National Guard retreats from racing with Dale Earnhardt Jr., IndyCar

August 7, 2014

That the National Guard will end its sponsorship with Dale Earnhardt Jr. in NASCAR and Graham Rahal in IndyCar comes as little surprise. Just a few months ago, U.S. Sen. Claire McCaskill, D-Mo., called the program a waste of money, and stated that the Guard’s funding had resulted in zero new recruits — and since then, the Guard has failed to produce evidence to the contrary.

Over the past three years, the Guard has sunk $88 million into NASCAR alone, and its IndyCar deal – one that was originally with Panther Racing before switching to Rahal Letterman Lanigan Racing for the start of this season – is a whopping $12 million in taxpayer money annually. What’s most amazing is that, according to Maj. Gen. Judd Lyons, acting director of the Guard, the program had no surefire way to track its success and prove the effectiveness of its marketing campaign.

This led to more critique in the Senate, as well as finger pointing at Guard officials for receiving perks under the sponsorship – such as attending races. Lyons acknowledged that incidents such as this might have occurred in the past.

In a statement posted to its web site, the Guard says it spent $32 million on its NASCAR sponsorship this season, with $12 million going to Rahal's IndyCar team. Despite its inability to prove its effectiveness as a tool for recruiting, the Guard does state that its funding has helped “build strong brand awareness.” Since 2012, it has reduced its sports sponsorships from six – including professional fishing – down to just IndyCar and NASCAR. From next year, the Guard will no longer sponsor any professional sports, with its marketing budget expected to be about half of what it was just three years ago.

Earnhardt Jr., NASCAR’s most popular driver, has been having a stellar season in his No. 88 National Guard machine, winning three races and lying second in the Sprint Cup points standings. Despite Hendrick Motorsport losing a huge chunk of funding, one doesn’t overly worry about Junior going begging; companies will likely be keen to ink a deal with the sport’s most marketable driver, although even for Earnhardt, filling $32 million worth of funding isn't a given. (NASCAR has other worries as well; as SportsMediaWatch reports, 15 of this year's 18 races to date have had fewer TV viewers than a year before.)

In IndyCar, however, the move could be far more unsettling; when Panther Racing lost its Guard funding after six years, a move that has caused team owner John Barnes to file a $17.2 million lawsuit against RLL, IndyCar and Docupak (the company involved in administrating the Guard’s funding), it left the Indianapolis-based squad out of business. One of IndyCar's great challenges comes from the mismatch between the money a team needs to compete and the commercial benefits a sponsor can expect to reap from being involved. This leaves many drivers with the responsibility of picking up the tab, relying on family businesses, corporate connections or angel investors to keep their race seats and career on track.

According to McCaskill, the failing of the Guard to generate leads may have been due to simply reaching the wrong demographic. The National Guard primarily targets young adults between 18 and 24, while the typical race viewer is far older than that: “I’m a NASCAR fan,” McCaskill said in May, “but I don’t think I’m exactly the demographic the National Guard is aiming for.”

However Kurt Busch's girlfriend Patricia Driscoll, founder of the Armed Forces Foundation, called the report of zero recruits "BS," and said via Twitter that "EVERY troop I bring to the rack each week wants to see that @NationalGuard car and take a pic w/it. Even if they know nothing about Nascar."

IndyCar team owner Bobby Rahal calls the news "very disappointing" and states that he only learned of the Guard's departure last Wednesday. As much as the Guard wants members, its move leaves two top racing teams hustling for new recruits of their own, with deep pockets as the only requirement.