Four weighty companies are negotiating sponsorship deals with NASCAR and its associated properties, with two discussing roles in competitive categories that could command from $2 million to more than $5 million per year.
Burger King Corp., AT&T Corp. and Nokia all have negotiated with NASCAR in recent weeks, while Allstate Corp. is discussing involvement with NASCAR teams and tracks, sources said.
Burger King has gone so far as to inform several of its business partners that it expects to be an official sponsor of NASCAR next year, sources said, although others with direct knowledge of the negotiations say several sticking points remain.
No agreements have been finalized in either the fast food or telecommunications categories, said John Griffin, director of communications worldwide for NASCAR. But NASCAR is close to reaching agreements with several companies, Griffin confirmed.
NASCAR began talking to Burger King, the nation's No. 2 fast food chain, and AT&T, the telecommunications blue-blood, when current sponsors McDonald's Corp. and MCI Communications Corp. showed little interest in renewing contracts that expire on Dec. 31.
Should NASCAR lose and then seamlessly replace McDonald's and MCI, it will have found success where sports leagues have struggled in recent years.
Although fast food and telecom traditionally are among the more lucrative sponsorship sectors, changes in those industries — such as fast food chains aligning with Hollywood studios and price competition sucking profit from long-distance giants — have rendered the categories relatively barren on the national level.
The NFL has been unable to sign a fast food sponsor since its deal with McDonald's ended more than a year ago. Major League Baseball and the PGA Tour are both without telecom sponsors after deals with MCI and AT&T expired in the last year.
An increasing number of corporations are moving dollars out of other sports and into NASCAR.
"To think that those kinds of brands — any one of them — were coming into NASCAR would have been a threshold victory for the sport 10 years ago," said Max Muhlemann, patriarch of Muhlemann Marketing Inc., a company that got its start selling motorsports but since has branched into other properties. "To have brands of that quality discussing NASCAR at one time is the best possible testimony of how much NASCAR has done in establishing itself.
"They clearly are on the dance card. They may not be picked every time. But they weren't even on the card 10 years ago or even less."
Though there are strong indications that McDonald's will not renew its sponsorship, a contingent within NASCAR remains bent upon retaining the company. NASCAR already has made changes in the soft drink, credit card and home improvement categories in the last two years. Some within the sanctioning body fear that further upheaval would undermine stability.
One place where there is sure to be shuffling is the telecommunications category, where one source close to MCI said the company's deal with NASCAR is "completely dead." Talks have heated up with both Nokia and AT&T, sources said, with NASCAR looking to bring on AT&T as an umbrella telecommunications sponsor while carving out a hardware category for Nokia.
"AT&T in years past has decided not to become involved [in NASCAR]," said AT&T spokesman Burke Stinson. "However, in recent times we've changed our tune. We have recently decided to indeed get involved in the NASCAR scene."
One sponsorship source said the AT&T deal that's being discussed would be the most lucrative category sale ever for NASCAR. Even if the company does not become a full-fledged NASCAR sponsor, sources say it has shown interest in sponsoring individual teams or tracks, as has Allstate, which is fresh off its first major sports marketing venture with the FIFA Women's World Cup (see story, page 11).
Nokia, a company that previously turned away many NASCAR-related properties, has been working with its promotions agency, GMR Marketing, to find an on-ramp into motorsports, according to a source who has had frequent contact with GMR.
A marketing link tying Nokia to AT&T's digital one-rate service makes it a strong possibility that the two would come in as a pair, a source said.
Stinson would not specify the company's plans for involvement. Representatives of Burger King and Nokia did not respond to interview requests.
NASCAR is looking to generate more than $5 million annually from its telecommunications category, a price tag that is more than double that which it will attach to fast food, sources said.
The sanctioning body's goals differ from one category to the next. Telecom is cash driven. Fast food is about marketing.
With fast food, NASCAR is expected to command a relatively low annual rights fee, in the $2 million range, but demand that its sponsor follow the lead of Coca-Cola Co., Visa and Home Depot Inc. by tying media and significant promotional programs to their sponsorships. McDonald's kept its NASCAR connection conspicuously quiet this year, which puzzled and frustrated NASCAR executives.
The latest stumbling block came when NASCAR began planning the marketing package for its upcoming animated television show, "NASCAR Racers," which is scheduled to air on the Fox Kids Network beginning in February.
NASCAR would like a fast food company to participate in the show, both to advertise and, potentially, to distribute merchandise to children as part of a promotional campaign. But McDonald's wasn't certain it could enter such an arrangement because of an exclusive agreement to promote Disney animation.
NASCAR will also ask its fast food sponsor to run a promotion tied to the NASCAR 2000 platform, and buy media on four accompanying television shows on ESPN.
Burger King's last full-time involvement in NASCAR was with a team sponsorship of then driver/owner Joe Nemechek in 1996, but the company continues to have an endorsement deal with Dale Earnhardt and his son, as well as with Craftsman Truck Series champion Ron Hornaday. Burger King also runs local promotions tied to stock car racing.
"I do know that they want to enhance their relationship with Dale and with our sport," said Don Hawk, president of Dale Earnhardt Inc., who directs business activities for racing's most valuable endorsement property. "Nothing that moved them in that direction would surprise me."
With telecom, NASCAR appears to see an opportunity for immediate financial gain as well as enhanced visibility. MCI declined to renew its all-encompassing telecommunications sponsorship at an asking price of more than $5 million per year, up from just over $2 million in the current deal, according to a source close to the company.
The packages being shopped to AT&T are thought to have an even higher price tag.
Staff writer Langdon Brockinton contributed to this story.
