Tuesday, March 10, 2009

Is a U.S. Government bailout paying for Barclays Center naming rights?

The Wall Street Journal on Saturday broke the news that, last fall, the U.S. government's bailout of American International Group IAIG) benefited some two dozen U.S. and foreign financial institutions, among them Barclays Capital.

Yesterday, Ward Harkavy of the Village Voice's Smart Asset blog made the connection: It turns out that while the U.K. conglomerate was getting a share of the bailout money, it recommitted last November its deal to pay $400 million to the New Jersey/Brooklyn Nets for naming rights to the Center in Brooklyn.

It's not clear to me what percentage of the $50 billion was distributed to Barclays, but if it was distributed evenly, that would be some $4 billion.

What is clear is that Barclays, as well as other beneficiaries, isn't commenting on the Journal's report.

Money is fungible

The money was not directly funneled into the arena naming rights. But if money's fungible, and last time I checked it was, whatever benefit Barclays gained could be redirected to other ventures. (And, as DDDB notes, Barclays will benefit from a bailout from the U.K. government.)

Maybe that's why Nets CEO Brett Yormark was always so confident Barclays would stick with the deal.

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