About an hour or so ago, Dale Earnhardt Jr. announced that he would go to Hendrick Motorsports starting in 2008 for the next five years. But Budweiser -- which has a personal services agreement with Junior through 2008 and was the primary sponsor of his No. 8 DEI car -- wasn't part of the announcement.
The price will no doubt be steep. Little E's primary sponsorship is worth north of $20 million. But Anheuser Buschhas to do it. Why? Because active NFL, NBA and tennis players are prohibited from having alcohol deals -- so if you want to be associated with an athlete, you have to go NASCAR or golf.
With growth in beer sales stagnant, just like soft drink sales, Anheuser-Busch has to be to be more aggressive than ever. They spent the third most of any company -- behind General Motors and AT & T -- in sports last year ($307 million, according to Nielsen Monitor-Plus). Dale Jr. is a drop in that bucket.
There are two things to address here assuming Anheuser-Busch is still sold on the sport. The first is whether the Budweiser brand -- which has been struggling -- is the right brand to promote. It might be worth promoting Bud Light -- which has been one of the few brands to see measly growth. A critic would say that lights are for NASCAR fans.
Secondly, is it worth it to look at other drivers? I'd say no. True, Junior is in a slump. But I believe NASCAR fans are only loyal if a sponsor has built up a certain amount of loyalty. To sign another driver would mean years of buildup before return and investment could be realized.
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