When Citigroup (“Citi”) announced its unprecedented $400 million dollar deal for naming rights to the new Mets Stadium in late 2006, sports marketing experts assumed that Citi was breaking new ground in naming rights deals for sports venues. Shortly after Citi announced its deal for “Citi Field,” British banking giant Barclays agreed to pay a reported $400 million dollars over twenty years for naming rights to the future home of the New Jersey Nets, and experts predicted that companies would offer even more for the naming rights to the new Cowboys and Giants stadiums.
In recent weeks, however, Citi has accepted $45 billion dollars in funding from the Troubled Asset Relief Program (“TARP”). As a result, Citi’s deal with the Mets has undergone intense scrutiny, with certain members of Congress proclaiming that Citi should be forced to back out of its deal with the Mets. Although there is some visceral appeal to that position, requiring Citi to back out of its deal would have far-reaching financial implications for the entire sports industry and would raise complex legal issues under the Contracts Clause and the Takings Clause of the United States Constitution.
The following article by Ben Mulcahy and Gina Reif Ilardi was originally published in Sports Litigation Alert. To read the article please click here, or visit the Sports Litigation Alert website.