Next Level Sports Marketing

Sports team sponsorships by banks are coming under increased scrutiny by government regulators concerned about taxpayer rescue dollars are spent.

The Wall Sreet Journal reported Tuesday that Citigroup Inc. may back out of a $400 million marketing deal with the New York Mets, quoting unnamed people familiar with the matter.

The bank said in a statement Monday that no money from the Troubled Asset Relief Program will be used for the team’s new stadium. The bank (NYSE:C) has received $45 billion in from the federal TARP program.

The deal came under fire last week, with U.S. Reps. Reps. Dennis Kucinich (D-Ohio) and Ted Poe (R-Texas) writing to Treasury Secretary Timothy Geithner asking him to force Citigroup to get out of the Mets deal.

In addition to the deal with the Mets, which includes naming the new park Citi Field, Citigroup last month sponsored the Rose Bowl game and is sponsoring the 2010 national championship game. It also has naming rights to Citibank Park, home of the Long Island Ducks minor-league baseball team.

Citigroup said Tuesday that most of the TARP money it gets, about $27.5 billion, will go to mortgage lending. The bank said it would use another $2.5 billion for personal and business loans, $1 billion for student loans, $5.8 billion for credit card lending and $1.5 billion for corporate loans.

“The government, on behalf of the American taxpayer, has invested in Citigroup,” Chief Executive Officer Vikram Pandit said in a statement. “We have an obligation to repay in ways that will go well beyond the $3.41 billion Citigroup will pay the government each year in dividends associated with its TARP investment, and a separate loss-sharing agreement.”

Another bank that could feel the heat over its sports deals is Bank of America Corp., which signed a $7.5-million-a-year naming rights deal for the Carolina Panthers football stadium in Charlotte, N.C.

The bank (NYSE:BAC), which got $45 billion in TARP money, has been considering a major sponsorship deal for the new New York Yankees Stadium.