SBJ/December 5-11, 2011/Marketing and Sponsorship

With half of expiring sponsor deals renewed, NASCAR guns for more with expanded sales team

NASCAR renewed six of 12 existing sponsors in 2011, but the departure of three partners means total sponsorship revenue will be flat to slightly down in early 2012.

The sanctioning body renewed half of the sponsorship deals that were due to end this year, signing Bank of America, Goodyear, UPS, Kraft, Sirius and Mars. It is still in discussions with Visa, Exide Batteries, the official auto batteries, and Drive4COPD, the official health initiative.

Some of NASCAR’s sponsors, such as Bank of America, which first signed on as an official partner in 2006, negotiated to pay less because NASCAR attendance and ratings have declined from the levels they were when they last negotiated their sponsorship.

Craftsman, Diageo and O’Reilly’s, the official auto parts store, all declined to extend their agreements. Craftsman is a division of Sears, which reported a net loss of $421 million last month for its most recent quarter. Diageo decided to end its sponsorship of NASCAR and Roush Fenway Racing and invest in a race title sponsorship for Indianapolis Motor Speedway’s Brickyard 400.

NASCAR offset those departures with new deals with Freescale Semiconductor, a producer of embedded hardware, and McLaren, which signed on as the sport’s official engine control unit. It also secured an early renewal through 2017 with Goodyear, one of its largest partners.

“We had a strong year in terms of renewals and people who wanted to stay in the sport — big brand names, blue-chip sponsors,” said Jim O’Connell, NASCAR’s chief sales officer. “The fact that they want to stay in the sport proves what we do for their business. Did we lose some? Absolutely. Diageo repurposed its money. Craftsman has had its business troubles. But given the overall economic climate, we had some good success with our overall sponsors.”

O’Connell said he was optimistic about the prospects for adding new sponsors in 2012. In July, he hired Sean Downes to lead the sanctioning body’s sales efforts as its new managing director of business development. Downes has hired three new sales executives, nearly doubling the size of the sanctioning body’s sales team.

The sales group aggressively is pursuing sponsors in new categories such as green and technology, and traditional categories such as airlines, quick-service restaurants, spirits and electronics. O’Connell said he would like to see at least two new sponsors come into the sport in 2012, especially in the green or technology sector.

In addition to new business, NASCAR will have several significant sponsors to renew in 2012. MillerCoors, Office Depot and Gillette are all up for renewal and each presents different challenges: MillerCoors became a joint venture between SABMiller and Molson Coors in 2007 after Coors cut a six-year, $20 million deal with NASCAR; Office Depot’s business has been challenged by the recession and trying to contain costs; and Gillette recently reduced its marketing commitment to the sport by dropping its NASCAR Young Guns program.

NASCAR also is in negotiations with Sprint to renew its title sponsorship of the sport’s top series. Sprint’s chief marketer, Steve Gaffney, indicated last month that negotiations are going well, and O’Connell confirmed that.

“We’re optimistic we’ll continue working together,” O’Connell said.

O’Connell said that he’s optimistic his team will be able to renew the sponsors that are up in 2012 and add new partners.
“There’s a really good vibe right now about NASCAR — a lot of momentum and good buzz,” O’Connell said. “We have the right people in place on business development. We have really good targets and we think the environment is right and the economy is starting to turn.”
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