Sep 22, 2009 at 05:40 PM
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Jack & Jim Fall Down the Hill; Nascar in Bad Spirits?

Can Bud, Crown, Miller and others back them up?

For the second day in a row, a Nascar team has lost their primary sponsor - in each case a major spirits brand. Yesterday Jack Daniel's announced it would not extend its 5-year sponsorship with Richard Childress Racing's #7 team when the existing deal expires after this year. Today, we officially learned that Jim Beam will not renew its deal to sponsor Robbie Gordon's number 7 Toyota, a deal in place since 2005.

Both liquor companies cited the weak spending environment, a revamped marketing mix and a renewed focus on spending on programs that have more impact on the end consumer.

"While it is difficult for us to end our formal relationship with RCR, the current economic environment has compelled us to re-evaluate our spending, and we've concluded that other areas in the marketing mix require additional investment," said Tim Rutledge, vice-president and brand director for Jack Daniels.

Last week, reported that Jim Beam would not return as sponsor of Robbie Gordon or any other Nascar team in 2010, instead concentrating efforts on sponsoring Kid Rock's world tour.

It's not just teams that are facing the heat. At the beginning of the season Home Depot, Enterprise, Domino's Pizza and Kodak announced they would not return for this year, and more uncertainty lies in 2010 renewals.

"It is a long sales process," Ty Norris, vice president and general manager at Michael Waltrip Racing recently told "But I've been in the business 20 years, and back then, companies had to justify their spend just like they do now. The difference is that the dollars have gone up."

On the team level, properties have increasingly been shopping shared asset models that allow teams to provide partial-season inventory to potential sponsors, thereby limiting cost to sponsor and risk exposure to team. If there's a silver lining this new model could allow a whole slew of liquor (or other for that matter) brands to share assets, or a holding company to spread the expense across multiple spirit brands. In an overly saturated category, there's always up and coming brands, and deep-pocketed holding companies, looking to make a name for their newest products.

On the other hand, some say spirits companies have no business sponsoring racing teams at all. The British Medical Association's proposed regulations could send alcohol advertising in F1 the way of tobacco sponsorships in Britain, where online alcohol advertising has reportedly doubled in the last year alone.

Will Jack and Jim's departure leave Nascar with a nasty hangover or will other spirits step up to the plate? Is there another shoe to drop? If so, tell us what you're hearing!

photo credit via flickr: ?o??ƒx™