Should The Military Sponsor Sports Franchises?

By:  Richard Braun, Ruling Sports Intern (Twitter:  @RicBraun)

Last week, Congress voted to continue military sponsorship of professional sports such as NASCAR, UFC, and bass fishing. By a 216-202 vote, Congress rejected a proposal that would have cut $72.3 million from the military budget for sports sponsorships.

The main target of this advertising money is NASCAR driver Dale Earnhardt. Jr., whose primary sponsor is the National Guard. In addition, the Marines sponsor the UFC and bass fishing, while the Army sponsors NHRA dragsters driven by Tony Schumacher and Antron Brown. The idea behind the sports sponsorships is to help with military recruiting, since sports tend to appeal to men aged 18-34.

The theory has not worked as well in practice, however. In fact, the Army has independently already decided that it will end its sponsorship of Ryan Newman’s #39 car after this year. The Army has been a NASCAR sponsor for the past 10 years, but has determined that the benefit they get from this is no longer worth the cost. NASCAR claims that the Army collected 46,000 leads for potential recruits as a result of their car sponsorship. But nonetheless, the Army will no longer be sponsoring Newman’s car, so the amount of enlistments that resulted from those leads must not have been worth it. Additionally, the Marine Corps ended their NASCAR sponsorships in 2006, with the Navy following suit in 2008.

Considering the significant cost of sponsoring a car such as Earnhardt Jr’s or Newman’s, the Government is certainly justified in taking a closer look at the effectiveness. A primary sponsorship of a car ranges from $10-20 million. Congress is taking a look at every aspect of the budget, and it is reasonable for them to examine whether or not that money provides any material benefit.

Looking into the demographics of NASCAR fans gives us a glimpse as to why the Army determined that the sponsorship did not result in higher enlistments. NASCAR has a huge fan base, 77 million strong, but only 5% of that falls within the military’s key demo: men 18-34. Spending in excess of $10 million to reach such a small percentage of potential enlistees would strike many as a misappropriation of funds. If the military aims to reach younger viewers, NASCAR might not be the way to go.

Dale Earnhardt Jr. is one of NASCAR’s most visible drivers, and the National Guard argues that they get great value on their branding opportunities. However, the National Guard should concern itself more with recruitment efforts than branding. Other sports would better allow the military to reach its target audience, and at a more affordable price. For example, at an NHRA event last year, the Army had the opportunity to speak with nearly 13,000 students regarding careers in the military. On top of this, advertising NHRA cars is three times cheaper than NASCAR.

Government sponsorship of sports leagues is not inherently a bad thing. Military enlistment has been declining steadily across the board for some time. Spending a relatively small part of the military budget on advertising could possibly yield positive results. Like any business, however, the advertising dollars have to be spent wisely. As popular as Dale Earnhardt Jr. is, his celebrity does not appear to be aiding National Guard recruitment. Spending the $72.3 million more wisely would not include Dale Earnhardt Jr. in the future.

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Filed under NASCAR, Sports Business

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