September 13

This Day in History

Automotive

Sep 13, 2004:

Oprah gives away nearly 300 new cars

On this day in 2004, TV talk-show host Oprah Winfrey gives a brand-new Pontiac G-6 sedan, worth $28,500, to everyone in her studio audience: a total of 276 cars in all.) Oprah had told her producers to fill the crowd with people who "desperately needed" the cars, and when she announced the prize (by jumping up and down, waving a giant keyring and yelling "Everybody gets a car! Everybody gets a car!"), mayhem--crying, screaming, delirium, fainting--broke out all around her. It was, as one media expert told a reporter, "one of the great promotional stunts in the history of television."

Alas, scandal wasn't far behind. For one thing, the gift wasn't really from Oprah at all. Pontiac had donated the cars, paying the hefty price tag out of its advertising budget, because the company hoped that that the giveaway would drum up some enthusiasm for its new G-6 line. (To this end, during the segment, Winfrey herself took a tour of a Pontiac plant, gushing over the cars' satellite radios and fancy navigation systems.) The car company also paid the state sales tax on each of the automobiles it donated. However, that still left the new-car recipients with a large bill for their supposedly free vehicles: Federal and state income taxes added up to about $6,000 for most winners. Some people paid the taxes by taking out car loans; others traded their new Pontiacs for cheaper, less souped-up cars. "It's not really a free car," one winner said. "It's more of a 75 percent-off car. Of course, that's still not such a bad deal."

Two months later, Oprah hosted another giveaway episode, this one for teachers from around the country. Their gifts were worth about $13,000 and included a $2,249 TV set, a $2,000 laptop, a $2,189 washer/dryer, sets of $38 champagne glasses and a $495 leather duffel bag. This time, the show's producers had learned their lesson: they also gave each audience member a check for $2,500, which they hoped would cover the tax bill for all the loot. Unfortunately, it didn't quite--most people in the audience owed the Internal Revenue Service between $4,500 and $6,000--but the PR gimmick worked: Oprah's giveaways have earned some of the highest ratings in the program's history.

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