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SBJ/November 27 - December 3, 2006/This Weeks News
NASCAR’s new official bank: BofA
Published November 27, 2006
|BofA named the Lowe’s Motor Speedway fall race this year.|
Bank of America, which made a significant push into motorsports this year with multiple track deals and title sponsorship of a Nextel Cup race, is expected to announce today that it is becoming the official bank of NASCAR.
The five-year agreement, which takes effect in 2007, makes Bank of America the exclusive partner for banking and related financial services, and gives the company rights to NASCAR’s marks in marketing and advertising.
The deal marks another step by NASCAR to consolidate its sponsor roster. In addition to Bank of America replacing SunTrust Bank as the official bank, it will replace Home123 Mortgage as the official mortgage company and Centrix Financial as the official auto financing company. SunTrust, Home123 and Centrix were all in the final year of their deals with NASCAR.
Officials did not disclose the financial terms of the deal.
SunTrust had been the official bank since 2004, but it has enjoyed a long history with NASCAR’s founding family, the Frances. In fact, SunTrust helped Bill France Sr. fund the construction of Daytona International Speedway in the late 1950s. This deal comes after last week’s announcement that Tylenol is replacing longtime partner Goody’s as the official pain reliever of NASCAR. Goody’s had held that designation since 1977.
The new partnerships come down to reach and size. With branches in seven states and the District of Columbia, Atlanta-based SunTrust didn’t offer the national reach NASCAR now prefers with its sponsors.
“We wanted to make sure that we’re with a financial institution that has a national footprint, and there are not many banks like that. Bank of America has that,” said Steve Phelps, NASCAR’s chief marketing officer. “And one thing that gave them a leg up as we talked to other folks is that Bank of America already has our affinity credit card through its purchase of MBNA, so they proved to be the ideal company to do business with. They’re big, they’re broad and they do a lot of marketing and advertising.”
Phelps made category consolidation a priority when he took over as CMO in 2005, and about a year and a half into his tenure he thinks the process is at its midpoint.
“We had roughly 50 partners and we’re trying to get closer to 30,” Phelps said. “We think that’s a very smart strategy to allow partners to have as much success as possible in a less cluttered environment.”
Phelps also said that BofA’s activation caught his attention. The company owns official status at 10 racetracks and purchased the title sponsorship to the fall Nextel Cup race near Charlotte.
While NASCAR gains a partner with significant marketing muscle, BofA acquires access to loads of new business. The company and NASCAR’s chief financial officers already have had conversations about day-to-day interaction, as well as ways in which BofA can assist with larger projects.
“Something like this is not about, ‘Hey, let’s get our name out there.’ It’s about creating an integrated relationship with the industry,” said Ray Bednar, Bank of America’s global sponsorship executive.
Jill Gregory, BofA’s NASCAR marketing executive, said racing-themed promotions, at-track branding and hospitality, and rewards programs will be central to the company’s marketing efforts.
BofA’s deal will not affect NASCAR partners Visa (payment services), Allstate (insurance) or Jackson Hewitt (tax service).