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Volume 21 No. 1

Marketing and Sponsorship

NASCAR and Turner Sports have teamed to develop a reality show around Richard Childress, his grandsons, Austin and Ty Dillon, and the rest of the Childress and Dillon family.

The sanctioning body and broadcast company are developing the show and hope to film a pilot soon. The show would emphasize the family’s life off the track, where Childress is an avid outdoorsman and has a vineyard in Lexington, N.C.

“It’s sort of an unscripted ‘Dallas,’” said Ben Schlosser, Richard Childress Racing’s chief marketing officer. “The family is at the heart of it. It’s not about racing.”

From left, Mike Dillon, Ty Dillon, Austin Dillon and Richard Childress celebrate a truck series win.
Childress famously built his race team with a $20 investment in 1969. He ran a race in Talladega as a replacement driver and made $7,500, which he used to fund his car and continue racing. His team now claims annual revenue of more than $150 million.

“I just kept building and building and reinvesting,” Childress said during an interview a year ago.

The team he built, Richard Childress Racing, has become a true family business. His son-in-law, Mike Dillon, is the team’s vice president of competition, and his grandsons, Austin, 22, and Ty, 21, drive in NASCAR’s Nationwide and Camping World Truck series, respectively.

If one of Turner’s networks such as TNT, which broadcasts NASCAR races, or another outlet picks up a reality show focused on the family, it would help expose the team and its sponsors. It also would raise visibility of the team as the Raine Group continues to look for an investor to replace Chartwell Investments as an equity partner in the team.

The effort is being led by Zane Stoddard, vice president of entertainment marketing and business development, who works out of NASCAR’s Los Angeles office.

NRA TO TITLE SPONSOR RACE: At the same time NASCAR undertakes its massive rebranding effort, Texas Motor Speedway is playing to type.

The track, which had been without a sponsor for its spring Sprint Cup race since Samsung last year opted not to renew its title sponsorship, last week finalized a deal with the National Rifle Association to title sponsor its Sprint Cup race April 13. The deal, which is expected to be announced this week, will result in NASCAR holding its first NRA-branded race.

The race comes at a time when the NRA and gun rights remain a flashpoint nationwide. It also follows NASCAR’s effort to support and raise money for Newtown, Conn., which lost 20 children and six adults in a mass shooting. NASCAR partnered with Swan Racing to put a special Sandy Hook School Support Fund paint scheme on the No. 26 car during the Daytona 500, and there were concerns during the race weekend that word of Texas’ talks with the NRA might become public and harm the sanctioning body’s efforts to raise money for the Newtown community.

KEEPING UP WITH CAR COSTS: The new Gen 6 car was celebrated throughout the race weekend for generating considerable news for NASCAR, but it’s also creating red ink for teams.

Team executives said their costs are swelling as they begin using new templates, increase their research-and-development spending and add staff to build the new vehicles. They said it’s made budgeting for the year an “experiment.”

“The car is great for the sport, super for the fans, but it puts short-term financial pressure on teams,” said Brett Frood, Stewart-Haas Racing executive vice president. “It’s not costs going up day to day, it’s over the year, and we haven’t figured out how much yet because it’s evolving.”

Richard Childress Racing Chief Operating Officer Torrey Galida added, “Where the challenge has come in for us is the body parts are double the cost of what they used to be.”

Some of the body parts, such as the hood and decklids, are now made from more expensive materials. Galida said the new cars can be built quicker than the old cars and may require less labor in the future, which would reduce costs over time. But the combination of building new Sprint Cup cars for this season and the need to build new show cars meant that costs have gone up this year. A lot of those costs are still being determined.

“We reserved budget knowing it would cost money,” Galida said, “but it will be several months before we know if it’s $500,000 or $1 million more.”

Budweiser driver Kevin Harvick celebrates his victory in the first Budweiser Duel.
Roush Fenway Racing President Steve Newmark added, “We hope it’s an aberration because it’s been a significant increase. We look at the end product and know it’s worth it. We’ll work with NASCAR to make it more affordable in the future.”

BUD’S SPEEDWEEKS DEBUT: Shortly after driver Kevin Harvick won the first Budweiser Duel race, the driver of the No. 29 Budweiser Chevrolet headed across the street to serve 240 Budweisers to fans who gathered for a post-race party.

Blaise D’Sylva, Anheuser-Busch’s vice president of media, sports and entertainment marketing, watched from a stage nearby with a grin on his face. His Budweiser brand team had made a huge bet on ending its 34-year title sponsorship of the season-opening Shootout all-star race to sponsor Daytona Speedweeks and the Duels, and though it will be months before the company gets final return-on-investment figures, things already were looking good.

“When your guy wins your race, that’s synergy multiplied,” D’Sylva said.

Budweiser brought Harvick everywhere last week. He attended a beer-tasting event for local retailers, delivered tickets to the Daytona 500 to two Marine veterans, and showed up at Hooters after the Duels. In addition to working with Harvick, Bud brought 10 Clydesdales to the Daytona 500 and created a barn for them under a tent in the midway where fans could see the horses up close. The brand complemented that with radio giveaways, a Facebook promotion and a text-to-win sweepstakes that provided fans with special events.

D’Sylva said the company’s marketing budget for Budweiser is somewhat limited, so finding small, effective ways to reach fans and expose them to the brand was important.

“We can buy all the media in the world but this experience here, with Kevin serving the brand and connecting with consumers, is so important,” D’Sylva said. “You can’t beat the loyalty experiences like what this [appearance at Hooters] and experiencing the brand provide.”

Budweiser faces an important decision later this year on the team side. Harvick is leaving Richard Childress Racing for Stewart-Haas Racing, and A-B will have to decide whether to go with him or stay behind and sponsor Childress’ grandson, Austin Dillon. It is expected to make a decision in the coming months, and D’Sylva said it won’t be easy.

“Kevin is fantastic,” he said. “He’s worked for our whole system. We love Richard Childress. He’s a racing icon. We didn’t cause it, but we’ve got a tough decision in front of us.”

DEVELOPING STAR POWER: NASCAR continues to look for a managing director to lead its driver star power initiative.

Jill Gregory, NASCAR’s vice president of industry services, said the sanctioning body interviewed five candidates for the job last month, but didn’t find a person that they felt fit the position. The job will involve working with drivers to develop branding and marketing plans to raise their profiles. NASCAR wants to find someone with brand experience who also has an understanding of the divisions between tracks, teams, drivers and NASCAR. Gregory said NASCAR is restarting its search and hopes to hire someone by late spring.

Lowe’s signed a two-year renewal with Hendrick Motorsports that will see it remain the primary sponsor of the No. 48 car and driver Jimmie Johnson for all 36 Sprint Cup Series races in 2014 and 2015.

The company last week announced the agreement in Las Vegas where it was holding a meeting with 1,700 store managers. Financial terms of the deal weren’t available, but industry sources said Lowe’s will pay less than it did during its current contract, which is set to end after this season. Sources valued Lowe’s current deal at $30 million to $35 million a year.

Lowe’s is one of only a handful of full-season primary sponsors that decided to renew its 36-race agreement in the last few years. It joins Geico, Menards, MillerCoors, NAPA and Shell-Pennzoil in doing so.

The decision ensures that the Lowe’s logo will remain on the hood of a car and affiliated with a driver who has won five Sprint Cup titles, two Daytona 500s and never finished lower than sixth in the championship since Lowe’s signed on as a sponsor in 2002.

Kim Brink spent months working on NASCAR’s new brand campaign, but found herself fielding the same question when she showed it off to everyone from marketers to reporters during Daytona Speedweeks.

“The top question I get asked is: Where will this run outside of races?” said Brink, NASCAR’s managing director of brand, consumer and series marketing.

The answer: It won’t.

The campaign marks a radical shift for the sport, which switched agencies last year from St. Louis-based Jump to Ogilvy. The ads emphasize the drama and unpredictability of the sport and showcase a swagger that NASCAR executives felt had been absent from past campaigns. Spanish-language spots that

replicate the tone and imagery were also created.

Though NASCAR executives had hoped to buy advertising inventory for the campaign outside of race broadcasts on Fox, Fox Deportes, Turner and ESPN, the sanctioning body has no plans to buy media outside those windows, and it failed to convince its broadcast partners

NASCAR’s new brand campaign showcases a swagger to the sport.
Photo: NASCAR (3)
to shift institutional inventory from races to other broadcasts.

As a result, the more than 20 spots that NASCAR expects to develop this year will run only during race broadcasts on Fox, Fox Deportes, TNT and ESPN. But NASCAR hasn’t given up on getting institutional inventory from broadcast partners outside of race windows in the future.

Brink said NASCAR is writing language into its future broadcast agreements, which will begin in 2015, that gives the sport the flexibility to have spots air during non-race and non-sports programming. Its renewal with Fox, which it cut last year, is the first deal to include that language, and it plans to include it in contract talks with Turner and ESPN later this year.

Until those new agreements kick in, Brink said NASCAR will rely on social media to extend the new campaign beyond the races. It withheld several outtake videos and photos that drivers have begun tweeting and sharing on Facebook.

NASCAR is complementing that social media initiative with a local advertising strategy. Between March and November, the sanctioning body is buying spots across TV, radio and digital media for Spanish-language advertising in Phoenix. The Phoenix area will be a test market, and NASCAR will track the campaign’s effect on ticket sales and Hispanic market interest in NASCAR this year. If it’s effective, Brink said they could expand the approach to other Hispanic markets in the future.

In addition to developing a new campaign for NASCAR, Brink said Ogilvy is helping the sanctioning body by allowing it to tap into the relationships Ogilvy enjoys as a WPP agency. NASCAR’s brand campaign will be shown to WPP’s board of directors, and Brink expects Ogilvy to share it with some of its corporate clients, as well.

“They’ll take the message of NASCAR to different sponsors and businesses than have ever considered us before,” she said. “That’s a big opportunity.”

Efforts to fill open, high-end Sprint Cup sponsor inventory continued as the NASCAR season got under way at Daytona.

Stewart-Haas Racing needs to fill six races on Tony Stewart’s No. 14 car and three races on Danica Patrick’s No. 10 car, while Hendrick Motorsports is still searching for a sponsor for 13 races on Dale Earnhardt Jr.’s No. 88 car.

Stewart and Patrick have open inventory.
Neither Stewart nor Earnhardt have open inventory available until the summer, which gives both teams time to find sponsors that fit their car and driver. Both teams are trying to maintain their pricing for each race. The cost of top Cup drivers can range from $600,000 to $1 million per race.

“The market right now has what I feel is healthier activity,” said Pat Perkins, Hendrick Motorsports vice president of marketing. “We’re engaged in a lot of good conversations and feel fairly confident we’ll be able to introduce some partnerships.”

Brett Frood, Stewart-Haas Racing executive vice president, hopes that the media coverage Patrick received after winning the pole for the Daytona 500 bolsters Stewart-Haas’ sales efforts. During the course of the week, she did 12 hours of interviews with 40 outlets ranging from NBC Nightly News and ABC World News Tonight to Parade Magazine and The Daily Telegraph. “SportsCenter” also showed six minutes of live coverage of her pole-winning press conference.

Frood said the team is targeting brands in the health, fitness and beauty categories.

The co-primary sponsor would get appearances, marketing rights, the primary paint schemes and firesuit for three races. GoDaddy sponsors 33 races, and Frood said they are willing to be flexible with the three races a co-primary sponsor receives.

Like Stewart-Haas Racing, Hendrick Motorsports has the No. 88 car covered with sponsors until the summer. Perkins said that Hendrick Motorsports remains open to signing one or multiple partners to fill its open races on the No. 88 car. They have held discussions with some companies interested in all 13 races and others interested in fewer.

Wayne Pfisterer wasn’t sure he wanted to do another deal with the New Jersey Devils. During the 2011-12 NHL season, his company, New Jersey-based renewable energy operation Pfister Energy had held a standard, one-year sponsorship with the club, with a dasherboard presence and marketing opportunities at Prudential Center.

Pfisterer, the company’s president and an avid Devils fan, didn’t see much return on the investment.

“What we learned is that we’re not Budweiser or Coca-Cola,” Pfisterer said. “We had a lot of presence at the Devils’ games, but not direct opportunities in terms of sales or meetings. If we were going to be with the team longer, I decided we needed to do more.”

He took to creating a program that would encourage fans at the games to become involved in renewable energy and brought the idea to Devils management. The end result was a new, two-year partnership between the Devils and Pfister that industry sources estimate is for mid-six figures total.

The program, called Become an Energy Hero, debuts Tuesday at the Devils’ game against Tampa Bay and runs for the duration of New Jersey’s regular season. The offering encourages hockey fans in New Jersey to promote clean energy in the workplace. Participants who develop and execute a sustainability project, based on requirements set by Pfister, are eligible to receive up to one year of reimbursement of their household electrical bills. Examples of projects are adding solar or wind power, or upgrading lighting.

Become an Energy Hero will be promoted through in-game announcements, in-arena advertisements, on branded T-shirts shot into the crowd and through the Devils’ Mission Control social media initiative.

Pfisterer, whose company focuses on commercial and industrial facilities and has 50 employees in New Jersey, said he may expand the program into other avenues of marketing if it takes off. The Devils are Pfister’s only sports partner.

“I will view this as a success on some level if we are introduced to a couple of different companies,” Pfisterer said. “It will be a great success if we get a couple of jobs from it, but if people become aware of who we are and what we do, that would make us happy, too.”

As for the Devils, the club has emerged strongly from the NHL lockout, which led to the cancellation of 17 home games for each club. New Jersey has sold out nine of its 10 games played so far this season at the 17,625-seat Prudential Center. Going back to last year’s playoffs, when New Jersey advanced to the Stanley Cup Final, the team has sold out 21 of its last 22 games.

“Our success … has led to growth across the board, not just with our fans, but with corporations as well,” said Devils Arena Entertainment President Rich Krezwick. “Like with Pfister, it has given us new opportunities to engage with companies about unique partnership initiatives.”

Terry Lefton
Get ready for the first national TV advertisement featuring basketball talker Stephen A. Smith.

Smith, who was recently parodied on “Saturday Night Live,” is being paired with LeBron James in a TV spot from no less a marketer than McDonald’s. From what we’re told, the ad was shot last month near ESPN’s Bristol, Conn., headquarters and scheduled to break later this month. The spot features Smith considerably more than James — in fact one source said James actually is referred to but not depicted — a factoid that’s also fascinating. The ad touts various versions of McDonald’s Extra Value Meals and was created under the aegis of Arnold Worldwide.

The ad will include LeBron James, but Smith will be the star.
We don’t necessarily concur with a colleague’s assessment that this is a sign of what’s perverse in the marketing world, but rather we believe a brand harnessing the commercial appeal of the notoriously self-important ESPN personality indicates to us that “Stephen A.” does have his audience. Headline Media, New York, represents Smith.

> MORE FIZZ, LESS SALT: Pepsi, an MLB corporate sponsor since 1997 and one of the sport’s longest-standing corporate patrons, is close to finalizing a five-year extension of its MLB league deal. Sources said the agreement is relatively similar to what was in place with one big difference — the new deal will not include rights for salty snacks, a category in which Pepsi is a major player through its Frito-Lay unit. To be fair, we never saw much activation leveraging Pepsi’s national MLB rights and those salty snacks.

As for the beverage side of the house, we’re told by various sources that activation plans for the upcoming MLB season are incomplete. However, with the MLB All-Star Game in Pepsi’s home territory of New York, not to mention at Citi Field, where Pepsi is a founding-level partner, we’re expecting a relatively large splash around the midsummer classic.

> ROSTER EXPANSION: Oakley, which is better known for eyewear than licensed sports togs, is joining MLB’s roster of apparel and accessory licensees. The deal starts this year with apparel bearing the marks of the New York Yankees and the Los Angeles Angels of Anaheim, which are located near Oakley’s Orange County headquarters.
Oakley has been an MLB eyewear licensee since 2008 and has made sizable sponsorship investments at the home parks for both teams, so each will have dedicated retail space, and in-bowl signage. In addition, Yankees outfielder Ichiro Suzuki has endorsed Oakley sunglasses for some time.

Sources said that Oakley’s MLB apparel line, which one assumes will eventually include more than two teams, will be composed of high-end men’s and women’s licensed clothing. The apparel rights also will be relatively broad, including outerwear, golf shirts, T-shirts, jackets and hoodies, available in April in time for the opening of MLB’s season. To start, distribution will be limited to online, the team’s home parks and select Oakley retail locations within the New York and Orange County areas.

MLB on-field cap rights holder New Era will produce caps for the new Oakley line. Also included are rights within one of the hottest (and increasingly over-licensed) categories — tech accessories, including hot-selling products like iPad and iPhone covers and cases and other tech-related products.

We’re curious about how this deal will sit with MLB’s incumbent apparel and accessory licensees. However, whatever licensee dissatisfaction over perceived dissolution of MLB rights could be tempered by what appears to be limited distribution, at least initially. If that changes, expect grumbling worthy of a major leaguer.

Quiksilver has been granted rights for MLB team-branded board shorts and flip-flops.
> IN THE SWIM: In another new but limited distribution MLB licensee, Quiksilver has been granted rights for team-branded board shorts and flip-flops. We have already seen the swim trunks licensed by the NFL and NBA, and the initial MLB offering includes products featuring the logo of Quiksilver and the Angels, Yankees, Boston Red Sox, St. Louis Cardinals, Chicago Cubs, Los Angeles Dodgers and San Francisco Giants. Distribution will be online, in Quiksilver stores, team shops and stadium stores.

No word on whether the board shorts will be sold anywhere near the swimming pools at Chase Field in Phoenix and Marlins Park in Miami.

The Ravens have promoted Kevin Rochlitz.
> ROCKIN’ RAVEN: Along with the excitement generated by fans of the Baltimore Ravens following the team’s Super Bowl triumph, there’s some reason for celebration in the team’s front office. Kevin Rochlitz, vice president of national partnerships and sales and a 10-year Ravens employee, has been promoted to vice president of corporate sales and business development, the position previously held by Mark Burdett, who left for a local TV sales job. In announcing the promotion, Ravens President Dick Cass noted that the Ravens’ national sales team has reached or exceeded its sales goals for each of the past five years.

With no large sponsorship renewals due, Rochlitz said that new categories are the focus for the Super Bowl champions, including the insurance, gas and convenience store categories. A planned $35 million renovation at M&T Bank Stadium also should provide some new sponsorship revenue opportunities, including potential naming-rights deals.

Terry Lefton can be reached at