Struggling Pharma Fights Perception of Sponsorship
Last week, Tennessee-based Graceway Pharmaceutical announced that it plans to lay off 130 of its 323 employees in an effort to avoid bankruptcy, brought on by what it claims is a competitor's patent infringement. In addition to cutting payroll, Graceway has cancelled matching 401K contributions and is eliminating employee subsidies for things like vision coverage and life insurance.
But in the face of obviously dire constraints, the question that the public and media outlets seem to be asking is how the company could in February renew its NASCAR Camping World Truck Series sponsorship of No. 51 NASCAR truck team, operated by Billy Ballew Motorsports. Such are the problems in public perception that not only companies, but the properties they sponsors, must be prepared to handle.
“Had we been able to guess or foresee that these restructuring events would be necessary, we never would have entered into the NASCAR sponsorship or some of our other marketing contracts,” John Bellamy, executive vice president and general counsel for Graceway, told the Bristol Herald Courier. “Since these contracts are pre-paid, we want some benefit from them, and, consequently, we intend to use the NASCAR sponsorship and other binding agreements to promote our products and a new product which we expect the [Federal Drug Administration] to approve soon.”
Ballew has also had to field questions about the deal.
“There again, their business is their business, and my business is my business," Ballew said. "It’s not of any concern at all to me.”
As for the marketing manager who handled Graceway's NASCAR sponsorship? He is no longer employed by the company.
“If there was any way to recoup $1 [of the sponsor fees] we would," Bellamy said.