Wednesday, February 4, 2009

46. Citigroup

46. Citigroup

$50 million corporate jet? $400 million stadium naming rights deal? Really, Citigroup? Really? For a company that would have completely folded, a la Lehman Brothers, Citigroup seems to still think it is the leading bank in the world. It took hundreds of columnists and TV anchors discussing the stupidity of buying a corporate jet when facing bankruptcy for Citigroup to realize the purchase might not be the wisest decision. Are the people there that dense? Learn to use the phone or teleconference. Let’s put this into an everyday context: Let’s say a friend of yours said he was going broke and if you didn’t help him out with a loan his family would starve as would other people who depend on him for employment and money. So because you are a do-gooder always looking out for others, you decide to lend him some money to help him and his dependents out during these tough times. You overhear this friend a week later talking about the Porsche he has his sights on and is going to buy that weekend. Now, would that make you very happy? Probablyyyyyyy not.

Maybe Vikram and crew figured $50 million would go unnoticed since they have been given so much and no one is going to comb through their every purchase. Fine, be na├»ve and think the government won’t check up on their investment. But when you are about to pay $400 million over 20 years to brand your name on a stadium for the New York Mets, I’m prettyyyyy sure the government will not miss that one. I understand that if you want to work your way back to profitability you are going to have to do some marketing to nab rich investors and other customers. But is the best usage of $20 million in marketing dollars each year to put your name on a stadium in Queens, New York? I think it might be a bit wiser to market on television and print, which is quite a bit cheaper and reaches a broader audience. Citi could have paid for about 7 Super Bowl commercials with that kind of dough. And they would have reached over a hundred million Americans, rather than the bums who are venturing to see New York’s second class franchise play in Queens. Also, this deal eerily reminds me of another great financial institution that decided to go the route of naming a stadium, a little company called Enron. I mean it worked out well for them, so why not? If you asked a group of individuals throughout the world which they think is more well-known, the New York Mets or Citigroup, my money is that Citi would win. The Mets are a second-tier franchise in baseball, whereas Citi has been one of the leading financial institutions for many years. I don’t think Citi needs to link themselves up with the Mets, unless they want to advertise to the world that they are a second-rate bank…

I know I am not the only way saying all of this, but I think of Citi like an alcoholic, the more time the alchy is told he has a problem, the more likely he is to seek help and stop the drinking. Citi is like a alcoholic, stoner, meth-head and glue sniffer all tied up in one. Get a clue Viky and either stop the excessive spending or find yourself a new company to run into the ground.