By admin | July 10, 2012
By Richard Allen
The United States Army has formally announced they will not return as the primary sponsor on the Stewart-Haas Racing car of Ryan Newman in 2013. This announcement comes on the heels of a campaign led by Congresswoman Betty McCollum(D-MN) and Congressman Jack Kingston(R-GA) to end the practice of taxpayer funded organizations like the military spending money to back NASCAR teams.
The Army says their decision was based on a reallocation of funds for marketing that will not include a continued presence in NASCAR. The military branch spent $7 million to get its name on the side of Newman’s car for twelve races in 2011.
Particularly damning to the chances of military funded sponsorship continuing in NASCAR was a report published in May of this year in which it was said that despite the spending of $26.5 million in 2012 toward the support Dale Earnhardt, Jr. and his Hendrick Motorsports team with the National Guard logo, not a single recruit attributed racing sponsorship as a reason for signing up for service.
HMS has received more than $130 million over the last five years from its contract with the National Guard.
A bill that would officially end the practice of military sponsorship of all professional sports, including NASCAR, passed through the House Appropriations Committee on May 17, 2012. Obviously, the Army is not waiting to see whether or not the bill will pass all the way through the full House of Representatives, the Senate and eventually get the President’s signature.
So, will the Guard soon make the same move?
National Guard is serving as the primary sponsor for the #88 car in 16 races this season and as an associate sponsor for the rest of the schedule. They have already stated an intention to reduce their involvement with HMS in 2013. As of May, negotiations between the racing organization and National Guard had not commenced in regard to the extent of their partnership going forward.
The dropping out of the Army as a primary sponsor is not a good sign for NASCAR in general, House bill or not. The report claiming the complete lack of effectiveness of the military’s sponsorship almost certainly raised some warning flags in other industries. The amount of money spent on racing is enormous and the return on investment has to be justifiable or else companies must consider other options in this time of economic uncertainty.
With grandstands often far less than filled and television ratings not what they used to be, one has to wonder if indeed that return on investment is actually there for the military, beer companies, oil companies or any other form of business. It would seem as though NASCAR teams may no longer be handed a blank check from corporate America with which they can conduct their business.
So, will the U.S. Army officially announcing that they are retreating from NASCAR serve as warning shot that sport’s most popular driver could be losing a lucrative backer? And more importantly, will the report of less than expected return on investment mean that less popular and well known drivers will also be losing financial support?
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