Editor's Note: This story is revised from the print edition.
Despite having another year left on their current sponsorship agreement, Goodyear Tire and NASCAR have negotiated a five-year extension that will carry their partnership through 2017.
The deal, which industry sources valued at $12 million to $15 million a year, will see Goodyear maintain its position as the official tire of NASCAR. It continues a business relationship that the Ohio-based tire manufacturer has had for more than 50 years, and it means the company will continue to develop and supply tires for the Sprint Cup, Nationwide and Camping World Truck Series.
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GOODYEAR
Goodyear has had a NASCAR relationship for more than 50 years. |
“We view our participation in NASCAR as a key element in Goodyear’s brand equity,” said Pierre Jambon, Goodyear’s vice president, off-highway business. “They’re the expert in NASCAR. We’re the expert in performance tire racing. We’re part of the NASCAR team … and we’re very proud of that.”
The most significant change in the new agreement is that Goodyear will have more flexibility in how it activates its sponsorship. Under the previous deal, NASCAR, like many professional sports leagues, required Goodyear to devote a specified amount of marketing dollars to advertising with broadcasting partners and activating at racetracks. But the new deal asks only that Goodyear spend a set amount and gives the tire company the flexibility to choose where and how to spend that money.
“It’s key to give flexibility to our partners so they can get the maximum [return on investment],” said Jim O’Connell, NASCAR’s chief sales officer. “We want to support our broadcast media partners but at the same time give our marketing partners flexibility to activate.”
Jambon said that Goodyear asked for that flexibility because the evolving media landscape made it important to preserve the ability to spend more on digital in the future as consumers continue to migrate online.
“That was a critical piece of our discussion with them,” Jambon said.
Goodyear has enjoyed a business renaissance in the last year. The 113-year-old company, which has a market cap of $2.4 billion, reported a net income of $143 million for the first half of the year, up from a loss of $19 million over the same period in 2010. Some of the credit for that has been attributed its focus on making and marketing higher-end tires.
