It’s a tough time for banks looking to garner a little name recognition. In one corner, we have Congress criticizing Citibank and the Mets over the stadium naming rights deal. In the other corner, we have columnists questioning Bank of America’s plan to sponsor the Yanks.
With the scrutiny on TARP and the general state of the economy, it is of course unsurprisingly to hear so many voices slam the banks. I just wonder if it’s the smartest policy. Rick Rothacker, financial columnist for Bank of America’s hometown Charlotte Observer, wonders if the beleaguered bank and long-time MLB sponsor should keep up the sports visibility. He writes:
[Bank spokesman Joe] Goode said Bank of America treats sponsorships as a business proposition rather than a mere marketing exercise. “We partner with profitable sports franchises that yield significant revenue streams for the bank,” he said. For example, the bank offers team-related products to consumers, makes loans to sports teams and offers wealth management services to players and owners. The Yankees debit and credit cards are among the bank’s most popular “affinity products,” he said…
“This is exactly the kind of thing taxpayers are fed up paying for,” said Stephen Lerner, assistant to the president at the Service Employees International Union, a frequent critic of the bank.
Banks that have taken taxpayer money, particularly ones such as Bank of America that have “double-dipped,” need to show they are being good stewards of taxpayer money, said Steve Ellis, vice president at Taxpayers for Common Sense, a nonpartisan government watchdog group. Bank of America received $20 billion this month to help shore up its Merrill Lynch & Co acquisition, adding to $25 billion it had received earlier.
This raises some interesting sponsor-related questions, and as the Super Bowl ads are sure to be toned down this year, I wonder if that’s a good thing for our economy. Taxpayers are wont to complain if their money isn’t being spent wisely, but who is to say that investment in advertising and sponsorship isn’t a wise one?
Ideally, Bank of America and Citibank spend money on these deals because the returns pay off. Bank of American will draw in so many more customers and so many more investment dollars by plastering its name across the new Yankee Stadium just as Citibank will with the Mets.
As the economy attempts to straighten itself out, more and more of these stories will pop up, and the populist sentiment will be outrage. But it’s all part of the economy. Banks invest in sponsorships because it draws in customers while filling the coffers of other organizations. To pare down rational advertising just because the government is responsible for the bank portfolio is a knee-jerk reaction best left to closer analysis.