Motorola sells off Danica's sponsorship

[MDS]

Motorola has sold off the rest of this year's sponsorship to Boost Mobile and will remain as an associate sponsor through the rest of the year. You can see an image of the car here: http://www.boostmobile.com

Also, she is in talks to stay with AGR beyond the end of the season.

Andretti Green Racing co-owner Michael Andretti says he's discussed a contract extension with driver Danica Patrick, who's in the final year of her deal with the team.
"Yesterday," Andretti said when asked if there was a time frame to complete the process. "Unfortunately, it doesn't work that way. I've talked with her directly and she has expressed that she really wants to be here and we want her to be here."
http://www.indycar.com/news/?story_id=13790

I suppose this could cut either good or bad for next year. I'm almost certain Motorola saw Danica's sponsorship as a saleable asset this year. Their sales have dropped 50 percent and the cash position dropped $1 Billion last quarter, so anywhere they can raise cash on hand they will. Also they probably cut Boost a break in order to remain their primary phone supplier.

It's going to be interesting to see what happens with the cellphone market as the growth potential finally gets tapped out. One of my partners got on the trend early and made about $2 million from 1997 to 2002, and then he turned 24. He sold his stores and cashed out of the business in 2005. Basically everyone who can have cellphone has a cellphone, so an industry that routinely saw 30 to 40 percent growth rates is now going to have to live on a 3 to 5 percent growth rate. It's going to hurt a lot of companies. Samsung, Nokia, both potential big name sponsors at one point won't be putting out any new cash for a while.

[nigelred5]

I don't know about you, but I get a new phone every year, two if I really happen to like the phone I have or I was foolish enough to sign a two year contract. i can't wait to get rid of the pos LG phone I have right now.


Motorola's last couple products have been lackluster and no match for the multimedia/ entertainment type phones and blackberrys. they have no decent answer for the Iphone and blackberry wannabe's, and with Verizon negotiating with Apple again for a version of the Iphone, I don't see Moto being much of a player for very much longer.

[MDS]

It could be just Motorola, but Samsung, which makes LG, Sony Ericsson, and Nokia are both down too, and its not just the recession. That whole industry is going to contract and the big profit years are behind it. It's still a good industry to be in, but its not the gold rush it was 8-10 years ago.

Andrew, my business partner, started selling cellphones as a 18-year-old high school dropout and made his first million by age 20. That kind of opportunity doesn't exist anymore in that field. There's still going to be turnover because the average lenght someone holds on to a phone is 18 months, but eventually the entertainment/internet capabilities of these new gen phones will peak, the price will come down and then they'll have to find a new profit driver.

[Gluaistean]

There is an article on a website about "Danica Patrick, the Indycar sensation". One race win and she is a sensation. Doesn't seem to have done much for Motorola. I bet GoDaddy does better.

Once she hits 30, then those shots of the non made up face and filtered photos will cause her to loose appeal as a sex symbol which she has been used as to market the IRL.

The IRL would have been better off funding Sarah Fisher from the start as she showed more talent on ovals and I bet would have a couple of wins to her credit right now.

[Hoop-98]

This may be silly but when I see a headline, man has 14 toes, i expect to see a picture of a man with 14 toes. Not a picture of a skunk with 14 toes and an opinion that if a skunk has 14 toes, there must be a man out there with 14 toes too.

Where is there anything about Motorola selling off Danica's sponsorship in the links?


rh

[beachbum]

Where is there anything about Motorola selling off Danica's sponsorship in the links?
rhThere isn't anything stated that Motorola sold the sponsorship. But it isn't at all uncommon for a sponsor to sell off a package to try to reduce their own financial commitment. It is often promoted as a b2b deal and even companies like Target do it to some extent. Technically, Motorola is probably still the "sponsor" with the commitment, but Sprint through Boost is likely now putting up the money.

Motorola is in serious financial trouble and almost no one expects them to be back new year at the level they are now, if at all. With the latest change, the question becomes will Boost take their place or will AGR again be scrambling for sponsors? They already have enough trouble getting sponsors for Marco. The key new buzz word is "activation" and while GoDaddy has gotten some activity from using Danica, she hasn't done much for Motorola beyond name recognition. In today's environment, that may not be enough.

If it looks like a duck, quacks like a duck and walks like a duck, it probably isn't a chicken. The analysis by MDS seems very reasonable.

[MDS]

I don't know what it is that you want hoop. Sports writers aren't typically business savvy, nor are they particularly strong critical thinkers. They see a sponsorship announcement like this and they think, "Great I've got a quick story with art." It's not really in most of them to look at the underlying reasons why Motorola is selling off their sponsorship obligations before the largest race of the year.

If you want to know more about Motorola, their CFO, who was fired in January, is currently being sued by the company for a supposed $37 million extortion scheme.
http://online.wsj.com/article/SB124095826503765629.html

Add in that Motorola just had a very angry sharholder meeting where the shareholders took exception with executive pay packages, among other items. The company countered with a slew of cutbacks, including rollbacks in executive pay, a company-wide salary freeze suspending matching contributions to employee 401k.

Andrew, who still follows the business pretty closely, said Motorola likely gave Boost the sponsorship at a cut rate so they would have a better chance of having their phones picked up by Boost, and its parent company Sprint. Earlier this year there new release, the "Evoke" was only picked up by Altel, so of course they didn't sell as many, lost face in the industry, and had to lower their price to Altel and the whole thing was a massive flop.

But yeah, don't expect sports writers to put that together.

[SarahFan]

I think Gary owes me a sixpack

[Gluaistean]

I think Gary owes me a sixpack

Tell you what, outside of Wilson, Doornbos, Tracy, Tags and any of the other former Champcar guys I'll be rooting for Sarah Fisher.

I know you're probably laughing because of all the names but, her personality is what this league needs to succeed. She is just a nice person with a great personality and a will to win. What happened last year was terrible. If she looked like Patrick with all the makeup her sponsor would probably have shown up.

Anyway, on topic, I don't think that Motorola will be back. There is a rumor that Vodafone may come to the US.

If betting was legal in this country there would be sponsors everywhere. I look at the English Premier League and see all the teams teams that have gambling companies as their sponsor. Sobet, Paddy Power, Manor and so on. Each contributing more than $10 million per year.

[Chamoo]

Though I don't like Danica Patrick, I'll agree she is an asset to the IRL. Having her stay in the IRL with AGR or any other team would be a strong benefit to the league, which I think is nessicary. We can't let her get to Nascar as they will strongly market her, and I think it would be a big blow to the ICS.

[Hoop-98]

Sorry for bitchin...

Now lets get some sunshine

[DanicaFan]

I talked to TJ, Danica's dad today. He said that Motorola is still with the team however he was not sure about next year. He did say that Motorola is also making a phone specifically for Boost Mobile.

[BobbyC]

Boost Mobile is the prepaid division of Sprint (NYSE : S). Historically, Sprint's Nextel brand has been exclusively with Motorola, and Boost was part of Nextel at the time of the 2005 merger of Sprint and Nextel.

So this is just a continuation of the historic Nextel-Motorola partnership where Motorola was the exclusive supplier of Nextel's phones.