Monday, July 16, 2012

Sound Retreat: The Army Withdraws From NASCAR

The U.S. Army announced last week it is pulling out of its NASCAR sponsorship.  It’s a stinging defeat for NASCAR and its allies – primarily Stewart-Haas Racing (SHR) and Ryan Newman – who were outflanked by the forces of Field Marshal Betty McCollum, aka the U.S. Representative from Minnesota.   

The Army has been a sponsor in NASCAR since 2003 and with SHR since its founding in 2009, as one of the primary sponsors of Newman’s car.  The sponsorship, estimated to be about $9 million, was one of several in sports used by the Army as a recruiting tool.

For the past two years, however, McCollum has been waging war against military sports sponsorships for “wasting taxpayer dollars.”  McCollum says the Army alone spent $16 million on professional sports last year.  She put total Pentagon spending on sports sponsorships, including bass fishing and ultimate fighting championships in addition to motorsports, at more than $80 million.

“By ending its sponsorship of NASCAR, the Army made the right move to eliminate a wasteful program and protect taxpayer dollars – which has been my goal all along,” said Congresswoman McCollum in a statement.

It would be easy to dismiss the Army’s withdrawal as “politics,” just as Newman did.  But that would be a mistake.  It should have been even easier for the Army – and especially NASCAR’s vaunted marketing team – to prove the Army’s sponsorship dollars was providing a good return on investment in delivering recruits.  The fact they weren't able to produce the ROI numbers is an indication McCollum may have been on to something.

It’s interesting to note the Army says it will continue its drag racing sponsorships.  That tells me the NHRA is doing a better job attracting younger fans – the Army’s target audience.  And that should be a concern to NASCAR.  Despite everything it’s doing to attract younger fans, NASCAR continues to perform below the national average in drawing fans from the 18-24 age group, especially critical to the Army. 

In fact, the NHRA brags on its website that its fans, “compared to NASCAR fans, are 31% more likely to be ages 18-24 and 28% more likely to be Hispanic.”  Key Army recruiting targets.

Meanwhile the National Guard says it will continue to sponsor Dale Earnhardt, Jr.  Makes sense, the Guard skews more towards older demos than the Army and NASCAR performs best in the 35-45 group, a better fit.

The Army’s withdrawal further complicates the Silly Season situation.  Newman’s contract with SHR is up at the end of the year and while he is still expected to re-sign with his friend and boss Tony Stewart, the loss of a third of the No. 39 car’s sponsorship dollars makes it far from a forgone conclusion.  With Danica Patrick expected to go Sprint Cup full time next year, Newman could be the odd man out.

1 comment:

  1. Once again this all comes down to money. As someone whose job includes transporting military recruits, I can speak with some authority. Virtually none, (I would say none but not with 100% confidence) of the recruits I transport have any interest in Nascar, in fact dont even want to discuss it.
    This shouldnt be solely about Nascar, it should be about the best use of everyones tax dollars. While I now there is the temptation to say let someone else cut first thats how we got where we are today.
    And in closing you must wonder whether in fact these sponsorships aren't part of the old system of payoffs for political contributions? Curious how the Army who needs more people than anyone, but spends less money, makes a cut,while others who need less people, but spend more money, dont. (Don't tell anyone but the owner of that team was pardoned by a President from the same political party to that which sits in the White House today. But dont tell anybody).