General Motors Co. cut its sponsorship budget by 60% compared to pre-bankruptcy levels. This may signal the end of multimillion-dollar rights deals as GM seeks to connect more effectively with consumers.
In an interview last Wednesday, Steve Tihanyi, GM's general director of marketing services, including sports sponsorships, said that” we shouldn’t expect GM to do eight or nine mega-rights deals any longer."
GM reportedly wants “more bang for [its] buck.” Last June, GM filed for bankruptcy and emerged the next month after it received a $50 billion funding from the US government, which now owns a 61% stake in the company.
According to sponsorship research firm Navigate, GM spent about $230 million to $250 million on sponsorships from 2006 to 2008. About half of that amount was used in NASCAR auto racing and other motorsports. Navigate President A.J. Maestas said that this does not include what GM spent to publicize these deals through ads and promotions.
This means that the combined outlay amounts to about $500 million. Maestas said that GM still does rank among the 10 largest corporate spenders even with half its pre-bankruptcy levels.
GM’s spending isn’t expected to return to the 2008 total for another five to six years. Tihanyi would not reveal GM's spending but said the 2010 budget would be largely unchanged from last year. [via autonews - sub. required]