- The Washington Times - Thursday, February 19, 2009

The sports world and the financial services industry were once best buddies.

A sponsorship of a high-profile event or team was always seen as a great way for a bank or investment firm to get new customers. And from the perspective of a league or event, banks were always desirable sponsors because they paid top dollar and gave off a classy vibe.

But the list of financial firms that have been tarnished by receiving federal bailout funds, filing for bankruptcy or going through scandals is now about as long as an unabridged version of a Dostoevsky novel, leaving the sports world in the lurch as it works to replace lost sponsorships from the troubled auto industry.

The latest blow was delivered Tuesday when the Securities and Exchange Commission came down hard against the chairman of Stanford Financial Group, a Houston-based network of banks and investment firms. According to the SEC, R. Allen Stanford defrauded the company’s customers to the tune of about $8 billion by offering phony certificates of deposit with advertised rates well above the norm. (A 10 percent annual yield on a five-year CD in this economy? Yeah, that’ll draw a red flag.)

Stanford has a number of high-profile sports partners, including the NBA’s Miami Heat, English Premier League star Michael Owen and the WTA’s Sony Ericsson Open. Perhaps the most hard-hit are golf’s PGA Tour, which has used Stanford as a sponsor of the St. Jude Championship in Memphis and the LPGA Tour, which last year announced that Stanford would be the title sponsor of its tour championship. Golfer Vijay Singh recently signed a multiyear deal to promote the company.

“We have no comment regarding the situation with Allen Stanford and certain of his companies at this time,” PGA Tour commissioner Tim Finchem said in a statement. “However, we want to categorically state that the PGA Tour event in Memphis will be played as scheduled this year.”

The wording of Finchem’s reference to the June tournament is curious; he does not reaffirm Stanford’s place as title sponsor.

The LPGA also declined broad comment except to say it is monitoring the situation.

“We remain in close contact with our tournament owner of the Houston event sponsored by Stanford Financial,” LPGA spokesman David Higdon said. “And they will continue to update us on any new developments related to this matter.”

Stanford’s troubles come as bailout recipient Citibank is under fire as it enters the first year of a $400 million deal for naming rights to the New York Mets’ new stadium and as insurance giant AIG said it would not renew its sponsorship of soccer club Manchester United. Other struggling banks with sports sponsorships include Bank of America, which has the naming rights to the Carolina Panthers’ stadium, and Wachovia, which sponsors the Flyers and 76ers arena in Philadelphia.

It seems likely that the number of bank sponsors will decline in the coming years, and it would not be unprecedented for a team or league to drop a sponsor for generating bad publicity. Houston’s Enron Field, for example, was renamed Minute Maid Park after the energy firm went bankrupt amid scandal in 2001. In this economic environment, however, teams and leagues may cling to those sponsorship dollars if they can - because replacing them will be a challenge.

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