By Barry Janoff
August 7, 2014: Citing "significantly constrained resources," the Army National Guard said that is is making substantial changes to its "sports sponsorship approach to recruitment marketing,"
The move includes ending its sponsorships of Nascar driver Dale Earnhardt Jr. and Graham Rahal (pictured right) in the Indy Racing League when the respective contracts expire at the end of their 2014 seasons.
The Army National Guard said it spent $32 million on its sponsorship of Earnhardt Jr., which is currently in its seventh season, and $12 million on its IndyCar sponsorship for 2014. Rahal, who drives for Rahal Letterman Lanigan Racing, signed with the Army National Guard this season.
“Significantly constrained resources and the likelihood of further reductions in the future call for more innovative and cost-effective ways of doing business,” Major General Judd H. Lyons, acting Director for the Army National Guard, said in a statement.
The move is a continuation of budget cuts in sponsorship and marketing enacted by the Army National Guard in recent years. Since 2012, the Army Guard said it has reduced sports sponsorships from six — including pro fishing and motorcycle racing — to two, the Nascar and IndyCar alliances.
In fiscal year 2015, the Army Guard said its marketing budget is expected to be about half of what it was in fiscal year 2012.
In his statement, Major General Lyons said that, while sports sponsorships have played an important role in helping the Guard build strong brand awareness, “We believe industry and open competition can help us identify effective and efficient solutions to help us meet our marketing and recruiting objectives within budget constraints."
The Army National Guard has been under fire for its sports-related spending from elected officials from both parties including Sen. Claire McCaskill (D-Mo.), chairwoman of the Senate financial and contracting oversight subcommittee, and Sen. Ron Johnson (R-Wis.).
“We share a common commitment to the American people to be good stewards of taxpayer dollars,” Major General Lyons said in revealing the budget cuts. “We will continue to assess and refine our programs to ensure we get the best return on investment.
According to Lt Col Christian Johnson, head of marketing for the Army National Guard, “Our Nascar sponsorship was principally a marketing program, intended primarily to build awareness of the National Guard as a career option. [It] allowed the National Guard to leverage a 77 million fan base and the sport's most popular driver."
Although the loss of the Army National Guard would take a big bite out of his marketing income, Earnhardt Jr. would still have a bevy of partners. His current deals include Mt. Dew, Amp Energy, TaxSlayer, Breyers, Wtangler, Hellman's, Chevy, NAPA and eBay.