End of an Era: GM’s Sports Advertisement Budget and Billion Dollar Stadiums
General Motors, the troubled US automakers facing financial crisis, spent near $578 million on TV for sports advertising in 2007. It is 2X the amount of their nearest competitor, Toyota, which spent $287 million the according to the NY Times. GM has been the biggest TV sports advertiser in US the last five consecutive years.
G.M. has been scaling back its sports presence for at least a year. Cadillac, a G.M. brand, withdrew its sponsorship of the Masters golf tournament in January, and this summer, G.M. ended its relationships with two Nascar racetracks: Bristol Motor Speedway in Tennessee and New Hampshire Motor Speedway. The company is not renewing its longstanding partnership with the United States Olympic Committee when their contract expires at the end of this year. In one of the most dramatic examples of the company’s diminishing sports profile, G.M. said recently that it would not buy television commercials in this season’s Super Bowl broadcast.
Will they even be around for the Super Bowl? Recent reports indicate they only have capital to run through January (Unless the Gov’t steps in).
GM nearly spent a staggering $800 million in sports advertisement in 2006. GM had 11 advertising slots in last year Super Bowl and they will have zero this year. If the company receives federal bailout, like AIG, airing a Super Bowl commercial could annoy taxpayers, as the commercials will run $3 million a piece.
Update: Tiger Woods gets dropped by GM and losses $7 million.
Stadiums
The sports economics of building billion dollar stadiums and lucrative advertising deals as we know it maybe over, at least for now. The Cowboys spent $1.2 billion on their new stadium, out of which $300 million were financed by the public (City of Arlington). The new Mets stadium has ballooned to $900 million and Yankees stadium more than $1.7 billion. And the public (City of NY, NY State, Federal) is footing over $1 billion of the bill for these stadiums.
If the big three automakers fall, it may not be all bad….Goodbye NASCAR?
Around the Sports Market
- MLB’s Boston Red Sox announced that they are putting a freeze on ticket prices for upcoming season.
- NBA’s New Jersey Nets are giving out free tickets to unemployed fans who submit resumes.
- NFL playoff ticket prices will be cut an average of 10 percent from 2007s.
- MLB’s Oakland Athletics will have tickets for a family of four to attend Friday games and together with meals for just $50.
- NHL’s St. Louis Blues will pick a fan at random each Saturday night home game and pay his or her mortgage or rent for four months, up to $4,000.
Comments
I think they’ll still build expensive stadiums. It may be privately funded from now on and the public still might fall for it and give money for it anyway.
[...] The advertising market in sports is tightening up, just last week GM’s Buick decided not to renew Tiger Woods. [...]
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I can take losing the big three if it takes NASCAR with it.