SBJ/February 28 - March 5, 2000/No Topic Name

Sponsors fit NASCAR for N.Y. pinstripes

Several heavy-hitting sponsors with ties to both Major League Baseball and NASCAR are discussing linking those programs in ways meant to bring more bang for sponsors and exposure for baseball's keystone events, the All-Star Game and World Series.

The deals, which could include a pinstriped New York Yankees car on the track, also would provide a prime merchandising opportunity for the race teams, sponsors and properties, with NASCAR merchandise mogul Action Performance Cos. producing die-cast, collectible reproductions of the car.

Negotiations for a Yankees car sponsorship could be completed by mid-March, Action officials said.

"We are now trying to select the driver," said David Hynes, executive vice president of integrated marketing for Action Performance. "It appears imminent that we will sign a Yankees car. We are aggressively pursuing professional teams to help enhance the licensing and branding exposure for everybody."

Baseball is not the only sport looking to use NASCAR's loyal following to boost exposure. The trend is building in other sports as Dallas Cowboys owner Jerry Jones works to have cars painted in Cowboys silver and blue for Winston Cup and Busch races at Texas Motor Speedway in April. The Cowboys deal is on hold until NFL Commissioner Paul Tagliabue evaluates the sponsorship.

"For years, we looked at those sports as the model," said Don Hawk, who as president of Dale Earnhardt Inc. represents both Earnhardt and his son, Dale Jr. "Now, for some reason, we're the ones with the grandstands full and the new TV contract and the brand loyalty numbers that are far better than any other sport. The other sports are hoping to see our brand loyalty start walking in and sitting in their seats. That'd be good for everyone."

Single-race paint schemes can generate whopping merchandise sales for race teams and sponsors. Action Performance's biggest seller ever was a two-car deal that tied Earnhardt and son to the Coca-Cola Co. at a race in Japan in 1998. It generated about $20 million in sales.

Race teams typically receive 15 percent of sales, with Action Performance and the sponsor splitting the rest. Those splits vary depending on the marquee value of the driver, the visibility of the sponsor and upfront costs that the sponsor is willing to foot.

Major League Baseball is considering potential benefits from merchandise sales, media exposure and, perhaps even more significant, the ancillary boost that comes with helping a sponsor make the most of its investments.

The link between the two sports first came last year when MLB used a Budweiser-sponsored stock car to promote the World Series at four races in October. This year, Anheuser-Busch Cos. approached MLB about building on that start.

"We see it as an opportunity, like every other brand does, to promote our initiative," said Carolann Dunn, a group licensing director at Major League Baseball Properties. "We see this as one of the ways to dominate July with All-Star marketing. We have our corporate sponsors activating their sponsorship against the All-Star Game. We have our licensees producing products. We're on TV. It's another vehicle that's a unique opportunity for us."

This year's program would be larger in scope, not only because of the addition of the All-Star theme, but because MLB Properties representatives are discussing the deal with higher-profile drivers, including Dale Earnhardt Jr., one of the circuit's top merchandise sellers.

Earnhardt Jr.'s agent, Hawk, confirmed that the discussions had proceeded far enough that on Thursday he was discussing possible dates for the tie-in with representatives from Anheuser-Busch. MLB also was in discussions with other sponsors and race teams about the promotion, Dunn said.

"There's a lot of people they're talking to," Hawk said. "A lot of it is going to come down to the sponsors. The key is finding the right combinations that work best for people."

The car that Action and the Yankees are discussing won't get off the ground unless the Yankees are guaranteed that they will have one of NASCAR's top drivers at the wheel, Hynes said. Terms of the deal would call for Action to compensate the Yankees for use of the team's high-profile trademark, a departure from the typical promotional deal.

"We would pay the Yankees a nominal percentage," Hynes said. "In other cases, teams pay us."

NFL teams have used NASCAR for cross-promotion in the past.

"In general, we encourage our clubs to be forward thinking in their marketing approach and also keep in mind the league's interest when developing sponsorship arrangements," said NFL spokesman Greg Aiello. "We need time to review the full impact."In 1997, the Indianapolis Colts sponsored a car in the Brickyard 400, and last year the Green Bay Packers sponsored a Busch-circuit car owned by Dale Jarrett and Packers star quarterback Brett Favre. In the early 1990s, the late PGA Tour star Payne Stewart had a sponsorship deal with the NFL to wear NFL-licensed golf attire.

"A sponsor had dropped out and we went for it," Colts business operations director Pete Ward said of the Brickyard 400 buy. "We got a great deal of exposure from it, not just at the track but on television."

Percent of NASCAR fans that are also league fans
Percent of league fans that are also NASCAR fans
Avid NFL fans
Avid MLB fans
Avid NHL fans
Avid NBA
Dallas Cowboys fan**
* For example, NASCAR fans are 51% more likely than the general U.S. population to be NFL fans
** Taken from the 1999 Scarborough Dallas Study and describes a fan as a Dallas resident who attended a game or saw/listened to a game on radio or television
Source: Scarborough Research Corp.
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