Having already deposited an incremental $750 million into its coffers with the recent Nextel title sponsorship deal, NASCAR is gunning for its second nine-digit sponsorship pact this year as it attempts to find a new "official fuel" sponsor.
Insiders say the asking price for whichever company replaces ConocoPhillips' 76 gasoline brand is $15 million a year in barter and cash, with NASCAR looking for the same 10-year term it got from Nextel. The current deal, sources say, is $5 million to $6 million a year, mostly barter.
That makes the asking price a hefty increase, but we now believe anything is possible after watching NASCAR pull off the trick of selling the highest-priced sports sponsorship in history while offering potential partners the most cluttered venue in which to market their wares.
Given the consolidation in the retail gasoline category, it's pretty easy to name the competitors: ExxonMobil, Shell, Sunoco and BP/Amoco.
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| NASCAR fuel deal ranks as one of the oldest sponsorships in sports. |
Sweetening the deal is the inclusion of convenience-store rights with the gasoline category, which would make pass-through rights important. Circle K, NASCAR's current official "pit stop" (not to be confused with McDonald's "official drive-through" designation), is owned by the same parent company as the current gasoline rights holder, and those rights will be packaged.
While it was impressive how quickly NASCAR found a new title sponsor for its premier circuit, unless it plans to pay for fuel for the first time (the equivalent of NBA teams paying for sneakers), a new fuel deal is a must. The logistics of trackside delivery and all the fuel it takes to run the Winston Cup, Busch and Craftsman Truck circuits are enormous, not to mention the massive and complex environmental and liability issues involved.
Then there's replacing the Phillips 76 branding, which is a fixture at NASCAR tracks. Accordingly, many within the sport are saying a deal will have to be done in the next 60 days to give teams time to test the new fuel and make the major changeover possible by next season.
The indisputable fact that NASCAR can't run without fuel should make this category more of a buyer's market than the series title.
As one of the world's largest companies, ExxonMobil has to be NASCAR's top choice for the category. ExxonMobil already has an investment in the sport, as Mobil 1 is the league's official lubricant. ExxonMobil also sponsors Penske Racing, along with drivers Rusty Wallace and Ryan Newman, as part of its motorsports portfolio.
The roots of NASCAR's original fuel deal are so deep that there is some debate exactly how long it has been around. Some say it dates from the league's origins in 1948. There is no doubt that the deal that started about 50 years ago as a agreement between the fledgling stock car circuit and what was then the Pure Oil Co. is certainly one of the oldest sponsorships in sports.
CLEAN DEAL: Colgate-Palmolive has renewed its Canada-only NHL sponsorship rights for an additional four years. C-P's Speed Stick brand has been an NHL corporate sponsor since 1996 and normally activates with an on-pack offer and ad buys on Canada's TSN.
The duration of the deal gives the league another sponsor that is re-signing, rather than resigning, in the face of a likely labor dispute when the current collective-bargaining agreement expires in September 2004.
THIS DRUG'S FOR LOU: Prescription-drug marketer Merck is behind an awareness campaign for the National Prostate Cancer Coalition that uses an MLB corporate sponsorship and testimonials from Tampa Bay Devil Rays manager Lou Piniella for more marketing oomph.
Piniella and hall of famer Ozzie Smith are scheduled to do PR appearances in and around this week's MLB All-Star Game, including throwing out a ceremonial opening pitch. They will also market in and around the World Series.
The campaign will then segue into a "manager's move of the week" online campaign that will run through the end of the season. The idea is that the best move is for men 40 and older to get checked for prostate cancer. Merck's Proscar drug is widely prescribed for treating enlarged prostates, but may get a boost after a recent government study showed it lowers the risk of prostate cancer by 25 percent.
The deal is a bit of a conflict since another prostate cancer awareness organization, CAP CURE, has a long-standing relationship with MLB and is using former Cy Young winner Dennis Eckersley as a spokesman.
COMINGS & GOINGS: Scott Hudler to sports sponsorship manager at Masterfoods (formerly M&M/Mars), working primarily on the food marketer's NFL sponsorship, along with its Little League Baseball and youth soccer sponsorships. He was brand communications manager. ... Kevin Riveroll to senior account executive at NASCAR's New York City office. He has held marketing slots with Chevron/Texaco, a NASCAR team sponsor, and candy marketer Just Born, which holds NASCAR league and team sponsorships.
Terry Lefton can be reached at tlefton@sportsbusinessjournal.com.
