The Frontstretch: Budweiser's Big Blunder: Why The Driver Makes The Sponsor, Not The Other Way Around by Mike Neff -- Monday July 16, 2007

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This past weekend, one of the biggest driver/sponsor divorces in recent memory became public knowledge: Dale Earnhardt, Jr. and Anheuser-Busch, specifically Budweiser, will end a nine-year marriage following the conclusion of the 2007 season. The only primary sponsor that Junior’s ever had since he moved up to the Cup series as a part-timer in 1999, the magnitude of this change can’t be underestimated; Junior Nation is famous for the amount of red Budweiser gear that they wear in the stands, sporting clothing and souvenirs that are about to become little more than collector’s items just a few short months from now. Clearly, this change will be a huge adjustment for Junior's legion of supporters, an adjustment that will literally change the color of the stands on race weekends as the new sponsor weeds its way into clothing collections all over the country. But while the rest of us adjust, there’s one part of this fairy tale that can’t make just a few minor changes in order to live happily ever after – the impact Budweiser will have on the sport. In a move that’s turned into one of the biggest sponsor/driver divorces in the sport's history, Anheuser-Busch appears to be the biggest loser in a decision they should have been more hesitant to agree to; for when the amount of exposure they’re about to lose is taken into consideration, you can’t help but feel sorry for a sponsor about to have a large chunk of its marketing value taken away.

It’s been reported over the past week that Budweiser was not even ranked in the Top 5 financially in terms of money spent to receive exclusive placement on the car as a primary sponsor in Nextel Cup. While they haven't been paying the most money, however, Budweiser is by far getting the most exposure of any car in the garage. According to Joyce Julius and Associates, a company based out of Michigan which tracks the amount of exposure a sponsor received during sporting events, Bud received over $180 million in exposure during the 2006 season. That was roughly $60 million more than second place Lowe's Department Stores, the primary sponsor of Jimmie Johnson's race team. Those numbers are simply continuing a longterm trend; Julius has also stated in the past that Budweiser has been the number one sponsor in terms of exposure since they moved to Junior's car in 2000. With those numbers in mind, it is very surprising that the company receiving the most exposure in the series, by far, would not feel justified in increasing their investment to stay with their best celebrity spokesperson, continuing what would be the most successful driver/sponsor marriage in the sport.

So why did this change happen? There appear to be several factors involved in this decision by Anheuser-Busch, Hendrick Motorsports and Dale Earnhardt, Jr. First off, there are rumors that Hendrick is going to be expecting $30-$40 million to have someone put their name on the hood of the car that Junior drives. Apparently, Anheuser-Busch was not even paying $20 million to be in that position with DEI. Having to nearly double their expenditure on NASCAR sponsorship was a very tall order, and the folks at Corporate Headquarters may be feeling they could get more value for less investment with another driver. Secondly, when Anheuser-Busch left Hendrick to move over to sponsor Junior, the split was apparently not as amicable as some would make you believe. That’s a shame, for when hurt feelings or bruised egos are involved in this business, it always ends up a more appealing option to move on than to try and mend fences already splintered apart.

Most importantly, though, when looking at the switch from Junior’s perspective you can understand perhaps the biggest reason he’s OK with making a change – the man is simply trying to position himself to expand his marketing possibilities. With an alcohol sponsor on the hood of his car, Junior is limited in his options for marketing to underage fans. But by switching to a sponsor like Pepsi, as is so heavily rumored, the 32-year-old can now appeal to all age demographics, making himself more accessible in endorsement packages because there won't be any concerns by potential sponsors about the negative impact of being associated with alcohol. The motives are clear; as part of this move, Junior seems to be attempting to make himself not only a national personality but an international phenomenon. The recent deal he signed with Adidas is an example of that, a partnership that’s clearly designed to target a global marketplace. While Adidas footwear can be found in any old shopping mall nearest you, the range of the company is impressive; Adidas is a far more recognized brand on an international scale than it is in the United States. With that base to work from, there is a very distinct possibility that Junior's marketing efforts may begin to push into other countries more aggressively in the near future, especially as he begins to work with Adidas on his proposed clothing line. Should this venture prove successful, expect other international sponsors to hop on board with Junior…all while Budweiser becomes a rather envious observer on the sidelines.

Believe it or not, there is actually some historical perspective in NASCAR on a switch like this one. In 1986, one year after winning a championship and placing second in the points, Darrell Waltrip left Junior Johnson to go race for Rick Hendrick, who was going into his fourth season as a car owner and had not had a driver finish higher than third in the point standings. Ironically, Waltrip was leaving a relationship with Budweiser at the time to switch organizations, arguably as the most popular driver in the sport at the point in time that he made the switch. It didn’t take long for the sponsor to recover, though; beginning in 1987, they found themselves aligned with another one of the sport’s true superstars in Terry Labonte.

There are several other driver/sponsor pairings that have become synonymous with each other over the years. Richard Petty and STP is obviously the first and most famous. Jeff Gordon with Dupont is the current senior partnership, with their relationship going all of the way back to 1992 when Gordon debuted in the Cup series. Tony Stewart and Home Depot is another pairing that are intrinsically linked by the longevity of their marriage. The identification with one driver and one sponsor can become an advantage, giving the fans a uniformity in their appearance as they cheer for their favorite driver. For example, the sea of orange that follows Stewart around or the red nation that follows Junior allows fans to easily identify fellow fans of their drivers and gives them a kindred spirit. Now, that easy “we know what your car looks like” mentality is quickly throwing itself out the window. By switching sponsors, the fans are going to have to decide where their loyalty lies – to the driver or the sponsor that represents them. Let’s face it – when you’re a fan faced with the choice of driver versus company, it’s usually the human that always wins. For the most part, loyalty sticks with the driver, and a whole legion of dedicated supporters will simply look to acquire all new livery in order to show their support. It will obviously be a marketing boon to Junior to have the majority of Junior Nation switch over to the colors of his new sponsor and start wearing a new set of colors to match his paint scheme; hopefully, that transition will come sooner rather than later.

There is no doubt that NASCAR fans are a loyal bunch. They are loyal to sponsors and loyal to manufacturers, but they are mostly loyal to their drivers. While it will be a very difficult change for some of them to accept, most of his fans will follow Junior and sport the colors of whatever sponsor he ultimately aligns with – meaning the sea of red Budweiser shirts supporting Junior will quickly and painlessly disappear over time. In short, it’s a great move for the Intimidator’s son; this decision is going to make Junior a much more marketable personality, signaling a whole new level in his exposure to both fans of the sport and to non-fans, as well. As for Anheuser-Busch, they will certainly maintain a presence at the track, but the decision to not stick with their man will undoubtedly result in a lot less exposure for them. Whether that will have a negative impact on their bottom line, only time will tell.

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Jada
07/17/2007 03:24 AM
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Very insightful thoughts.
What do you think about Elliott Sadler reuniting with M&M’s ? Neither driver nor sponsor has been the same since disassociation. Can he “go home again?” I don’t think so. What little credibility the driver has left would be lessened by attempting to regain “sweet notariety” so carelessly undervalued.

Some divorces are just plain final.

Rick
07/17/2007 05:13 AM
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What about the negative impact that a driver like Kyle Busch will make for Bud? It is rumored that he will be driving for DEI next year. Not too many supporters of that lad.

Ed
07/17/2007 05:54 AM
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When DW left Junior to go to Hendrick he was “arguably, the most popular driver?” Who are you kidding? Arguably, indeed!

aircrewman
07/17/2007 06:58 AM
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GO KYLE!!!! I hope & pray he signs with DEI he will run better..and win more races than Stale Beerfart jr!!! and how fitting to be booted from a team to end up at the team for who you you had to leave (JR.CRYBABY IT’S MY DADDYS TEAM & I WANT TO CALL THE SHOTS) then to do better than him and win races. IF Kyle signs with DEI today I’M buying #8 BUD stuff !! IF thats the # and sponsor he runs

ronclaussentees
07/17/2007 07:29 AM
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I still have a lot of #8 red tees and more..they have been my top seller, next to Jeff.. Hey aircrewman, I have to donate the Busch’s tees to good will, because they don’t sell…

Steve M.
07/17/2007 08:51 AM
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Some good points were made in this article. I’ll say that when Rusty Wallace retired, not that I’m a huge Rusty fan, I was seriously considering switching from my favorite brand of beer, Miller Lite, to just about ANYTHING else. Only because I do not like, nor ever foresee myself liking, either of the Busch brothers. Fortunately my taste buds won out in the end and I am still drinking Miller Lite. All I can say is that I’m happy that Kurt hasn’t been doing any commercials to promote Miller Lite. If that were to happen I may still have to consider switching brands.

Scott
07/17/2007 09:10 AM
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Aircrewman:

Sounds like it is time for you to take your medicine. Maybe then you will calm down and start thinking straight and realize what an idiot Busch is.

Disenchanted
07/17/2007 09:21 AM
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All the stuff that has happened this year has opened my eyes to what Junior actually is. He is a USER who uses his rabid fans and tells them what they want to hear so they can do his dirty work for him. Everyone says he is so real, to me he is no better than a politician trying to get votes. But then again he doesnt have much real driving talent and is extremely lazy so he has to rely on something to sell the merchandise, and that ladies and gentleman is the only reason Rick Felon Hendrick has hired the man, his marketing ability.

8isnotgr8
07/17/2007 09:28 AM
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Unlike the delusional ones who think Teresa does nothing but scheme up ways to destroy Jr I think Jr and his puppetmaster sister are out to destroy Teresa because they are so jealous and hateful that she had a better relationship with Dale Sr than they did. They should invest in some psychotherapy.

CYNTHIA
07/17/2007 09:38 AM
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Sounds like Disenchanted is a “woman” scorned. My question is….

I guess the 2 back to back Busch series championships, 17 Nextel cup Career wins,72 top 5’s and 116 top 10 finishes warrents Dale Jr. not having ANY real driving talent?

Bob
07/17/2007 09:52 AM
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Another past link was Bill Elliott and Coors. What identification has Coors had since? When Bill went to Bud and Junior Johnson, quite a few fans followed. While I don’t think that his fans abandoned Coors, I too don’t understand why these sponsors severe that “magic match” that, in monetary terms, can’t be bought. These happen as a part of that special occurrence, or event, or era that comes along not that often.

Like you mentioned Petty/STP, Earnhardt/GM Goodwrench, Gordon/DuPont.

Jr. undoubtedly is splitting because of the difficulties of advertising with an alcohol sponsor. But, who is to say that he wasn’t the “match” with Bud, and those fans who drink Bud beer are more apt to be rabid and loyal, where as if he gets sponsored by Kleenex , or whoever, that fans won’t get as passionate about showing those colors as they would with Bud.

That 180 million of ad face time is too easily being discounted. There is no way that Lowe’s gets anybody fired up except for JJ winning quite often. When Jr. runs around in 30th fans and the announcers still get excited.

Bud would be real lucky to get this magic back ever.

kris alfonso
07/17/2007 10:44 AM
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I agree totally with Bob’s observations. There is just something almost “passionate” about Dale Jr & Bud. I’m an older fan of racing and yes I drink beer. Bud to be exact and it’s because of Jr. I’ve bought tons of Bud/Jr gear over the years and I’m not just talking tee shirts. I honestly don’t think I’ll be quite as gung ho about Pepsi or whoever the new sponser will be. I have more disposable income than I did in my twenties and I think they’re making a mistake going after a younger demographic. I really can’t see spending my bucks on Pepsi swag.
Don’t get me wrong, I’ll still cheer for Jr cause he’s my driver but I’m not sure how much my heart is going to be in it for awhile anyway.
Oh yeah and if Bud goes with Kyle, I guess I’ll have to start drinking Coors.

William T.
07/17/2007 11:12 AM
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I agree with Bob and Kris…….how many 10 year olds do you see running around with a fat wallet, buying up racing gear?? Why would you want to advertise to a demographic that doesn’t have the money to buy your stuff? The whole argument that he is trying to broaden his marketability doesn’t make sense. I think there are more underlying issues than the public knows as to why Bud & Jr. are splitting, and it’s definitely not so that he can advertise to a younger crowd….

stanman
07/17/2007 11:16 AM
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I think his ‘lifestyle makeover’ always included droppng Bud. I think he wanted to drop DEI, his sponsors AND his fans. I don’t think he actually wants to ‘free the 8’ either. It will be interesting to see if his ‘lifestyle’ makeover works and whether his fanbase increases or decreases.

Dennis
07/17/2007 12:35 PM
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Pepsi, yuck. Coke is much better. Plus Jr. can keep his Red color scheme.

Andrew C. Eisenberg
07/17/2007 12:53 PM
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Dennis,

While Coke would be a good match, I don’t think it’s going to happen. Remember, Jeff Gordon is already a Pepsi spokesman and runs a couple of races a year in a Pepsi paint scheme.

BTW I drink Pepsi products despite Jeff Gordon hawking them. My favorite ad was when that little girl, Hallie Eisenberg (no relation), and her grandpa passed Gordon on the track on a BICYCLE. :-)

HankZ
07/17/2007 01:34 PM
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…you can’t help but feel sorry for a sponsor about to have a large chunk of its marketing value taken away….
Pfffft! You’re kidding, right? C’mon Mike. A multi-billion dollar company (2bil income in the last 12mos) “loses” a couple mil ain’t gonna hurt. It’ll be especially easier to swallow when Jr won’t win the championship next year. $40 mil for sponsorship, as you report, is rediculous. Hendrick is nuts to require that! I know I would’nt spend it. Anheuser-Busch made the right call.

Will
07/17/2007 04:57 PM
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Decent article, just a couple things. 1. DW was popular in 1986, but not one of the most popular drivers. Ever hear of the boo-birds? 2. Tim Richmond was not driving the Budweiser Car in 1987. He was driving the #25 Folgers car. Terry Labonte was driving the #11 Bud car for Junior Johnson.

Managing Editor
07/17/2007 09:10 PM
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Will,

Thanks for the catch! The error has been corrected and the article adjusted.

Thanks for reading and writing in!

RJ
07/17/2007 11:05 PM
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What a joke. I have never read more hog wash in my entire life than in this piece. Junior has never, and will never live up to the hype or the money!

David
07/17/2007 11:32 PM
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Do you really beleive Budweiser is going to miss little Earny,when they were an associate sponsor on the Williams F1 team they were spending 30 million a year. And beleive me the day will come when Hendrick will regret getting rid of Kyle,Richard Petty said Kyle had more raw talent than anyone he’s seen since Tim Richmond, and the kid is only 22 year’s old. When he’s 28-30 he’s only going to be awesome as hell and where is Hendrick’s driver’s going to be “retired”.

 

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