Editor's note: This story is revised from the print edition.
The 2011 Sprint Cup season will be remembered as a difficult one for NASCAR teams, a year marked by sponsor exits and reductions in the number of races they sponsor that were only marginally offset by new deals. But both team and series officials point to a late run of deals that could offer momentum entering the 2012 season.
Well-known brands such as Crown Royal, Best Western, Red Bull and Tums ended their primary race agreements in NASCAR’s Sprint Cup Series. UPS, Caterpillar, General Mills, the U.S. Army and Home Depot all decided to decrease the number of races they will sponsor in 2012.
|
A bad economy and sponsorship fragmentation helped make 2011 a challenging year for NASCAR, says motorsports writer Tripp Mickle.
|
On the flip side, Fastenal is a sponsor that will increase the number of races it funds. Two of six new companies in the series, Farmers Insurance and 5-Hour Energy, signed on as sponsors for more than 20 races. The others, Quicken Loans, Outback Steakhouse, Dollar General and Rheem, a water heater manufacturer, signed on to sponsor 12 or fewer races.
Three sponsors renewed in 2011 — Mars, which has a co-primary deal with Joe Gibbs Racing; 3M, a primary sponsor with Roush Fenway Racing; and Aaron’s, which has a 30-race primary with Michael Waltrip Racing.
Aflac, which was the full-season primary sponsor on Carl Edwards’ No. 99 car, has not announced if it will stay in the sport. Best Buy, which sponsors A.J. Allmendinger’s No. 43 car, is in conversations about renewing its sponsorship with Richard Petty Motorsports. And Burger King, which sponsors Stewart-Haas Racing, is not expected back as a primary sponsor for two races on Tony Stewart’s No. 14 car.
|
From better competition to increased ratings, NASCAR has reason for optimism going into 2012, says motorsports writer Tripp Mickle.
|
In total, NASCAR teams lost primary sponsorship for more than 150 races and added new primary sponsorship for approximately 65 races. If Red Bull, which is ending its ownership and sponsorship of a two-car team, is removed from consideration, the sport lost primary sponsorship for an estimated 77 races across seven cars — a figure far more palatable for NASCAR team executives and agency executives working in the sport.
“This is part of the continuation of change in the sport,” said Mike Boykin, GMR Marketing’s executive vice president of sports. “Brands have learned you don’t have to do a whole season, and teams are more flexible on price and number of races now.”
Sponsor reductions in spending at the team level are causing both Roush Fenway and Richard Childress Racing to contract in 2012. Roush, which came into the year needing to renew all full-season primary sponsorships with 3M, Crown Royal, UPS and Aflac, will drop one car after losing Crown Royal’s sponsorship of the No. 17 car driven by Matt Kenseth and UPS’s sponsorship of the No. 6 car driven by David Ragan. Childress, which came into the year needing to renew a full-season primary deal with Caterpillar and co-primary deal with General Mills, will drop one car after both sponsors decided to decrease the number of races they fund and driver Clint Bowyer left for Michael Waltrip Racing.
“It’s a sign of the time of where we are with the economy,” said Andrew Campagnone, a senior managing partner at Sports Marketing Consultants, which helped negotiate the Farmers deal with Hendrick Motorsports. “There’s some fatigue in the market, but there are new emerging categories we’re starting to look at as an industry like technology and sustainable companies.”
An influx of deals at the end of the year give Campagnone and others optimism that the team sponsorship business might turn around in 2012. In recent months, 5-Hour Energy closed a deal with Waltrip Racing to sponsor 24 races, Dollar General signed on to sponsor 12 races at Gibbs Racing and Quicken Loans signed on as a sponsor for nine races at Stewart-Haas.
 |
Aflac and Best Buy haven’t announced whether they will renew high-profile sponsorships.
Photo by: GETTY IMAGES
|
NASCAR teams and executives point to those deals as encouraging signs and say they should provide momentum for teams looking for sponsorships in 2012 and 2013.
“There’s certainly challenges that remain in the sponsorship market from a team perspective, and that goes across all sports properties, but I believe we’re in a better position today than a year ago to capitalize on things that are positive,” said NASCAR chief marketer Steve Phelps. “Television viewership is up 10 percent and young demo viewership is up more than 20 percent. Competition is good with 18 different winners. Those are things that … bode well for the team sponsorship component of the sport.”
Brett Frood, executive vice president at Stewart-Haas, said that teams continue to adjust to a sponsorship marketplace that’s different today than it was in 2008 when Aflac signed on as a primary sponsor in a deal worth more than $25 million at Roush. For starters, teams have decreased the cost of sponsorships and become more flexible about the number of races they require a sponsor to fund. They also have begun working further ahead on new sponsorships, turning a sales cycle that was one to two months as recently as 2008 into one that is now six to 12 months long, said Frood, who closed the nine-race agreement with Quicken Loans last month.
“In years past, people may have jumped in a little more quickly,” Frood said. “Now it takes more time because allocating dollars for marketing spend is more challenging and you really need to create a game plan and determine a process for ROI.”
Team executives said that the number of companies willing to take meetings and discuss sponsorship opportunities is up from a year earlier. Waltrip Racing general manager Ty Norris said the team has held senior-level meetings with four companies in recent months, up from zero this time last year.
“I’m not saying more people are signing on the dotted line, but more people are listening to our story,” Norris said. “The thaw is there. Ultimately, the domino effect [of sponsors exiting] will start going the other way.”
