(Reuters) - Citigroup Inc is exploring the possibility of backing out of a nearly $400 million marketing deal with the New York Mets amid concerns over how lenders are using government bailout money, the Wall Street Journal said, citing people familiar with the matter.
Officials at Citigroup have made no final decision about whether to try to void the 20-year agreement, which includes naming the Mets’ new baseball stadium after the bank, the people told the paper.
The Mets deal was attacked last week as an example of misplaced spending by financial institutions that needed bailout funds, according to the paper.
A Citigroup spokesman in New York told Reuters on Tuesday that “no TARP (Troubled Asset Relief Program) capital will be used for Citi Field or for marketing purposes.”
Members of the U.S. House of Representatives Dennis Kucinich and Ted Poe wrote to Treasury Secretary Timothy Geithner last Wednesday, asking him to push Citigroup to dissolve the Mets deal, the paper said.
“Citigroup is now dependent on the support of the federal government for its survival as an institution,” the paper quoted the letter as saying. “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.”
If Citigroup backs out of its agreement with the Mets, it likely would not happen immediately and could involve the bank paying a break-up penalty to the Mets, the paper said, citing people familiar with the situation.
Citigroup “signed a legally binding agreement with the New York Mets in 2006,” the Citigroup spokesman in New York told Reuters.
“The Mets are fully committed to our contract with Citi,” Mets spokesman Jay Horwitz told the Journal.
The New York Mets could not be immediately reached for comment by Reuters.
Reporting by Ajay Kamalakaran in Bangalore; Editing by John Stonestreet and Hans Peters