SBJ/June 13-19, 2011/Marketing and Sponsorship

NASCAR signs exclusive toy deal

After years of partnering with an array of toymakers, NASCAR has signed its first exclusive toy licensing agreement, with Spin Master.

The agreement gives Spin Master the right to produce cars, toys and games.
The multiyear deal gives Spin Master the right to make cars, toys and games. The company will pay NASCAR’s licensing trust, known as NASCAR Properties, a licensing fee and royalties, and commit to specific marketing and promotional spending.

Terms of the agreement were not available.

Spin Master, with U.S. offices in Los Angeles, is a privately held toy company with more than $1 billion in revenue. It is the creator of Bakugan Battle Brawlers and Air Hogs and has licensing agreements with Disney and Nickelodeon.
It will launch its first line of NASCAR products in the spring of 2012.

“We want to grow two segments within the NASCAR business,” said Craig Sims, Spin Master’s vice president of global licensing. “One is the collector. But if you take a look at the toys we’ve introduced the past few years, we’re all about storytelling. We’re really going to try and increase the excitement of [NASCAR] toys and we’re going to try and really introduce excitement into kids toys.”

It’s the fourth major agreement signed by NASCAR Properties, which was created a year ago. The group also has signed agreements with Motorsports Authentics to manage trackside retail; Lionel NASCAR Collectibles for die-cast cars; and Wal-Mart for apparel and novelty gift products.

The trust has revolutionized NASCAR’s licensing business by creating a centralized licensing agency that represents teams, drivers and league marks. In the past, each team managed its own licensing rights, and licensees were required to do a different deal for each driver it wanted. Five licenses often meant five separate negotiations.

Sims said Spin Master probably wouldn’t have considered signing a licensing agreement with NASCAR before the trust. He added, “It led to the economies of scale and the efficiencies and opportunities that may have not existed previously.”

NASCAR began searching for a toy partner not long after creating the trust. It spoke to Hasbro, Mattel and other toymakers before selecting Spin Master. It picked the company because it liked Spin Master’s ingenuity and efforts to put its toys before its own brand, said Blake Davidson, NASCAR’s vice president of licensing and consumer products.
“They took an approach of ‘There’s no limitations at all,’ and that really grabbed us,” Davidson said.

Officials at NASCAR Properties consider the toy category to be one of the most important because it can help the sport appeal to youth. NASCAR has an aging fan base, and it has worked to appeal to youth by allowing children into the garage on race day.

“We see toys as an extension of efforts at growing the fan base,” said Scott Hammonds, Hendrick Motorsports’ vice president of licensing and the chairman of NASCAR Properties’ toy committee. “Innovation is key to us because kids can’t go out and play NASCAR in their backyard. It’s a little more difficult to get a kid into NASCAR, and innovation can help.”

Spin Master will be tasked with not only creating toys but also rebuilding the toy business of NASCAR, which has not had a major toy partner most of the year.

“We have to get the business humming,” Sims said. “We’ve gotten a lot of great feedback already for spring 2012, when we are launching our product. We want to get back to a point where NASCAR has a brand in the business.”

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