SBD/Issue 112/Sponsorships, Advertising & Marketing

GM Cutting Spending For Final Four, May Not Renew NCAA Deal

 
General Motors Thursday stated that it is "cutting on-site spending" for this year's NCAA men's basketball Final Four at Ford Field by at least 60%, and "might end its 25-year sponsorship" with the NCAA when its contract expires after this season, according to Curtis Eichelberger of BLOOMBERG NEWS. GM General Dir of Marketing & Entertainment Alliances Steve Tihanyi indicated that while the Final Four is taking place in Detroit, where GM is headquartered, the company is "trimming dealer-incentive trips to the championship rounds and billboards downtown." GM, which has already received $13.4B in TARP funding, Thursday reported a net Q4 loss of $9.6B. Tihanyi said of the company's spending, "If it's not mission critical, we're not doing it. We can't be stupid about how we do things here." Tihanyi added that the manufacturer "shelved a program for top-selling dealers that included tickets to the Final Four, business meetings and entertainment." GM Communications Manager Kelly Cusinato noted that there are "no advertising or marketing restrictions attached to the government loans or the company's viability plan" (BLOOMBERG NEWS, 2/26). 

FINAL COUNTDOWN: CNBC.com's Darren Rovell reported GM, whose Pontiac brand is the official car of the NCAA, is "not inviting anyone to watch" the Final Four from the luxury suites at Ford Field. GM's Larry Peck, promotions manager for Buick and Pontiac, said that the manufacturer is "in the process of trying to sell the suites." Peck: "We will use the sports properties that we have contracts with to advertise and promote the products, but there are no hospitality or motivational type programs associated with those properties." However, Rovell noted there still will be "plenty of Pontiac ads on CBS' coverage" of the NCAA tournament due to contractual obligations. Meanwhile, Peck said that GMs Buick brand is "contractually obligated to sponsor" the PGA Tour Buick Invitational and Buick Open through '10, and indicated that there still is "value in those title sponsorships." But Rovell noted Buick "massively cut back on its hospitality for the Buick Invitational earlier this month," and the "small hospitality tent that was overlooking the 18th green" at the event will not be in place for this year's Buick Open from July 30-August 2 (CNBC.com, 2/26). CNBC’s Donny Deutsch said of GM, “What it’s showing is they’re listening. What they’re recognizing is we live in a world right now where there is a tremendous sensitivity to any institution taking government money.” But CNBC’s Dennis Kneale disagreed, saying, “It’s silly. They’re overreacting.” Rovell: “Who’s to say what the return on investment is? Is the government going to say?” (“Power Lunch,” CNBC, 2/26).

PROCEED WITH CAUTION? PGA Tour Exec VP/Communications & Int'l Relations Ty Votaw, when asked if sports marketing is "being singled out" amid criticism surrounding spending habits of federally-aided companies, said, "Some of these institutions are still advertising on television and that spending isn't being criticized" (CNBC.com, 2/26). MEDIAPOST's James Gregory writes, "There is no rulebook for how to use TARP money. Lately, any company stepping outside the 'normal' lines of thought will get nailed by the media or humiliated by Congress. Is that really where we want to wind up?" (MEDIAPOST.com, 2/27).

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