Congress looks at cutting military sports sponsorships
By Daniel Malloy | The Atlanta Journal-Constitution | Published: June 19, 2012
WASHINGTON — The $26.5 million in public funds affixed to Dale Earnhardt Jr.’s racecar in the form of a National Guard logo is an attractive target for lawmakers in the midst of a military budget squeeze.
But a U.S. House attempt to ban armed forces sponsorships of professional sports — co-authored by Jack Kingston, R-Ga. — has touched a nerve within NASCAR.
After the provision was included in a defense spending bill set to hit the House floor in the coming weeks, Earnhardt told reporters, “The Republican from Georgia, he hasn’t even been to a NASCAR race.” Last year when Rep. Betty McCollum, D-Minn., brought up a similar proposal she received an anonymous faxed response calling her a “slut.”
McCollum and Kingston say they are just being careful stewards of taxpayer dollars, questioning whether the sponsorships are worth the money. Their effort does not actually reduce any budgets, so the money likely would be shifted to other kinds of marketing.
The Army sponsors NASCAR driver Ryan Newman, National Hot Rod Association driver Tony Schumacher and others, spending $16.1 million on professional sports this year. Motorsports are a great way to reach candidates and “influencers” — adults who help counsel a potential recruit, said Col. John M. Keeter, Deputy Director of the Army’s Marketing and Research Group. Beyond motorsports, the military has sponsored bass fishing, ultimate fighting, the World Wrestling Federation and the National Football League, among other sports.
The armed services have a responsibility to show they get a good return on the investment, and they have not done it, Kingston said. Stakes are high with $500 billion in cuts over 10 years scheduled to begin in January — the result of last year’s agreement to raise the federal borrowing limit. The Pentagon is planning an additional $487 billion in cuts.
“While we’re … making real cuts and making real differences, they have to justify why they’re spending this kind of money,” Kingston said. “Instead of making somebody like me an enemy, say, ‘We looked at it, here’s hardcore statistics on why we’re going to continue it.’ ”
With cuts looming, the military already is backing off pro sports in some cases. Sponsorship spending of all kinds across all branches decreased by $16 million this year. Recruiting and advertising budgets are due for cuts next year — the Army National Guard is facing an 18.8 percent cut, to $310 million — as the military implements planned reductions in troop sizes.
Cutting sponsorships is comparatively “easy” when the military the military is under the gun to make billion of dollars in cuts, said Winslow T. Wheeler, director of the Straus Military Reform Project at the Center for Defense Information and frequent critic of Pentagon spending.
“They are pretending to address the bigger problem, which is finding additional billions upon billions of stupid programs, let alone waste,” Wheeler said.
The military has struggled to quantify the effect of the sponsorships. Kingston and McCollum pounced when Maj. Brian Creech of the National Guard told USA Today that 24,800 people contacted the Guard about joining as a result of the Earnhardt sponsorship, but of that total only 20 were qualified and none joined.
National Guard spokesman Rick Breitenfeldt told the Atlanta Journal-Constitution in an email the figures caused “quite a little debate” within the Guard. He added that Creech “most likely did not have all the information necessary to make those claims” and there is no good number on recruits because the spending is part of a broad branding effort.
Keeter said the Army’s motorsports sponsorships brought in 28,715 “qualified leads” last year, but he could not give a precise number for recruits. It’s not like a logo that makes you thirsty for a Mountain Dew: Keeter said the recruitment process involves reaching young people — and the adults who guide them — in a variety of ways, encouraging them to make a life-altering decision.
Kingston and Bill Harper, McCollum’s chief of staff, said opposition to the sponsorship ban has been coming from NASCAR, not the Pentagon.
NASCAR vice president of public affairs Marcus Jadotte said the circuit is lobbying against the ban.
“The military and government agencies should have the freedom to make decisions based on what works best for them,” he said.
He also noted that sponsorship is more than a decal on a Chevrolet: It opens doors for military recruiters to have a prominent presence at races and other NASCAR events.
The real dispute is over control. The sponsorship ban would not further reduce the military’s already shrinking recruiting and marketing budget, which included $80.3 million in professional sports sponsorships this year. Keeter said the Army simply wants to make its own marketing decisions.
NASCAR itself does not make money from the sponsorship deals, which are with the individual race teams. Still, like many businesses, the circuit is having difficulties attracting and retaining sponsors in the rocky economy, said David Carter, executive director of the Sports Business Institute at the University of Southern California. He said Earnhardt, NASCAR’s most popular driver nine years running, would probably not struggle to reel in a new major sponsor, but “you don’t want to have to put your business team through that.”
Carter compared the controversy to public outcry when Citibank became the title sponsor for the New York Mets’ stadium after a federal bailout, but he said a government entity brings a more intense public relations problem.
“That’s going to be a very challenging optic for a lot of fans, a lot of consumers, a lot of taxpayers to be able to get over,” Carter said. “It’s another thing if it were a McDonald’s or a Coca-Cola.”
This issue is likely to turn into a racing-themed House floor fight.
McCollum’s past efforts to ban motorsports sponsorships were defeated by big margins in floor votes, but this time Kingston’s backing got the ban into the bill during the committee process. A foe of the sponsorship restriction, Rep. C.W. “Bill” Young, R-Fla., told the AJC he let the amendment go through because he did not want to make colleagues choose between two appropriations subcommittee chairmen — Kingston runs the agriculture subcommittee, while Young controls defense spending.
But Young said he expects the sponsorship ban will be removed by the time the law is passed. He would not say whether he planned to offer a floor amendment himself.
“I’m satisfied that the majority of members support us using that as part of our recruiting,” Young said.
Kingston said the issue is a test for his GOP colleagues who too often give the military the benefit of the doubt with taxpayer funds.
“It’s important for Republicans,” he said, “to weigh in and keep the same yardstick that we would use on a welfare program or something that we might be a little more skeptical of just to begin with.”