Major sponsorship deals indicate NASCAR economy is turning

Posted by imelda sovzky on Thursday, February 2, 2012

Major sponsorship deals indicate NASCAR economy is turning
Feb. 2, 2012

By Reid Spencer
NASCAR Wire Service

At last, there's a large patch of blue to break up the doom and gloom that has clouded the NASCAR economy for the past three seasons.

To major corporations, there is still a strong perceived value in association with NASCAR teams and with the sport itself, but the focus of those commitments has changed, along with the numbers of dollars sponsors are willing to allocate to motorsports marketing.

During the late-January NASCAR Sprint Media Tour in Concord, N.C., Penske Racing announced the extension of its agreement with MillerCoors, whose Miller Lite brand is the primary sponsor of the No. 2 Dodge driven by Brad Keselowski.

Penske also has a multiyear deal in place with Shell/Pennzoil, another major long-term player in NASCAR racing and the sponsor of AJ Allmendinger's No. 22. Team owner Roger Penske did allow, however, that the annual price of a Sprint Cup sponsorship  is more likely to fall in the $12-$15 million range, rather the $25-$30 million figures bandied about during the rise of the sport's popularity in the previous decade.

Earnhardt Ganassi Racing has no more sponsorship inventory available on the Chevrolets driven by Juan Pablo Montoya and Jamie McMurray. In fact, Belkin, Liftmaster and Banana Boat extended their involvement in the sport to include primary sponsorship on McMurray's car in selected races.

All told, McMurray will have five primary sponsors this season, with Bass Pro Shops and McDonald's on the hood for the majority of the races. Montoya's car is sponsored by Target, whose relationship with team owner Chip Ganassi spans two decades and three series -- Sprint Cup, IndyCar and Grand-Am.

"How about my sales team?" Ganassi said. "There are no primary placings available on our cars. They've brought back (our current sponsors) and brought these new people to the sport. I want to give a call out to our sales guys. What a great job they've done."

Ganassi's cars are fully subscribed despite 2011 points finishes of 21st (Montoya) and 27th (McMurray), a performance Ganassi described as "pathetic."

Sponsorship news also led the program at the Joe Gibbs Racing stop on the Media Tour, with team owner Joe Gibbs pointing to contract extensions on the part of all three of his primary Cup sponsors -- Home Depot, FedEx and M&M's.

Walmart, courted for years by NASCAR and NASCAR owners, finally took the plunge, announcing a one-race deal for 16-time most popular driver Bill Elliott at Daytona in July in a Chevrolet built by Turner Motorsports.

Hendrick Motorsports also is flush with sponsorship for the 2012 season, prompting team owner Rick Hendrick to assert, "I feel the best I've felt about the economy in a couple of years. From the automobile side (Hendrick dealerships), we had the best year we've ever had in the history of our company.

"When you look at the fans, the excitement around Homestead, the championship -- our sponsors are here; we've spent the past two days with them -- and the excitement's there . . . It feels better."

Remember, too, that Sprint announced an extension of its title sponsorship of NASCAR's top series through 2016, welcome news as NASCAR negotiates TV contracts with its broadcast partners, with current agreements coming to term after the 2014 season.

That's not to say that the picture is uniformly rosy. Roush Fenway Racing is down to three full-time Cup cars in 2012 and still hasn't announced sponsorship for Ricky Stenhouse Jr. and Daytona 500 winner Trevor Bayne in the Nationwide Series -- even though Stenhouse is the defending series champion.

With driver Clint Bowyer's departure and a sponsorship gap in the Cup series, Richard Childress Racing doesn't plan to run four full-time Cup cars this year, though the No. 33 Chevrolet will be on track for at least the first five events of the season.

In fairness to RCR, the organization will field as many as 10 entries across all three of NASCAR's national touring series on certain weekends. RCR has absorbed the Nationwide operation of Cup driver Kevin Harvick -- providing full-time rides to Elliott Sadler and Austin Dillon in addition to an all-star car driven primarily by Cup drivers, starting with Tony Stewart at Daytona.

In addition, RCR will field its own Camping World Truck Series teams as Ty Dillon attempts to succeed brother Austin as series champion.

A major change in the sponsorship landscape involves the expectations of companies that invest in NASCAR racing -- and demand a measurable return. Sponsorship is no longer merely about paint on a racecar or TV exposure numbers provided by Joyce Julius, the company that specializes in the evaluation of sports sponsorships.

Business-to-business relationships are critical. When Shell/Pennzoil opted to move from RCR to Penske in 2010, a significant part of the deal was Penske's agreement to fill the crankcases of the cars at his dealerships with Pennzoil.

In today's climate, car owners who can't offer a B-to-B component  to a prospective sponsor are at a distinct disadvantage.

Equally important are sponsor relations, and that means both creative activation and cooperative drivers who are willing to go the extra mile in promoting the products that fund their racing efforts.

Yes, the NASCAR economy is improving, but there's still much progress to be made, as owners figure out, at varying speeds, the nuances of the new paradigm. Steve Phelps, NASCAR senior vice president and chief marketing officer, stressed the importance of the balance between containing costs and money sought from sponsorships.

"We're trying to control costs as much as we can," Phelps said. "The revenue portion of it, which is sponsorship, I think continues to gain momentum. And although we certainly have a number of cars that have inventory that's open, if you look at the companies that are coming in, look at the renewals that are happening . . .

"I think the Sprint renewal was very important for the sport. It's important for the sport because it gave confidence to everyone else. Sprint's business has been challenged, and they're doing a great job of coming back from it, and this sport was so important to them that they're going to invest $100 million a year in it and continue for another five years.

"So do I feel it's turning? Yes, I do. Are we exactly where we want to be? No. The economy's still tough. We're not where we want to be, but we're certainly moving in the right direction."

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