USF&G, the troubled Baltimore-based insurance giant, is going to cut its work force and dividends but not its commitment to two major sports events.
Its five-year agreement with the Sugar Bowl and its three-year contract with the PGA remains intact.
"Those two programs are in the top 10 of the most effective buys in television sports marketing," said USF&G spokeswoman Kerrie Burch DeLuca. "We consider them long-term agreements and very valuable."
Yesterday USF&G announced a massive cost-cutting plan that includes laying off workers and paying smaller dividends to shareholders. Jack Moseley, president and chairman, has resigned. The company lost $15 million in the third quarter of this year, but remains profitable for the year to date.
DeLuca would not release any figures concerning how much USF&G spends on the Sugar Bowl and the USF&G Classic on the PGA Tour, nor about how much the company makes off them. But she did say they "are money-makers."
"They are assets and you don't cut assets," she said. "They are terrific marketing tools that build relationships with agents, and agents are the lifeblood of the company."
In a separate cost-cutting move initiated earlier this year in the USF&G Financial Services, a subsidiary of the parent company, it was determined that sponsorship in Formula One racing would be discontinued in 1991.
USF&G did not disclose figures, but major sponsorships in Formula One racing begin at about $10 million.
The Sugar Bowl agreement runs through 1995, and Mickey Holmes, the game's executive director, said USF&G will fulfill that obligation.
"We were assured there is nothing for us to worry about," said Holmes. "They called me [yesterday morning] before their announcement, out of courtesy, to make sure we were aware of the changes.
"Certainly, it leaves everyone with a degree of trepidation as they move ahead, but we're talking about a very solid company with a great tradition. They'll survive and grow."
In New Orleans, Thomas Wulff, the executive director of the USF&G Classic at English Turn Golf and Country Club, said the PGA event has a three-year "roll-over" contract. That means if USF&G decided to terminate the agreement tomorrow, the tournament would still go on with the company's support through 1993. The tournament carries a purse of more than $1 million.
"Until a new man is in place and has had time to review everything, no one can give us total assurance," said Wulff. "But Boh Hatter [USF&G's head of advertising] called and said the company felt good that our agreement would continue.
"I think the tournament has been good for USF&G.