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GM and Tiger Woods end partnership

Filed Under Sponsorship 

General Motors and Tiger Woods just announced that they have ended their five-year partnership a year early. The split was amicable as GM is able to cut costs while Tiger Woods can spend more time with his family especially with a second baby on the way. In total, the two have partnered up for the past nine years and the recent contract was worth $40 million. By ending the deal early as well as eliminating ads for the Super Bowl and Academy Awards, GM is able to cut unnecessary costs.

Tiger Woods had been the face of the Buick brand for those nine years. While the loss of Woods will hurt the amount of publicity Buick receives, the fit between the two never seemed quite right. Darren Rovell at CNBC was never impressed by this partnership.

The problem came from the very beginning. For one, it’s nearly impossible for any individual to help change the way someone thinks about making a $30,000-plus purchase. Car endorsements won’t work in the way shoe and sports drink endorsements will. So paying Tiger what they did for an unrealistic goal was never good business.

Then comes the fact that I feel like General Motors didn’t do much to help Tiger. It would have been easier if the Escalade was Buick’s instead of Cadillac’s. The Enclave didn’t exactly do it for me.

And finally, the fact that you can’t believe that Tiger—if given a choice—would really drive a Buick? This was the greatest problem. Sam Walton and a couple rich people aside, who voluntarily drove cars that were not in their class, it’s not reasonable to think a guy who is as rich as he is would want to drive a Buick. (I always pictured Tiger having secret garages in all his houses). That was the flaw.

The biggest loss may come with the Buick Open as Woods is not required to come. The tournament is hoping that Woods will attend should he be healthy next year. While Woods will return to the tour in 2009, he won’t be 100% until 2010. GM’s title sponsorships of the Buick Invitational and Buick Open run through 2010. This year’s Buick Open had a much lower attendance due to Woods’ absence so I wouldn’t be surprised if the end of the Woods-GM partnership leads to the end of GM’s title sponsorships as well, possibly even early. GM is trying to cut other golf costs as well including golf ad spending.

Last week, Larry Peck, Buick and Pontiac’s promotions manager, told Reuters that everything at the automaker was fair game for cuts in spending. He added GM already has canceled such back-of-the-house spending as dealer contests and hospitality at its golf events.

GM cut its golf ad spending by almost 54 percent to $10.8 million in the first six months of 2008, according to TNS Media Intelligence. Its spending on sponsorships, mostly focused on sports, also is likely to be down from last year’s $235 million to $240 million range, IEG Sponsorship Report said.

Both sides will re-evaluate potential partnerships for future deals, but don’t expect Woods to jump back into the auto industry right away and GM may stay away from sport stars until it’s financial forecast starts to look up.

It’s not likely he will fill his endorsement portfolio with another car company any time soon, Mr. Carter said. “There’s no urgency there,” Mr. Carter said. “To quickly realign with another automotive [marketer] doesn’t help his brand that much. It makes it look like he needs the money — which he doesn’t — or he wants to maintain a relationship with the industry itself, and at this point in time that’s not a priority with either side.”

Of greater concern, Mr. Carter said, is how auto companies will use sports stars going forward. “You have to step back and wonder to what extent any deals being considered are going to be tabled at this point,” he said.

It does sound like the deal did lower the age of individuals purchasing Buick vehicles so it wasn’t a loss, but the amicable split makes sense for both parties. In terms of PR, this will help GM show that it is trying to remove items from its budget that don’t have a high and/or proven ROI as it tries to get a bailout plan approved from Congress.

Comments

One Response to “GM and Tiger Woods end partnership”

  1. Picks of the Week | The Business of Sports on December 1st, 2008 2:42 pm

    [...] Other:  Sponsorship Dollars – In the past week, we’ve had GM end their relationship with Tiger Woods and rumors about Citibank backing out of their naming rights deal with the Mets.  Is this the start of a significant trend for the industry, or just isolated instances reflective of specific company troubles.  We’ll find out over the next few months! (Update: a related post on this topic can be found here) [...]

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