The National Guard has announced that it will close its motorsport sponsorships at the end of 2014, ending its association with Dale Earnhardt Jr in NASCAR and Graham Rahal in IndyCar.
According to a statement, the National Guard's marketing budget for fiscal year 2015 is projected to be just half the figure it had available two years ago.
"Significantly constrained resources and the likelihood of further reductions in the future call for more innovative and cost-effective ways of doing business," said Maj. Gen. Judd Lyons, acting director of the Army Guard, in an announcement.
The decision follows an expose in USA Today in May, in which is was revealed that the National Guard had spent $26.2 million on NASCAR in 2012 and yet failed to recruit a single soldier through the scheme.
It is reportedly spending $32million on NASCAR in 2014, and $12million on IndyCar.
However the National Guard's intention to withdraw at the end of the season appears set to face a challenge from Earnhardt's Hendrick Motorsports team, which claims that it has a year remaining on its current deal.
"Our team has a contract in place to continue the National Guard program at its current level in 2015," it said in a statement.
"We have not been approached by the Guard about potential changes."
Rahal declined to comment on the development during Thursday's IndyCar test at Sonoma, but RLL co-owner Bobby Rahal, whose team beat former National Guard affiliate Panther Racing in an acrimonious battle for the sponsorship contract at the start of the year, said that he is surprised by the decision.
"This is obviously very disappointing news to Rahal Letterman Lanigan Racing 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," Rahal said.
"We will continue to work hard to uphold the honour and integrity of the National Guard throughout the remainder of the season."
The National Guard is a reserve division of the US Army. Its motorsport sponsorship program was the last remnants of a formerly broad sporting sponsorship portfolio that previously included fishing and motorcycle racing.