay the [government] loan.'

Citicorp is not reviewing its deal with the Mets, chief financial officer Gary Crittenden said in an interview Monday. Crittenden told CNBC the contract was 'legal and binding' and 'not an issue.'"


Eeeexcellent!

This kind of business model warms the cockles of my almost lifeless, Mr. Burns-like heart. It's good to know these corporations are at least consistent in their awful decision-making processes and by now we've pretty much read the umpteenth version of the script, so we know how it's all going to end. Might as well leave the theatre now and skip out on the denouement in favour of a hefty pint at your nearest pub. Drowning your sorrows is de rigueur at HolidayTime.

And this brings to the table the issue of a bailout for the auto industry and what kind of decisions the Big 3 would make, given a hefty 25, 35, howevermany billions. As you well know, I am vehemently opposed to the rescue package, knowing full well that over 2.7 million jobs potentially stand to be lost (jobs that could be filled given the invention and inception of new technology for fuel-less, non-electric cars). But just last week I spoke with a colleague---a Michigan transplant and a former GM employee---whose father and grandfather are retired from a lifetime of work for the auto giants, and whose various uncles and cousins are still lucky enough to have jobs within the industry. She and her family are unequivocally against this rescue package, fully realizing that auto industry CEOs will mis-spend the loan and "regular blue collar people" (her words) will lose their jobs eventually, as GM, Ford, and the rest of them will move their operations overseas (see GM's new SUV plant just opened in St. Petersburg, Russia).

Just common sense from a family who would be impacted directly by the failure of the industry and who recognizes the bailout as merely a band-aid to a fatal, hemorrhaging wound.

4 comments:

Janet said...

Unfortunately, my parents have already folded their car lot and sent their employees along their merry way.
1) Ford treats small dealers like ca-ca encased in the groves of their spats and I would not miss their un-inventive, selfish present one bit. For all this nonsense about Republicans supporting small business, Ford small dealers have been slowing suffocating under the franchise's fees for decades.
2)Because, yes, employing humans who demand a living wage is more expensive than, say, Russian or Indian labor.
3)Which in turn insinuates that they will not be creating jobs here that would boost the economy and therefore
4)They are not to government's prerogative.

Excellent postage here mate.

momentofchoice said...

so the only way a corporation can get business (and pay back the loan) is by placing their logo in every place possible? it would be nice if they gave human beings some credit. i hope with decisions like this, they lose all their customers. but instead? as a friend once half-jokingly suggested, they'll come up with a way to tattoo their logo on the inside of our eyelids.

i have a teeny bit of hope that Obama will not allow a bailout without a decent plan presented of what changes the auto industry will make to be more sustainable, which includes evolving to stop making the environmental crisis worse.

let's not forget either (unless recent news on this proves me wrong) electric cars are not a bad thing if they are charged with solar...whatever, anything that relies on clean, renewable energy.

B.E. Earl said...

I used to wonder how corporations could afford to shell out that kind of money for what appeared to me to be simply advertising. But the truth is the nature of the financial partnership is much more complex than that. These banks may actually wind up making money on the deals.

sleepyjer said...

Earl-
I would think the ATM fees generated at Citi Field (to which I assume Citygroup would have exclusive rights) would make a big dent in the $20 million a year, but how would AIG make money?