SBD/October 2, 2013/Marketing and Sponsorship

Penske Racing Signs Extensions With Keselowski, No. 2 Primary Sponsor Miller Lite

Penske Racing has signed new deals with driver Brad Keselowski and Miller Lite that will keep last year’s Sprint Cup champion and sponsor together through ‘17. The new sponsorship agreement extends a partnership that Penske Racing began in ‘91 but ends Miller Lite’s 23-year run as a full-season primary sponsor. Under terms of the deal, Miller Lite will go from sponsoring 36 races to 24 races on the No. 2 car known as the “Blue Deuce.” Miller Lite’s current sponsorship is valued at more than $13M a year. Financial terms of the extension were not available, but sources described it as a “significant” increase. The deal includes a one-year option for ‘18. Roger Penske, who declined to discuss terms of the deal, said that he asked Miller Lite execs to reduce the number of races the brand sponsors so that Penske Racing could increase its revenue by finding one to two other sponsors for the remaining 12 races. Penske said, “I said, ‘It gives you a chance to stabilize your spend and not look at annual increases, and it gives us a chance to take that real estate and find people who want three, four, five races.’ It’s a win-win. It gives them stability with us and opens the door for us to get more sponsorship revenue.” Miller Lite was in the second year of a three-year deal with Penske Racing when Penske approached MillerCoors execs about a renewal. MillerCoors CMO Andy England said that the brand did not want to give up 12 races but agreed because it wanted to remain partnered with the team and recognized the team wanted to increase its revenue. England added, “We firstly wanted to be partnered with (Roger Penske) for a long time to come. Secondly, we want him to be successful. We want to enable that success. … For a NASCAR team and driver to be successful, they have to have the right team behind it (and) the right equipment.”

LOOKING TO REBOUND NEXT YEAR: Coming off last year’s Sprint Cup title, Keselowski has struggled in the No. 2 Miller Lite car this year. He failed to win a race and he became only the second defending Cup champion to fail to make the Chase for the Sprint Cup Championship. Penske and Keselowski believe the combination of a long-term deal with Miller Lite plus two other sponsorships will boost the No. 2 team’s revenue and allow it to invest in improving the car in coming years. Keselowski: “The naked eye looks at this as going from 36 to 24 (races). The initial reaction to that is that this is a reduction to the sport. But that’s not how things are working here. This is a strategic play. … What this does for us is open up 12 races to increase sponsorship and revenue base for our team, which we think is going to make us more competitive.” He added that the sponsorship extension and his contract extension will help him improve as a driver, as well. “When you have a deal extended long-term, this is beyond myself, this is sponsorship, you can put that out of your head. When you can put those out of your head and focus on the task at hand, performance, that can be healthy for the team. You can become more focused.”

SALARY INCREASE AS WELL: Keselowski, who is represented by John Caponigro of Sports Management Network, also got an increase in salary under his new deal. Penske said that some of the increase in costs for the No. 2 team will be because of driver salary. He added, “One of the good things is we pay our drivers based on performance. To (Keselowski’s) credit, he did not come back after he won the championship and knock on our door and say, ‘You have to increase my salary.’ That’s the type of guy he is.”
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