Yesterday, Morgan Stanley announced it would not even attend the PGA Memorial Tournament, an event it is sponsoring in June. As the main sponsor of the tournament, which takes place in Dublin, Ohio, Morgan Stanley would typically send employees to the event and leverage its sponsorship to entertain clients. Banks can’t simply back out of their sponsorship commitments, but the current economic climate is forcing them to scale back or eliminate all other expenses related to the events. How could a company like Morgan Stanley wine and dine its clients in such a public way when it’s also taken $10 billion in federal government aid?
Northern Trust Corp., a company that received $1.6 billion through the Troubled Asset Relief Program (TARP), was criticized by lawmakers earlier this week for spending money on entertainment last weekend during a PGA tour for which the company is the title sponsor. Wells Fargo also announced yesterday that it is cutting spending on the Wachovia Championship event it inherited when it acquired the bank last December. Given the many missteps financial companies have made since receiving TARP money, it seems like Morgan Stanley and Wells Fargo were lucky to learn from Northern Trust’s unfortunate example. In the news cycle, timing is everything.