Struggling with declining revenues due to the pandemic, Washington State University Athletics agreed to sell the naming rights of Martin Stadium to GESA Credit Union in a 10-year, $11 million deal earlier this month.
The deal comes after months of talks and speculation and will mark one of the more lucrative stadium contracts in college sports. WSU believes the deal could open the door for other business deals. “Our hope here at Washington State Athletics, is this sends a powerful message to future corporate sponsors, that when a company like GESA is willing to go down a ten year road with Washington State Athletics, it’s really a testament to who we are today, and where we are heading tomorrow,” said Pat Chun, director of athletics at Washington State University during a March 12 press conference.
It’s not surprising that Chun would be excited with the deal and the prospect that other businesses might want to partner with the Cougar athletic program, but his statement highlights one of the biggest misperceptions about credit unions in this country. GESA, which is the second largest credit union in Washington at more than $4 billion in assets, actually isn’t a corporation, and doesn’t pay corporate income taxes — or state B&O taxes for that matter. It is actually a “non-profit” credit union with a congressional mandate and a mission-driven charter to serve small groups of people of modest means and a common bond. Yet, in reality, it acts more like a for-profit company willing to outbid corporate competitors for market-share of large groups of people.
In fact, the more than $8 million in federal income taxes that GESA could have paid if it were any other incorporated business, and the $200,000 in Washington state B&O taxes, would almost cover the stadium sponsorship.
This large and growing credit union, which can somehow offer its services to virtually anyone in the state of Washington — or is related to someone that has some association with the state — plans to capitalize on the marketing opportunity by growing even larger.
“Partnering with WSU Athletics provides GESA with elevated name recognition to expand our reach,” said the lead quote from Don Miller, president and CEO of GESA, in the press release announcing the agreement.
Mr. Chun also noted that in addition to promising two new on-campus branches for GESA credit union to help sweeten the deal, he was confident that GESA’s new WSU-branded credit and debit cards would be a hit for consumers, and likely just the beginning as the credit union looks to capitalize on its tax-exemption and wayward charter.
“Right now, GESA has to get up and running not only within our campus, but also unleash their marketing plan,” said Chun.
All that growth may be good for GESA, but it certainly doesn’t help state and federal taxpayers, and it further calls into question whether buying up stadium naming rights was really what Congress intended when it created credit unions in the first place.