Monster Energy has requested more time from NASCAR to decide whether it wants to renew its title sponsorship of the sanctioning body’s premier series, according to industry executives briefed on the matter.
Sources have said that Monster was contractually obligated to let NASCAR know by this December whether it would pick up the option. However, high-level NASCAR executives met at Monster headquarters in late summer, sources said, and the company asked for an extension. It was unclear at press time whether the extension was granted and how much more time was given if so.
Monster signed with NASCAR in December to be title sponsor of the series in 2017 and 2018 in a deal worth around $20 million annually. The term was for two years with a two-year option to renew for the 2019 and 2020 seasons.
Both NASCAR and Monster Energy’s vice president of sports marketing, Mitch Covington, declined to comment.
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Monster has its name on the series for 2017 and 2018, with an option for ‘19 and ‘20.
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The title sponsorship renewal talks come as Monster also faces decisions on team renewals, with contracts with NASCAR’s Stewart-Haas Racing and the NHRA’s John Force Racing expiring after this year. Between Monster’s NASCAR series naming-rights fee, activation and the two team deals, the company likely will spend in the mid-eight figures this year.
Some industry observers have expressed skepticism that the teams will land renewals. But Stewart-Haas Racing executives have expressed confidence that they will earn a renewal from Monster, while Steven Cole, vice president of sales for John Force Racing, said in late August that he was working on a one-year renewal for 2018.
Steve Phelps, NASCAR’s executive vice president and chief global sales and marketing officer, has expressed confidence in Monster remaining as title sponsor of the series at different times this season. He said in July that data and anecdotal evidence showed that NASCAR fans had quickly developed an affinity with the brand, with spiking brand awareness and TV visibility metrics as evidence. Monster has also struck business-to-business deals with the likes of Kroger by leveraging series naming-rights assets.
“There’s still some things we’re learning about each other that we’ll continue to get better and better at, but overall I think it’s working for them quite well,” Phelps said at the time. “[It’s working] at retail, from a fan perspective and from an awareness and visibility standpoint, it’s working as well.”
