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.
