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SBJ/October 5 - 11, 1998/No Topic Name
Motorola studies more cuts in sponsorships
Published October 5, 1998
Motorola Inc. is bowing out of its second PGA Tour sponsorship in a month as the financially beleaguered company makes a hasty retreat from what was a high-profile sports marketing strategy.
Schaumburg, Ill.-based Motorola will drop its presenting level sponsorship from the PGA Tour's Phoenix Open after 1999, the last year of Motorola's contract. The move follows the company's decision last month to drop its title sponsorship of the Western Open, which is held outside Chicago.
In addition, the company has dropped its sponsorship of a European bicycle team, an America's Cup sailing team and the Winter Olympics.
"We will diversify our sponsorship efforts consistent with our worldwide business and marketing needs," Motorola Senior Vice President Bill Seiferth said in a statement.
The company's remaining domestic sponsorships include a team in Championship Auto Racing Teams' FedEx Series as well as the Motorola 300 CART race held at Gateway International in Madison, Ill. The company's main international sports properties are two soccer teams, one in Asia and the other in Europe.
So will the company follow form and exit from CART?
"Motorola is reviewing all of its sports and marketing initiatives," said company spokesman Barry Cronin. "We are locked in with CART through 1999, and as of now, we will continue to sponsor the race team."
Motorola's moves follow sharp financial reverses this year. For the first six months of 1998, the company lost $1.1 billion, or $1.92 a share, compared to a profit of $593 million, or 97 cents a share, for the same period last year.
In June, the telecommunications giant announced a layoff of 15,000 workers. Two weeks ago, the company halted construction of a massive semiconductor chip plant in Virginia as the floor continues to drop out of the semiconductor market.
"We've restructured the company, and that's causing Motorola to look at everything we do," said Dave Weisz, director of sports marketing for Motorola. "We're looking at the sponsorships just like anything else, and if they are not doing what they are supposed to, then we want to exit them."