Should the government ever spend money on sponsorship?

Congresswoman Betty McCollum (D-Minn.) has introduced a bill designed to ban the military from spending money to sponsor NASCAR (HT: From the Marbles).  Her chief of staff states,

"The question is, why are taxpayer dollars being used to sponsor NASCAR race cars? We’ve got two wars going on. Can we afford it? This is not an attack on NASCAR. There are a lot of private sector businesses that support NASCAR. The Pentagon is in the war-fighting business and not the race business."

I believe this comes down to one's fundamental belief in the efficacy of sponsorship. If you think sponsorship is effective, then spending money in this way is fine. If you think sponsorship is just a waste of money and a way for decision-makers to get good seats at sporting events, you're not going to like sponsorship no matter how little money is spent. The Congresswoman hasn't released a comment as yet, but her chief of staff's statement above makes me think they're in the latter camp; further, it appears to be a very myopic view.

He states that "The Pentagon is in the war-fighting business and not the race business." However, if the sponsorship is effective at strengthening the military brand in the eyes of the military's target market (1-in-3 servicepeople is a NASCAR fan, and 1-in-5 NASCAR fans either serves now or has served in the military, says NASCAR PR man @RamseyPoston), it may be a worthwhile recruiting tool. Further, it is a form of after-marketing: it may make military people feel better about their time in the service and their connection with other veterans.

We don't know what the military's objectives are in the sponsorship, and we haven't seen the market research data, so there is no way for us to know whether this is an effective sponsorship (I'm guessing Congresswoman McCollum hasn't delved into the research either).  But if it is effective, why cut the money? Acquiring and supporting your human capital [troops] is part of the "war business," and if the NASCAR sponsorship is the right method through which that can be accomplished, keep it up. If it's not, however, the money shouldn't have been spent that way in the first place, even when times are good.

This situation is exactly what financial institutions faced when they received TARP funding. Suddenly sport sponsorships sports were a waste of taxpayer money. If the sponsorships were effective at getting customers before (Bank of America reports a 3:1 return on sport marketing spending), forcing banks to stop this sponsorships at a time when they most need customers is a terrible decision. Likewise, if sponsoring NASCAR benefits our military, in the middle of fighting two wars is the worst time to cut marketing.

McCormack Dept of Sport Management at UMass

Many congratulations to everyone involved with bringing the Mark H. McCormack archives to the University of Massachusetts Amherst (especially the amazing Lisa Masteralexis). From today on, the sport management department now has McCormack's name in its title. The massive archives of the father of sport marketing will be housed at UMass, and money was gifted from the McCormack family to create academic positions to enhance his legacy.

For all intents and purposes, Mark McCormack founded sport marketing. His famous handshake deal with Arnold Palmer gave rise to an entire industry and helped launched sports to their current heights. He went on to found IMG, the massive agency, media, and event organization. For more on McCormack and the UMass gift, check out Darren Rovell's "McCormack's Legacy Lives On At UMass."

This is cause for great pride at UMass, and I'm excited to see what the school is able to accomplish with these valuable resources. (Just too bad it happened 8 weeks before I'm leaving)

Rovell: NFL's Beer Deal Doesn't Add Up

I like a lot of Darren Rovell's work, but I really enjoyed this particular article (NFL's Beer Deal Doesn't Add Up - CNBC). In it, he questions how AB Inbev's recent sponsorship deal with the NFL pays off financially. He is candid in his assessment, and I agree wholeheartedly with his view. I had similar thoughts when I read about the deal, but figured that there was something that I must be missing. Well, at least Rovell is missing it too.

I also appreciated his hat tip to Pabst Blue Ribbon, one of my favorite brands to follow.

Update: Rovell spoke with AB President Dave Peacock today (4/1/2011), the first day of the agreement. Peacock defends the deal, noting that the NFL-wide deal allows AB to market beyond the 75-mile radius around each team with whom AB has an team deal.