GMAC may be in financial trouble, but that isn't stopping the auto lender-turned-bank holding company from maintaining its corporate sponsorships. The question is - will anyone notice?
In October, GMAC (NYSE:GKM) changed its legal status so that it would be eligible for TARP funds passed by Congress. Late last month, GMAC was approved to receive a $5 billion lifeline from the U.S. government. However, the company is still maintaining its sponsorship of a collegiate bowl game set for Jan. 6 in Mobile, Ala.
"There's about 34 bowl games, 30 of which are sponsored in one way or the other," Fox Business Network's Jenna Lee said Jan. 2 on the Fox News Channel's "Happening Now." "The lower-level, the mid-level games pull in about six figures to have your name attached to one of the games - that's the estimate. And the big games, let's say the Rose Bowl for example, or the Sugar Bowl, or the Orange Bowl - those figures go upwards of $5 to $6 million for some sort of sponsorship."
As Lee pointed out - GMAC is continuing to sponsor the game, although they're in financial trouble.
"So GMAC as you mention - the GMAC Bowl is going to be happening Tuesday I believe and it of course is this lending arm that received government funds and we don't know exactly how much they spent, but they're staying in this."
According to a June 13, 2000 Associated Press story, GMAC originally agreed to pay $500,000 for the naming rights of the Mobile, Ala. bowl game.
"GMAC agreed to pay the city $500,000 for naming rights on the bowl logo, Mobile Mayor Mike Dow said Monday at a news conference announcing the deal," the 2000 story said. The cost of the bowl game at the time was $1 million and split between the city of Mobile and GMAC.
The bowl game provides a positive impact for their local economy according to the 2000 AP story.
"Last year, we had an $11 million impact, the greatest impact of a single-day sporting event in Mobile's history, and this year will be better," Jerry Silverstein, the bowl's president said in 2000.
The naming of GMAC after a bowl in Alabama is ironic because both Republican Alabama Sens. Richard Shelby and Jeff Sessions have been adamant opponents of the bailout culture that has captivated Washington, D.C. Their bailout opposition upset one Detroit man so much he is calling for a boycott of Alabama.
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In 2006 AIG made
January 2, 2009 - 18:50 ET by ahussera 100 million dollar, 4 year sponsorship deal with Manchester United (One of the most valuable sports franchises in the world). Since the failure of AIG nothing has been said or done about this deal to my knowledge.
Change: When the winds of change blow hard enough, the most trivial of things can become deadly projectiles. From a Poster
AIG Could Have Backed Out
January 2, 2009 - 19:09 ET by BW222Manchester United had another sponsor (a Saudi cellular carrier) lined up to replace AIG as its sponsor, but AIG declined to step down.
$100 million is a high price to pay for the right to have your logo on a soccer team's jerseys - even Manchester United.
BW222
A perfect example of why this is a BAD idea!
January 2, 2009 - 18:58 ET by c5thenAll the banks and financial institutions as well as the car makers, etc., should have been required to file Chapter 11 bankruptcy. As it is now, we are all going to have to pay off $1 trillion in extra borrowing through taxes and inflation so that these asshole companies can continue in their ways and pay their CEO's millions in bonuses.
My new hobby in life is to not do any banking business with any entity connected to the bail out and to not buy a car from any company that got bailed out either.
Hey, I got the wrong "CHANGE"!
Alan Keyes / Sarah Palin - 2012
I don't especially know if
January 2, 2009 - 19:54 ET by ThatDudeI don't especially know if that will work, because it will likely aid in future failings and more subsidizing. There's the problems with bailouts like this, there's really no end in sight. I commend you for your principles, but it doesn't especially have any effect outside of the free market (which we are sprinting away from.)
If they change the name
January 2, 2009 - 20:59 ET by RangerTomIf they change the name to the "Bailout Bowl" I'll be satisfied.
Screw diversity, celebrate competancy
There are plenty of real reasons to complain...
January 2, 2009 - 21:05 ET by OBQuietbut is this one?
I strongly oppose the bailouts but this is simply advertising. Do we want to prevent GMAC from advertising? If so, then sure complain about this. But otherwise, for $1M or so they get there name mentioned with every bowl announcement and all through the game. Sounds cheap to me.
I find it strange that
January 2, 2009 - 22:02 ET by jpm100I find it strange that people who claim to care about free market practices and don't want a bailout because its too socialist want to micromanage how they do business.
And not from a perspective of protecting their investment, but because the ad rubs them personally the wrong way.
Well Jpm100
January 2, 2009 - 22:15 ET by ahusserSo the real sponsors of these bowl games and Shirt adverts et al who are receiving or are going to receive bailouts is going to be the Federal Government funded by the taxpayers that is what is torqueing me. All sorts of complications in this bailout scheme aren't there. I'd like to take these failed companies (for whatever reason they are failing) out of the realm of political/bureaucratic decision making or who makes the biggest contribution or kickback or whatever. Let the market sort it out. Many companies have come back from Chapter 11. A lot easier than trying to figure out which of the many companies on the brink "deserve" bailing out.
Change: When the winds of change blow hard enough, the most trivial of things can become deadly projectiles. From a Poster
This Post Seems Off-base
January 2, 2009 - 22:38 ET by SmartypantsI am not necessarily in favor of the bailouts of auto companies, banks or whatever GMAC calls itself today; however, I see the bailouts and the bowl sponsorship issue as two different things. Once the decision was made to "loan" these organizations money, that becomes a sunk cost. The decision as to how to spend advertising dollars has to remain with the management of these organizations, GMAC included. If they believe that an investment in the bowl sponsorship is good for business, that's their call. Should we advocate stopping advertising altogether? That is not a wise business practice, especially in a down economy. There is an old business saying, "In good times you should advertise; in bad times you must advertise." If GMAC is to regain form as a viable entity, perhaps it is necessary to keep its name in the public domain as much as possible. A bowl sponsorship might be money well spent if this is true.
Once again
January 2, 2009 - 23:09 ET by ahusserYou have become the defacto sponsor of bowl game or whatever through your tax dollars. As I said the issue becomes very complex. And It is not neccessarily a sunk cost. GM comes begging for money but maybe could have sold their rights prior to the bowl games for more or less money who knows same with Man U with a year left on their contract. I don't know how these deals are structured but it might be a pay as you go or they are locked in but maybe they should explain somethings. Naw they just want they handout and are not that forthcoming with how things will change.
Maybe not good business practice but the perception is they are asking (begging) for money when it seems they are frivolously spending same. There is a lot of vanity advertising in these sports venues (Enron anybody). I personally cannot judge whether this type of advertising is cost effective or not. At least selling some of these 'assets' would appear to be belt tightening and fiscally responsible. Just my opinion.
Change: When the winds of change blow hard enough, the most trivial of things can become deadly projectiles. From a Poster
I just think you're
January 2, 2009 - 23:48 ET by SmartypantsI just think you're confusing the two issues. All you're saying (from what I can tell) is that the government should not have bailed GMAC out. Fine. I agree. However, the decision was made to bail them out. After that, I don't think they should be micromanaged by people who know nothing about running anything, other than a government bureaucracy. In this instance, we're not talking about GMAC giving away huge bonuses to its executives. We're talking about allocation of advertising and promotional dollars. Whose decision exactly should it be as to how GMAC should spend its advertising dollars? Nancy Pelosi? Harry Reid? Obama?
Bowl Sponsorships Are a Waste
January 3, 2009 - 01:46 ET by BW222I am in automotive marketing and believe bowl sponsorships are a waste.
GM and Ford have made major quality improvements and have really closed the gap with the Japanese nameplates. But, they are not going to demonstrate this through bowl sponsorships or TV/magazine advertising for that matter. The key is experiential marketing - getting vehicles where consumers can touch, see and drive them.
What do you during an NFL commercial: A) check on the game on the other network, B) play with your laptop, C) get a beer, D) get rid of a beer, E) intently watch the commercials?
BW222
I am not confusing the 2 issues
January 3, 2009 - 11:31 ET by ahusserThe issues are linked. As I and everyone else who pays taxes is going to be a part owner of these enterprises. In a very true sense we have just nationalised certain industries based on what criteria I don't know: political, ideological, too big too fail etc.
I think, through my reps (ha ha), I should have a say on how the money is spent. My perception on this kind of advertising is you better show me it brings in customers who spend money not just some vanity crap. Remember you are now part owners of these entities. I realize these may be done deals but the perception is that they were wasting money while their companies (they had to know) were going down the crapper. I think it is a matter of poor managemerial decisions and why am I involved as a taxpayer in this whole mess is way beyond my comprehension because if I wanted to own these POS corps. I would have bought stock nin the first place now I am an unwitting and unwilling owner.
And don't the dems just love this with these corporate idiots with their hands out not they get to call the shots which is what they wanted to do all along in their socialist utopic dreams with all their little tiny hearts and brains.
Change: When the winds of change blow hard enough, the most trivial of things can become deadly projectiles. From a Poster
I just think you're
January 2, 2009 - 23:51 ET by Smartypantsdeleted - repeat
This is part of the price these companies will have to pay...
January 3, 2009 - 08:58 ET by JohnMcGrew...now that the taxpayers have become unwilling shareholders.
Of course, advertising is a legitimate business expense, and I don't has as much of a problem with this as many others do.
However, I have little sympathy for GM, Citi, and the others taking heat for their sponsorship deals. Now that every American is subsidizing them, they have every right (and responsibility) to scrutinize every business decision, just as shareholders would have (or should have) done before the bailouts.
They come begging for
January 3, 2009 - 10:50 ET by pitter43They come begging for welfare yet have money to throw away like this? They're disgusting pigs just like the congressmen that gave themselves a 4,700.00 a year raise. You'd think they might be interested in America instead of their own pocketbook. I refuse to do business with any antiamerican enterprise or anyone that is associated with them.