Competition Across Sports Pushes Liquor Sponsors Out Of NASCAR

Jack Daniel's Dropping NASCAR Sponsorship For New Platforms To Reach Consumers

Advertising sources said that Jack Daniel's and Jim Beam both leaving NASCAR reflects "increasing competition for the sports marketing dollar in the spirits industry," according to Nate Ryan of USA TODAY. CBS during this year's Grammy telecast in February "ended a self-imposed ban on liquor ads," and since then "more local affiliates have followed suit." Jack Daniel's and Jim Beam in separate statements issued earlier this week both said that they "weren't dissatisfied with their NASCAR investments but sought new platforms for targeting consumers." Primary Sprint Cup sponsorships typically call for three-year contracts, and the top teams command about $20-30M per season. Because companies "spend roughly the same amount on marketing their sponsorship in addition to what is owed to the team, the total price of a multiyear deal can balloon well above" $100M. Sports Business Group President David Carter said, "The marketing options available to the spirits industry, including sports marketing and advertising, have increased and with these added opportunities comes competition for marketing dollars. Some short-term tactical spending may remain in sports, including NASCAR, but not necessarily major sponsorship." Former SMI President & CEO Humpy Wheeler argued that the departure of Jack Daniel's and Jim Beam -- which "adorn cars that are winless this season and didn't qualify for the Chase for the Sprint Cup -- also shows results are critical to sponsors." But Ryan notes spirits will "maintain a presence in NASCAR." Crown Royal earlier this year extended its deal with Roush Fenway Racing's No. 18 Cup entry (USA TODAY, 9/24).