Driver’s ed on the company dime…
As with many professional sports, making it to the top of the professional racing circuit can take years of hard work and plenty of near-death experiences. Michael Waltrip, pictured here with his car, is one of the success stories. Now Waltrip’s company is helping two sons of Aaron’s Rent (RNT) executive Bill Butler train to become race car drivers courtesy of the company. In the proxy that the company filed on Friday, the company noted that Aaron’s is sponsoring Waltrip’s "driver development program" and that the two drivers participating in the program in 2005 are Butler’s sons. But here’s the real kicker: Aaron’s estimates that it paid $890K last year to train Butler’s sons and will spend nearly $1 million this year on the program.
So what exactly are the Butler boys — known as KBIII and Brett — learning for this money? This article that was sent out to Aaron’s franchisees details the program:
During the work week, KBIII and Brett learn about the cars they race and how to build them, repair them and make them perform faster. They train their bodies for the rigors of racing. They learn strategies for winning races. Then, come the weekend, they put it all to the test.
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We’re guessing that since dad — Aaron’s Sales and Lease Ownership President Bill Butler — only made $425K last year, paying twice that amount to teach your sons to be professional drivers was probably out of the question. But getting the company that you work for to pay for that training and counting it as a marketing expense, seems like a very creative use of accounting rules.
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 3 Comments » |
April 10th, 2006 at 11:36 am
Wow almost $0.045 per share in dividends
April 12th, 2006 at 2:44 am
Despicable, disgusting, dishonest, depressing, not to mention a daylight robbery.
Thanks again for the great service – I hope SEC/Spitzer start reading this blog. They would be more productive that way.
April 19th, 2006 at 11:43 am
This is an excerpt taken from Michael Brush’s article from Company Focus on MSN Money.
“The company gets excellent marketing mileage out of the deal, says Aaron Rents finance chief Gilbert Danielson. Local media outlets cover events at stores featuring the Butler brothers before they race in the United Speed Alliance Racing’s Hooters Pro Cup Series. At races, the company has signage, an inflatable storefront and display tents. The driving lessons are part of an overall sports marketing program that will cost the company more than $7.5 million this year.
“Motor sports have been an integral part of our marketing program for a number of years,” says Danielson. “The NASCAR fan is a perfect fit for the demographic of our customer base.” Aaron Rents believes the marketing program has contributed to the company’s undeniable success in recent years. The stock has risen to $27 from $7 over the past five years
But are the driving lessons paying off? Brett Butler places 28th in USAR’s southern division of the Hooters Series, while Ken ranks 32nd in the northern division.
There’s still hope for the Butler brothers though, as they will get close to $1 million worth of training this year, paid for by Aaron Rents. ”
My question, is paragraph 2 above where Danielson says, “The NASCAR fan is a perfect fit for the demographic of our customer base.” a slap in the face to NASCAR fans. Really, what does this say about them. I have been under the impression that mostly people of lower class rent furniture, since they can not afford to buy it. By renting they are paying exorbitant prices for it, so why would anyone want to rent as a choice; unless, of course it is for short term and paid for by a company. I can understand why renting might be preferrable in certain circumstances. But, I don’t think this holds true for the typical customer base for such rental companies.
If I were a NASCAR fan, I think I would dissociate myself from companies like Aaron Rents. I know I certainly wouldn’t do business with them.