Where General Motors leads…

Troubled corporate giant General Motors this week announced that it is severing its nine year sponsorship with Tiger Woods a year before the contract was due to end.

It is a significant step because GM has had its Buick brand on Tiger Woods’ golf bag since 1999. Only a few weeks ago they generated global media coverage when Tiger Woods played the role of caddy for an ordinary club hacker.

Almost simultaneously, GM announced the end of its 24 year partnership with the US Olympic Committee, worth an estimated $5m per year.

Tiger Woods has other endorsement deals and the USOC is in a strong position to attract new partners but the news provides stark evidence that athletes and sports properties at a slightly less exalted level are going to struggle to find corporate sponsors in the coming months.

Sponsorship has become mainstream to the extent that it is now difficult to imagine a televised sports event in most parts of the world taking place without commercial partners. As financial services companies in several countries are currently dependent on government backing, it will be interesting (nerve-wracking?) to see what the future holds for their many high profile sponsorship agreements (for example RBS 6 Nations).

Media reports suggest that GM is in deep trouble so they were probably compelled to cancel their deals but it is clear that retail banks, like a car company, cannot survive without significant marketing activity. What we will learn early in 2009 is exactly where sponsorship ranks among the marketing priorities for company directors when they are under real pressure.

There will also be some difficult decisions to make for governments that are effectively in control of certain banks. Public opinion will be an important consideration. Would the majority of the population rather see sponsorship cut to save money, perhaps crippling some sporting events and institutions? Or would they prefer that sponsorship agreements are renewed because they are fundamental to the business?

Now, more than ever, sponsorship must prove its worth.

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