The National Guard said Wednesday it will end its sponsorship of NASCAR driver Dale Earnhardt Jr. and IndyCar's Graham Rahal, but it is not clear when that goes into effect.
Hendrick Motorsports said in a statement it has a contract through 2015.
"We have not been approached by the guard about potential changes and plan to honor our current agreement," the team said.
Bobby Rahal, co-owner of Rahal Letterman Lanigan Racing, said in a statement he learned of the guard's decision on Wednesday. He called it disappointing news "given the significant incremental brand exposure we have worked to produce for the National Guard in our first season together, including various off-track marketing and advertising programs focused on supporting the mission set forth."
The guard said in a statement posted on its web site it spent $32 million on its NASCAR sponsorship and $12 million on its IndyCar sponsorship this year, and noted that "sports sponsorships have played an important role in helping the guard build strong brand awareness." But, the guard statement said its sponsorship contracts in NASCAR and IndyCar "are set to expire at the end of the current season," which contradicts the Hendrick claim.
"Significantly constrained resources and the likelihood of further reductions in the future call for more innovative and cost-effective ways of doing business," Maj. Gen. Judd H. Lyons, acting director of the Army National Guard, said in the statement.
Military funding has come under increased scrutiny in Congress as Sen. Claire McCaskill, D-Mo, has called the sponsorship "wasting a bunch of money on a very expensive sports sponsorship."
The guard said in its statement that motorsports is not the only marketing arena to suffer under reduced budgets.
"Since 2012, the Army Guard has reduced sports sponsorships from six — including professional fishing and motorcycle racing — to just the NASCAR and IndyCar sponsorships," the statement said. "In fiscal year 2015, the Army Guard's marketing budget is expected to be about half of what it was just three years ago in fiscal year 2012."
The guard has been with Earnhardt since 2008, when he joined Hendrick Motorsports. NASCAR's most popular driver has won three races this year — including Sunday at Pocono when the guard was on the No. 88 and his uniform as his primary sponsor — and is second in the Sprint Cup standings.
Rahal only landed the guard this season after a prolonged battle with Panther Racing, which had the sponsorship in IndyCar from 2008 through 2013. Although the sponsorship was originally awarded to RLL late last year, Panther owner John Barnes appealed and the review dragged on for months.
The U.S. Government Accountability Office eventually denied Panther's appeal and RLL said in February the guard would be the primary sponsor for Rahal's No. 15 Honda.
Panther Racing has since filed suit against RLL, IndyCar and Document Packaging Brokers, an Alabama-based company known as Docupak that is involved in administering the guard sponsorship agreements. Panther alleges it lost sponsorship valued at $17.2 million a year because of bid-rigging and other improprieties.