Sunday, April 12, 2009

Secret Sponsors

Here's another example of the fact that we've crossed the line.

used to sponsor a PGA tour stop in Charlotte NC. (Don't tell anybody but they still do.) Wachovia got into some trouble with some loans and Wells Fargo bought the company, a move that was cheered and maybe encouraged by the Fed. That's the same Fed that loaned Wells Fargo $25 billion under the TARP program. TARP recipients aren't allowed to have birthday parties, talk loudly in the hallways or use the elevators to travel fewer than 3 floors.

"(T)his is now a tournament where mentioning the title sponsor is banned. Wells Fargo? Forbidden words around Quail Hollow Club. So is Wachovia, the Charlotte-based bank whose logo, colors and name used to adorn nearly everything around the club during tournament week.
The sponsorship deal...had been extended through 2014 just last spring. The original plan was to continue calling it the Wachovia Championship. Wells Fargo, which has received $25 billion in government aid, feared a (TARP-related) backlash, so early last week the bank came to tournament officials with an odd request just two months before the first golfer was to tee off: We'll still pay to be the title sponsor, but can you take the bank out of the tournament name?"

Wells Fargo is paying for the sponsorship but demanding that it get no publicity. Not exactly how most people would run a business. I don't really need to hear about taxpayers bailing out Wells Fargo either. That $25 billion amounts to a loan at 5% and given the beauty of a quarter that Wells printed this week, that money will be repaid ahead of schedule.

As an aside, let me point out that the much-maligned Fed is borrowing money at less than 2% and lending it to a company it has guaranteeed will not go busto at 5%. That's almost a better business model than Coinstar.

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