The National Basketball Association is even expanding sponsorship to uniforms. The league's board of governors is expected to approve a measure in September that will allow sponsorships on jerseys for the 2013-14 season. The move is projected to net the league upward of $100 million per season. According a study Forbes conducted, the Los Angeles Lakers could generate $4 million from ads on jerseys, while the New York Knicks and Boston Celtics could each pull in about $3 million.
Now, the federal government is weighing in on sponsorships in sports. But they aren't telling others how to spend their money. Instead, Republicans and Democrats are bickering among themselves about spending dollars on sponsorship to help promote the U.S. Armed Services.
In May, Georgia Republican Jack Kingston and Minnesota Democrat Betty McCollum got the House Appropriations Committee to approve their amendment to the Fiscal Year 2013 Defense Appropriations Bill that prohibited taxpayer funds from being "used to sponsor professional or semi-professional motorsports, fishing, mixed martial arts, wrestling, or other sporting events or competitors." The amendment passed the committee and moved to the floor of the U.S. House for consideration.
Marco Gentile, an adjunct professor of sports marketing at Loyola University, has industry experience that includes developing corporate sponsorship programs for several professional sports franchises. He disagrees with the representatives' perspectives and said sports marketing was an effective tool for the military to promote its mission and reach potential recruits.
"The demographics that sports offers align perfectly with who the military branches are trying to reach in both potential recruits, as well as parent and guardian ‘influencers,' as recruiters call them," Gentile said.
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A release Kingston and McCollum issued said the Department of Defense was spending more than $80 million this year to sponsor NASCAR racing teams, Indy racing, professional bass fishing, pro wrestling and ultimate fighting. In 2011 and 2012, the National Guard alone allotted $121 million on professional sponsorships, including $20 million for professional fishing and $90 million for NASCAR, Indy car and motorcycle racing.
The Kingston-McCollum Amendment also specifically targeted NASCAR's most popular driver, Dale Earnhardt Jr., stating that the National Guard spent $136 million between fiscal 2008 and 2012 to sponsor Earnhardt Jr.'s No. 88 car/team -- a move the two representatives said would come to an end if their amendment became law.
But the NBA, the National Football League, Major League Baseball, IZOD IndyCar Series and NASCAR joined together to ask Congress to continue to allow the military to spend money on sports sponsorships.
"Sports marketing has long been an important element in the U.S. Armed Forces' efforts to reach young adults and active duty personnel regarding the military's missions and objectives that serve our country," said the letter the leagues sent to House Speaker John A. Boehner and other House leaders.
The leagues said the services branches' professional sport sponsorships had directly impacted military recruiting. They cited an example in 2010 in which the Army's recruiting efforts at NASCAR events resulted in 46,000 qualified leads, and noted that similar relationships with the other leagues had resulted in comparable outcomes. The letter also cited that the benefits of these types of sponsorships offset the minimal costs to taxpayers.
On July 18, the professional sports leagues scored a victory against the Kingston-McCollum Amendment. In a vote of 216-202, the House rejected the effort to cut more than $70 million for sports sponsorships from the $608 billion defense bill.
Maryland Congressman Dutch Ruppersberger was a member of the House Armed Services Committee until late June, when he stepped down to allow Rep. Ron Barber of Arizona to join the committee. A message left for Rep. Ruppersburger's director of communications seeking comment from the congressman on the House's decision was not returned. Fort Meade and Aberdeen Proving Ground are located in Ruppersberger's district.
Approximately a week before the vote on the Kingston-McCollum Amendment, the U.S. Army announced it was ending its decade-long relationship with NASCAR as it would not be returning next season as a sponsor of Stewart-Haas Racing's No. 39 car, driven by Ryan Newman. An Army News Service report said the military branch committed more than $8 million to a NASCAR sponsorship for fiscal year 2012.
According to John Myers, director of marketing support element for the Army Marketing and Research Group, "the Army is looking to reach a particular segment of the population, men between the ages of 18 to 24. But the NASCAR audience is starting to skew older."
"It's very possible that the Army is simply re-evaluating their efforts in NASCAR, which is smart considering we are not at war," Gentile said. "Instead of spending tens of millions a year on a car sponsorship, they could spend the money via individual track sponsorships that would allow them to have recruiters on-site during race weekends directly recruiting.
"Ultimately, being on-site with recruiters directly reaching out to teenagers, young adults and their influencers is the type of sponsorship that the Army should be involved in, which would offer the best [return on investment]."
Earnhardt Jr. told the Associated Press that, despite the U.S. Army's decision, he was optimistic about his sponsorship relationship with the National Guard and thought Hendrick Motorsports' program with the National Guard was productive.
Originally posted July 23, 2012 in the Sports Business Report at PressBoxonline.com
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