SBJ/20110103/This Week's Issue
Tracks, networks partner to pitch title sponsorships
Published January 3, 2011
On a cold day in mid-November, Josh Burgett and Dennis Bickmeier, Michigan International Speedway's top sales executives, met for the first time with a local account executive from ESPN.
After lunch at a tavern in East Lansing, Mich., the trio marched into the office of a large local corporation and pitched the company on a race title sponsorship. Burgett and Bickmeier explained signage and hospitality opportunities, and ESPN's Matt Tamborini fielded questions about the demographics of ESPN's race audience.
The meeting, which many in the sales industry might consider routine, represented a revolution in the world of race title sponsorship sales. It was one of the first jointly developed and delivered Sprint Cup race title sponsorship presentations in recent NASCAR history, and though Michigan and ESPN are still awaiting final word from the prospect, executives believe the pitch may have set a precedent for doing business in the sport.
"This opened a door for us," Burgett said. "It worked really well."
Historically, tracks sold title sponsorships independently and then handed partners over to networks that sold a supporting ad buy. If a title partner passed on buying TV time, a network would sell a presenting sponsorship for the race broadcast to another corporation and limit or even eliminate on-air references to the track's title partner.
As a result, spectators might have attended the AAA Texas 500 at Texas Motor Speedway, but viewers watched the Texas 500 presented by GoDaddy from Texas Motor Speedway on ESPN. AAA was only mentioned twice during the race broadcast in accordance with NASCAR's rights agreement with ESPN.
But the challenging ad market following the recent recession upended the every-man-for-himself approach that resulted in such a fragmented sponsorship landscape. As a result, tracks and networks have begun to collaborate more to pitch 2011 title sponsorships for Sprint Cup, Nationwide and Camping World truck series races. Track and media executives say the joint sales pitch underscores the new, more unified effort.
"In the past, our needs were different, so we approached the marketplace differently," said Neil Mulcahy, Fox's executive vice president for sports sales. "As NASCAR has evolved to what it is today, economic realities dictate that we become more creative in our approach so we can build packages that include the more diverse array of assets that people are now looking for."
During NASCAR's boom in the early- and mid-2000s, selling title sponsorships independently worked, but that changed during the last few years when the high cost of a title sponsorship ran up against shrinking marketing budgets. Title sponsorships for Sprint Cup events aren't cheap. Tracks typically sell naming rights to a race for $1.5 million to $3 million. Networks then sell media packages that can cost as much as $3 million. Advertisers must buy both to get regional and national exposure.
That disjointed sales process can be costly at times, said Devron Jeffers, Texas Motor Speedway director of sales.
"We've lost sponsorships in some cases because a company can't come to terms with the network," Jeffers said. "It's important now more than ever that we join forces because we have the same clients and have to consider our clients' interests first now more than ever."
It often didn't work well for the client, either, as it would be pressured to spend more by both sides.
"They were putting all the pressure on the sponsor before," said Trip Wheeler, a former sales manager for motorsports production company World Sports Enterprises, who today is president of motorsports consultancy The Wheeler Co. "But if they work together, it's a much simpler, much cleaner offer and it has the potential to become a tent-pole event for a marketer and brand. That's added value for everybody."
As a result, track and media executives have begun collaborating to create more appealing packages that allowed each party to offer a sweetener they otherwise couldn't. In the case of tracks, the addition of media allowed them to offer a prospective sponsor national exposure. In the case of networks, the addition of tracks allowed them to offer hospitality, in-venue signage and on-the-ground activation opportunities.
By working with ESPN in 2010, Fritz Maskrey, Auto Club Speedway senior director of corporate sales and marketing, sold one of NASCAR's first multifaceted sponsorships to a movie studio. (In his position, Maskrey also represents International Speedway Corp. on the West Coast.) To help Sony Pictures promote its release of "The Green Hornet," Maskrey worked with ISC-owned Phoenix International Raceway and ESPN to craft a package that gave the movie exposure at track and on TV during the Kobalt Tools 500.
The movie's star, Seth Rogen, was featured in a tune-in message during the race broadcast; the car his character drives in the film, the "Black Beauty," drove a ceremonial pace lap; and several times when the race exited a caution, ESPN announcers said the race was going back to green, "brought to you by 'The Green Hornet.'"
Sony Pictures' ability to buy both on-track and on-TV promotions were a major reason it signed on as an associate sponsor for the race. Without those efficiencies, it may not have invested marketing dollars against the Phoenix race.
"A bundled integration like this allows us to achieve our marketing objectives and goals both on air and at the actual event," Sony Pictures spokesman Steve Elzer said. "To us, the reach across all these properties provided excellent visibility and profile for our film."
Maskrey added, "NASCAR's the only sport where you can own multiple aspects of one weekend. You can get a major splash unprecedented in sports, but to do that, we all have to go in together and sell the sport."
Currently, Maskrey is working with ESPN to find a Nationwide title partner for Auto Club Speedway's March race and a Nationwide title sponsor for ISC-owned Chicagoland's fall race.
"We can go in together and say, 'We're going to take somewhat of a discount to obtain the business,' but that makes it turnkey and more customizable," Maskrey said. "We have to play together to grow the fruit."
Joint efforts allow tracks and networks to double their Rolodex. Networks can lean on a track's regional connections, and a track can lean on a network's connections with national ad-buying agencies.
Another benefit of working together is that it cuts time spent on an individual sale in half. Typically, a track will put in as many as 30 days developing a sales deck and pitch for a company. A network will put in a subsequent 30 days of work pitching the company on supporting ad buys.
By working together in November, Michigan International Speedway and ESPN cut the time invested from 60 days to 30. They also trimmed time spent answering follow-up questions by both being in the room.
"We were able to quickly answer questions about our [track] assets and ESPN assets," said Burgett, Michigan's director of corporate partnerships. "It wasn't, 'That's the TV side. You'll have to ask the broadcaster on that.' We could answer it all."
When it comes to engaging tracks, Fox-owned Speed has been one of the most progressive networks. It worked with tracks on the sale of three to five Camping World Truck Series title sponsorships in the last year. Speed's sales team even developed a media package that tracks could plug into pitches to prospective sponsors, enabling tracks to offer a fully integrated deal.
"That came with time and trust," said David Safran, Speed's vice president of sales. "We have a better working process and have had some success. We're confident we can do more of these things because we're in a position to be more out in front on it."
In 2011, the most likely opportunity for tracks and networks to work together will be around the Nationwide Series because those title sponsorships and supporting media cost less than Sprint Cup offers, said Andrew Feit, ESPN senior director of sports management. ESPN met with representatives from ISC and Speedway Motorsports Inc. in December in Las Vegas to outline a framework for working together, and Feit is confident that will result in joint Nationwide sales efforts this year.
"We're realizing that we're better off working jointly from the get-go, and I think we're moving more in that direction," Feit said.
On the Sprint Cup side, SMI is working with Turner to sell a title sponsorship for its first Sprint Cup race at Kentucky Speedway in July, and Mike Burch, SMI vice president of business development, met with ESPN executives in Las Vegas about its other open Sprint Cup title sponsorship at Atlanta Motor Speedway in September.
ISC sales executive Terry Kalna said that the Michigan International Speedway pitch was the company's first joint pitch with a network. He expects there will be additional joint efforts this year for open title sponsorships at Richmond and Kansas.
"Race entitlements are the most efficient buy in racing if you do both track and media deals," said Kalna, ISC managing director, partnership sales and marketing. "In the next six months, you'll see a lot more joint presentations offering both."
Track and network sales executives are optimistic the joint efforts will help them become more effective in bringing new corporate dollars to the sport and be able to keep new partners involved longer by having a more turnkey sales approach.
"There was once a line in the sand where we were going to get our [track] money and TV needed to worry about theirs," Maskrey said. "As the money has tightened up, everyone is going, 'We have to work together.' Because entitlements are our prized asset, this is the future."