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Earnhardt and friends worth more to GM than Tiger Woods
By admin | November 24, 2008
By Richard Allen
Some of the biggest names in all of sports have had endorsement deals with automobile giant General Motors in recent years. Championship winners and popular superstars have traded their name recognition for lucrative deals with the auto maker.
Among those names are NASCAR champions Jeff Gordon, Jimmie Johnson and Tony Stewart as well as the immensely popular Dale Earnhardt, Jr. from the world of NASCAR along with golfing mega star Tiger Woods.
In an effort to cut costs in what may well be the auto industry’s most challenging time since the Great Depression, GM has decided to hold on to some of the money that had been intended for high profile endorsements.
Tiger Woods will no longer be the recipient of GM’s deposits in his bank account. His endorsement deal with the Buick brand, believed to worth $7 million per year, will be terminated.
GM had already announced it would be significantly scaling back its involvement in NASCAR by reducing its signage and other advertisements with the various speedways it had previously had dealings with. However, the company will continue to provide its support to the teams who run its Chevrolet products.
Those teams include such power players as Hendrick Motorsports and Richard Childress Racing, along with the newly reorganized teams of Earnhardt-Ganassi Racing and Stewart Haas Racing. The previously mentioned drivers make up part of the list of NASCAR heavyweights who compete with the bow tie logo on the front of their machines.
Apparently, GM decided it is more beneficial for them to have the likes of Gordon, Johnson, Stewart and Earnhardt winning races and mentioning their name in victory lane than to be associated with the most prolific golfer in decades, if not of all time.
There is, of course, a natural relationship between an auto maker and NASCAR teams. What remains to be seen is whether the continued support of those teams will expose GM to the best possible audience for its products.
In 2008, the General Motors’ Chevrolet brand won its 32nd NASCAR Manufacturer’s Championship. However, the auto maker is currently in the midst of another more important championship battle. That is the battle to return to profitability before it is too late.
Reducing expenses by ending its association with Tiger Woods while continuing to spend big money, which is rumored to be as much as $100 million per year spread among its various teams, in NASCAR may allow the company to once again achieve that profitability. The fates of many people inside and outside the world’s of golf and racing depend on GM making the right decisions.
Richard Allen is a member of the National Motorsports Press Association. His weekly column appears in The Mountain Press every Wednesday.
Topics: Articles |
November 25th, 2008 at 10:08 am
I do, however, question GM terminating it’s Cadillac sponsorship of The Masters. People watching The Masters might actually have the money to buy one.
November 25th, 2008 at 10:59 am
There was a time when the manufacturers nameplate was a factor in NASCAR. “Win on Sunday, sell on Monday”. Being a Chevy guy, a Ford guy or a Mopar guy was how you based your driver loyalty. That’s not the case anymore. The COT format probably drove the last nail into that coffin. I would bet that 99.999% of car buyers have no idea what brand wins the NASCAR Manufacturers Championship each year. Today, most NASCAR fans are really driver groupies. The driver with the best marketing department has the most fans. Nevermind the success on the track or what brand he drives. Did Tony Stewart gain or loose fans when JGR switched from Chevy to Toyota? Will he gain or loose fans with his switch back to Chevy with his own team?
Auto manufacturers could eliminate their support of NASCAR (it has happened before) with little or no effect on their ability to sell cars. Their probelms with selling cars goes a whole lot deeper than NASCAR. In fact. I might argue that eliminating their support could actually help them sell more. If they took that $100 million a year and spent it on developing products that meet the needs of our world today and in the future, they might be a lot better off in the long run.
November 25th, 2008 at 4:46 pm
As we see the exit of brand names such as AC Delco being off cast by GM. Will we see the High Performance divisions go too. GM has an awefull big investment in the CREAT engine business. Many racing facilities are requiring those low compression engines to be the power of choice. With GM out of cash by early as February, will that division be sold off to say some Mexican manufacturing supplier. Only time will tell, but GM better send out letters to say we will still produce low cost creat engines. They will still be available at your local GM supplier. Where else can you find a off the shelf 500 HP engine for under $3,500.00. Toyota?