Geico Close To Becoming NASCAR's First Premier Partner
NASCAR is finalizing a deal that will make Geico the first company to sign as a premier partner for its new Cup-level sponsorship model, sources said. The deal has not yet been signed, though it has been verbally agreed to and will be reached barring an unforeseen late complication. NASCAR has been in the market looking for three to five top-tier partners for its new model, which will replace the title sponsorship system that is in place. NASCAR has been asking $15-20M annually over several years for the deals. While NASCAR is in advanced talks with multiple companies, sources said that Geico is the first company to be closing on a signed deal. Geico already signed on earlier this year as NASCAR's official insurance partner in a deal that sources at the time said cost Geico a low-seven-figure annual fee. This new agreement will effectively supersede that deal. With a low-eight-figure asking price spread over multiple years, Geico is likely making a mid-eight-figure commitment with the new deal, which includes not just league assets but also those from tracks and media-rights partners Fox Sports and NBC Sports. NASCAR and Geico declined comment.
FIGURING OUT NEW SYSTEM: NASCAR has been out in the market selling the new model for more than a year, and it will have multiple tiers with top-tier partners receiving the best assets. Top-tier partners will get exclusivity at the league and track level, but teams will still be able to land competitors as sponsors. As part of the new system, NASCAR is expected to break down the season into different segments, like the already established "NASCAR Goes West" stretch of races, and give presenting rights to those different segments to its top-tier partners. Scout Sports & Entertainment negotiated the original official insurance deal with NASCAR on behalf of Geico and also has been involved in these talks as well.
NO STRANGER TO RACING: Geico has a large presence in NASCAR across the team and track levels, with race title sponsorships, campground sponsorships, restart zone branding and a season-long primary deal with the No. 13 Germain Racing Chevy driven by Ty Dillon. The company from '16-18 spent more on advertising during NASCAR TV telecasts than any other brand, coming in at an average of around $11M annually. The company also is one of the largest advertisers in all of sports and was a '19 Sports Business Awards nominee for sponsor of the year. Other candidates for top-tier slots that have been mentioned in recent months include Anheuser-Busch, Coca-Cola and Monster Energy, though Monster could end up with a second-tier slot instead. NASCAR has had a title sponsor since '71, when R.J. Reynolds Tobacco Company came aboard. Nextel replaced R.J. Reynolds in '04 before being replaced by Monster in '17.