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SBJ/May 11 - 17, 1998/No Topic Name
All-star paint jobs fuel sales for NASCAR toys
Published May 11, 1998
They are the alternate jerseys of motorsports: gimmicky color schemes meant to drive sales of licensed products and serve sponsors’ changing needs.
When NASCAR’s top drivers pull to the start line for the sport’s all-star event – The Winston –in Charlotte on Saturday, several will do son in cars that look nothing like the ones they drive the rest of the season.
Typically, they do it so collectible manufacturers and toy makers can make miniature versions of the cars that are sold to the public for between $10 and $80 or given away as promotional material.
Those tiny toys generate royalties for the race team, drivers and sponsors. Action Performance, a motorsports-marketing company that is the leading manufacturer of racing collectibles, says it paid about $30 million in royalties last year.
"It’s become big business," said Fred Wagenhals, CEO of Action Performance, which reported $63.8 million in sales of collectibles last year. "In 1989, [car owner] Felix Sabates said to me, ‘Buy my team a case of beer and you can have the licensing rights.’ Things have sure changed."
Dale Earnhardt will drive a glitzy gold car with a large bass painted on its hood at this year’s Winston as part of a deal with Bass Pro Shops. Jeff Gordon’s car will promote a new line of Du Pont paint. Mark Martin’s car will shift from Valvoline to Eagle One; a brand of car cleaner made by Valvoline.
Race teams typically change paint jobs to meet one of three objectives: to slip a quick cash injection into a car that’s low on funds, to please a sponsor that wants to promote a new or different brand, or because someone offers a successful, well-funded team soooooo much money that it can’t afford to turn it down.
The last of the three is the most lucrative, with one shot sponsors kicking in upward of $500,000 to be on a top car, according to industry sources. But it’s also rare.
Primary sponsors of the top cars pay so much for the privilege; it takes a bundle of money to get them to step away for a week. A sponsorship that costs $7 million a year is worth about $200,000 per race, so if the sponsor’s take from a one time sale doesn’t come close to that, there’s no financial impetus to do it.
"Valvoline couldn’t justify giving up primary sponsorship unless you were talking about pretty big dollars," said Jeff Smith, president of Roush Racing.
Still, there are those out there with deep enough pockets to make it happen on occasion.
Universal Studios Hollywood, the West Coast theme park, used Gordon’s hood to promote its "Jurassic Park" ride at last year’s Winston, triggering a marketing link that has continued to pay dividends.
Steven Spielberg’s Dream Works will promote its animated summer blockbuster "Small Soldiers" on Terry Labonte’s car at the Pepsi 400 in Daytona Beach on July 4, five days before the movie’s scheduled release. Prime Network is expected to give u its space on Ted Musgrave’s car to promote two films later this year.
Even the caped crusader is getting into the act. Batman’s image will take over Dale Jarrett’s car at the UAW-GM Quality 500 in Charlotte on Oct. 4, sharing the track with the Joker, who will be painted on Kenny Irwin’s ride.
Lucrative as that segment may be, it isn’t available to most drivers, teams, and sponsors. Hollywood only has eyes – and big checks – for NASCAR’s stars. For the rest of the teams, which are unlikely to get more than $200,000 to split three ways from a good die cast deal, the value of an alternate paint job lies more in sponsor relations.
Actin Performance has seen marked growth in that sort of internal use of its products. Revenue from the sales of products it developed specifically for corporate promotions last year was about $5.1 million, up from $1.4 million in 1996.