Economy Affecting Sponsorships: Buick Pulling Back with Tiger Woods?
With the exception of hockey which seems to have declined steadily (regardless of economic conditions), the overall health of sports teams seems to be fine. We haven’t heard much about ticket sales and attendance figures dropping, not to mention merchandise sales and money spent at games. We have heard that the economy may be preventing rich alumni from coming through on their promised donations to their alma maters, and now I’m reading that sponsorships of individual athletes could be waning. Evidence Buick with Tiger Woods:
GM may implement a round of cost cuts because a planned $15 billion in asset sales and savings won’t be enough to maintain its liquidity amid deteriorating sales, people familiar with the matter said. The company’s stock has dropped more than 74 percent this year, to $6.19 at yesterday’s close, and GM has cut 53,000 union workers since 2005.
Because of that, [Woods' agent Mark] Steinberg said in a telephone interview that he wants to find out if it “makes sense to continue” beyond 2009, when the contract expires.
In the coming year, [Woods' agent Larry] Peck said, Buick would be “trimming back” some of its spending on “back of the house” things, such as hospitality at sports events.
One of the problems might be that Tiger is out recovering from knee surgery meaning he’s not producing returns on investment. Buick is also a big sponsor of the PGA Tour in general, so they may choose to scale that back, if not Woods. Bottom line: if the money isn’t there, it’s going to be hard for Buick to advertise, right?