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Volume 23 No. 29

In Depth

Xfinity’s title sponsorship of NASCAR’s secondary series begins this week as the brand embarks on a decade-long effort to woo race fans and win over cable subscribers.

The Comcast subsidiary’s mission from the drop of the first green flag is to get fans up to speed with its X1 platform, and Xfinity is rolling out a series of NASCAR-specific features to showcase the technology.

Xfinity taxes over as title sponsor of NASCAR's secondary series.
Photo by: Getty Images
The X1 platform combines cable with technology typically found on second screens such as mobile phones and tablets. Viewers watching a race, for example, on television can enhance the experience by calling up additional features such as video on demand, on-screen charts and other interactive elements.

Xfinity, whose deal with NASCAR is for 10 years and worth close to $200 million, is making a concerted effort to do all marketing around the series in a decidedly race-centric context.

At the track, Xfinity’s activation efforts will revolve around the Xfinity Zone, which will tout X1’s features in ways such as showing videos of drivers talking about their experiences with the operating platform.

“The great thing about the X1 platform is since everything is in the cloud, we can make changes and updates and get new functionality and content in front of our customers at a pace we’ve never seen before,” said Matt Lederer, senior director of sports brand marketing for Comcast. “So we’re kind of lucky that NASCAR has a long season because we’re going to have opportunities throughout the year to be able to introduce new things to the fans over the course of year one.”

Lederer did not want to reveal specific features that will be part of the X1 NASCAR package, but prior iterations of

sports coverage on the platform reveal a heavy emphasis on integrating features such as statistical charts, graphics and other content onto the screen while simultaneously airing action from the event.

For Xfinity’s coverage of NASCAR, a sport immersed in numbers, this theoretically could take the shape of showing live metrics of categories like lap speed, pit-road stops, laps led and biggest movers in the field of drivers.
A fan using the system would use his remote control to access the system and the additional elements.

“That’s the unique aspect of X1: It’s actually created through the new television interface that looks and feels more like a user interface from an iPad,” said Todd Fischer, vice president of client management at GMR Marketing, which is Comcast’s sports marketing agency. “So you would have apps on the main screen of your television, and then you would be able to view sports content in a totally different way through the X1 sports app. It would not only show you the program but also show you other sports events that are happening simultaneously.”

Another big part of X1’s NASCAR package will include video on demand. Comcast has been working with NASCAR to attain exclusive highlights for X1, and the brand will kick off the video-on-demand streaming at Daytona International Speedway with a series of the top 10 races of all time that have been run at the track. The brand also is working to create digital videos that will spotlight some of the Xfinity Series’ up-and-coming drivers.

The Xfinity Zone will be the centerpiece of Xfinity’s trackside activation.
From an advertising standpoint, Xfinity already has released one spot touting the rebranded series, via Goodby, Silverstein & Partners, San Francisco, and plans to release more over the course of the year. NASCAR drivers Darrell “Bubba” Wallace Jr. (see story, below) and Carl Edwards recorded a new spot a few weeks ago.

At the track, Xfinity will activate at what currently is scheduled to be 14 race weekends throughout the season, including stops mostly in Comcast-wired markets plus a few at iconic tracks such as Daytona and Charlotte Motor Speedway whose regions don’t have Comcast capabilities.

At the Xfinity Zone activation area, an emcee will play music and drivers will make appearances as fans mull around different exhibits showing off the X1 platform in the context of racing. At one section of the zone, titled Driver’s Den, fans will get a behind-the-scenes look at drivers and how they “enjoy entertainment beyond just racing,” Fischer said. The first edition of Driver’s Den will feature Edwards and Chase Elliott.

An Innovation Station will feature a show car and Xfinity representatives outlining how both the company and NASCAR have used technology to evolve through the years. Furthermore, a retail experience will allow fans to try out the X1 platform and ask questions on the topic — cable television’s version of a test drive. Promotional efforts such as giveaways will be part of the zone as well.

Xfinity recently announced that it will continue the popular Dash4Cash promotion that sees money and prizes given out to both winning drivers and selected fans as part of a multi-race competition that occurs in season. As far as its search for return on investment, Lederer said Xfinity will be tracking results closely. He said Comcast’s ROI research includes both in-house and third-party metrics.

“We want to see impression levels of Xfinity increase with NASCAR fans. But maybe even more important, we

Fans will be able to try out the X1 platform at the Innovation Station.
want people to consider switching or staying with Xfinity who are NASCAR fans. We want to see that metric continue to rise as it has been doing significantly for the last few years for sports as a whole,” Lederer said.
“Consideration from sports fans has grown tremendously over the last five or six years. We’ve been a lot more aggressive in our messaging around sports. … And now we’re going to look at taking that consideration of NASCAR fans and moving that in the same direction.”

The company also will be seeking to make inroads in the business-to-business space, which is one of NASCAR’s calling cards. Comcast will use hospitality assets as part of the deal to entertain groups including its business group, prospective and current customers, and other employees. B2B efforts will highlight Comcast’s portfolio of services such as Internet, ethernet, video, voice and Wi-Fi.

Overall, Lederer is steadfast in his belief that the at-track, at-home and mobile experiences will be improved dramatically for NASCAR fans thanks to the investment the company is putting into the sport. Xfinity is taking over the naming rights from Nationwide, and Lederer thinks the insurance company left the series in good shape.

From NASCAR’s perspective, Steve Phelps, executive vice president and CMO, said that having a technology-based partner will help move the sport forward.

“Creating this entertainment experience is going to be a very important thing for our fans. They’re going to bring the Xfinity Series, and NASCAR in general, closer to the fans,” Phelps said. “Not to kind of brag, but I think the choice of Xfinity was a very smart one for our fan base.”

Add Darrell “Bubba” Wallace to the list of drivers to watch this season in the newly rebranded NASCAR Xfinity Series. Wallace, a product of NASCAR’s Drive for Diversity program, won four races in 2014 driving for Joe Gibbs Racing in the NASCAR Camping World Truck Series. For the new season, Wallace has moved to Roush Fenway Racing, where he will drive the No. 6 Ford Mustang. The 21-year-old spoke with SportsBusiness Journal writer Adam Stern about that transition, and about the challenge in finding a sponsor.

Wallace is making the move to the NASCAR Xfinity Series this season.
Photo by: Getty Images

■ On why he switched from Joe Gibbs Racing to Roush Fenway Racing: “This was something we really had to look into to see what was the best option for the next step in my career. Roush had an opening, and the potential to run full time was something that I was really pushing for. … I have to keep getting my face out there in front of the cameras and keep winning races. It’s been a fun switch. I’m still trying to figure out everybody’s name. I know my crew chief’s name; that’s pretty much it. Everybody else is, ‘Hey bud, hey man, how are you?’”

■ On linking up with Maverick Carter’s agency to help find a sponsor and other marketing opportunities: “That’s huge. That story kind of got blown into more than it was. That was just an introduction call to the Fenway guys to get that relationship going. I talked to Maverick Carter for a brief second and we talked about things that maybe could be in the works for the future and left it at that. And then, all of a sudden, it was: ‘Maverick Carter and LeBron James are working on his sponsorship.’ Anything they can do to help get sponsors helps, for sure.”
n On the challenge of finding a sponsor: “It’s always been the never-ending battle in the sport. I’ve been racing for 12 years; I’ve been battling sponsorship issues for 12 years. I’ve had plenty of practice with it; it doesn’t faze me. I just go out there and run and win races. If we win races and don’t get a sponsorship, I guess it wasn’t meant to be.”

■ On NASCAR’s Drive for Diversity program: “The diversity program definitely helped me get to where I am today. It was a lot of fun in that program getting multiple wins and competing for a championship in the K&N Series. So I’m thankful for the opportunity I was given there. It’s awesome to see the new crop of drivers that are coming through each and every year. This year’s group is pretty stout. It’s always fun to watch who’s the next one coming up. People are saying me right now, but hell, you have to keep looking at who’s younger because they’re winning races and trying to get up there as well.”

■ On improving diversity in NASCAR: “It’s just going to take time, I believe, and I can’t really pinpoint a time frame. You just have to keep working hard at it — plugging away — and you never know what can change. If you get 10 diversity drivers in the Sprint Cup Series, you never know what floodgates will open up and what aspects will change.”

■ On his role in growing NASCAR’s diversity: “I think of it sometimes and what my role is and what I have to do. But at the end of the day, I tell myself, ‘Go out there, do what you have to do, win the races, keep running up front.’ There’s so much on your plate when you get to the weekend as far as making sure you’re on time for the drivers’ meeting and appearances. And I feel that those little things add up and play a big part in that role that I have from a diversity standpoint.”

Selling trackside merchandise out of haulers is a deeply ingrained tradition in NASCAR culture. Fanatics is about to shake things up and is confident that fans will warm up quickly to the change.

Fanatics’ 10-year, trackside merchandise deals with NASCAR and International Speedway Corp. were announced in January. The deals will see a phasing out of selling trackside merchandise through haulers in favor of a more centralized setup using climate-controlled tents.

Fanatics Authentic President Ross Tannenbaum, who helped spearhead the deals, acknowledged that the wary response that some nostalgic fans have voiced about the change is understandable. Still, Tannenbaum is resolute that the introduction of a more innovative and easier shopping experience will win over even the staunchest traditionalist.

Fanatics will phase in a tent system for selling trackside merchandise.
“Like with anything else, when you have change, there’s going to be concern,” Tannenbaum said. “But I would say this: If we deliver on what we’re offering here, which is a better shopping experience with more product that you can actually interact with, with a seamless checkout process, and add some entertainment to it, I don’t see any reason why the fans don’t ultimately come around and feel it’s a great change.”

Fanatics’ NASCAR deal, which, according to the request-for-proposal document will yield $26 million annually from trackside merchandise, is the e-commerce giant’s biggest venture into the in-venue realm, though it has managed major operations such as the NHL’s Winter Classic and the SEC’s football championship game. And the company has long run NASCAR’s e-commerce operations.

At press time, Fanatics had yet to reach a deal with Speedway Motorsports Inc. to extend the deals to the track operator’s eight facilities that host NASCAR races. However, both sides have said that they have a good working relationship and intimated that a deal may be reached during the year.

Steve Phelps, NASCAR executive vice president and CMO, wouldn’t reveal if or how the financial structure of the NASCAR deal with Fanatics has changed from the sanctioning body’s prior pact with Motorsports Authentics.
However, he said the new business model is better overall because, logistically, it will reduce redundancies and the amount of travel that was needed to run the hauler program.

Phelps said he “firmly” believes the move will help the bottom line of all stakeholders because a fan now “will have more opportunity to buy, and a greater opportunity to buy at different price points with different product.”

Fanatics’ operation will require about 100 workers, mostly temporary employees, manning it on race weekends. In a nod to the previous system, Fanatics will incorporate many of the employees from the hauler system into the new program.

Due to the timing of the deals, which were finalized in December, and how long it takes to pull off a major change, the tent system won’t be seen in its full form until the middle of the season.

In the interim, Fanatics will utilize the hauler system and incrementally phase in elements of the tents (a handful of haulers may remain even beyond 2015 to help augment Fanatics’ operations in the tents). Fanatics doesn’t expect the program to be fully fledged in all aspects until the 2016 NASCAR season.

The tents will help make up what Fanatics is dubbing a sort of shopping courtyard. There will be two, 250-by-33-foot-wide sides that will flank the courtyard and be filled with drivers merchandise. Phelps said smaller teams will be able to have their drivers represented at the tents as well. In the center of the courtyard, an approximately 4,000-square-foot tent will have specific departments for women’s gear, kids wear, diecast and memorabilia, plus a customization hub. A checkout tent will be located on the courtyard’s backside.

The previous hauler system required fans to point to the merchandise they wanted to look at and get an employee in the hauler to hand it to them. Fanatics and NASCAR believe the new system will drive sales by making options more accessible to fans, thereby allowing them to more closely and quickly browse gear.

To make the space tech savvy, the company will have computer kiosks so that fans can order merchandise to be shipped to their home if they either don’t want to lug it around the track or if a certain item is out of stock. The company also will entice fans with the customization hub, which will allow them to get their name stitched onto apparel and choose among color options. Fanatics also will introduce promotional efforts in the tents to create synergy between the company’s trackside and e-commerce platforms.

Looking to 2016, when the system will be fully in place, Fanatics wants to begin introducing more advanced options such as the ability for fans to order gear on their phone and have it waiting for them at the tent. The company also will look to add features that will enable fans in suites to order on their phones or tablets and have the gear delivered to them while they’re watching the race.

Tannenbaum said that while a panoply of new, high-end products will be introduced, prices will remain the same or similar for current garments and hard goods. He said Fanatics will use its rights with teams to create some unique products and garments “to try to add a little more flair to the product line.”

Fanatics will look to add an entertainment aspect to the courtyard experience by holding activities such as driver autograph sessions, corporate sponsor engagements, and by filming special segments with media partners.

Overall, NASCAR and Fanatics are confident that the company has the experience, employees and wherewithal to take the trackside merchandise program to the next level.

“We have a pretty good feel for what’s working in the NFL and college and the NHL, and so our plan is really to try to take what we’ve learned in those other spaces that have worked, and bring them into the NASCAR world,” Tannenbaum said. “That’s where I really think that the information we have gives us an advantage over most people.”

Wanted: Company willing to spend as much as $70 million a year promoting NASCAR. Qualifications: Aggressive and effective advertising history and an ability to connect with millennials while keeping Gen Xers and baby boomers involved. Must have expansive interest and demonstrated success in social and digital media.

Other than those prerequisites, replacing Sprint as the title sponsor of stock car racing’s top series should be a snap. In December, Sprint told NASCAR that the mobile provider would leave racing when its contract expires after the 2016 season.

In 2004, Nextel replaced tobacco brand Winston as NASCAR’s top backer. That 10-year, $750 million deal came

Sprint is pulling out at the end of the 2016 season.
Photo by: Getty Images
during a decade-long boom for the sport. In 2005, Sprint inherited the sponsorship after buying Nextel and, several years later, changed the name of NASCAR’s top circuit to the Sprint Cup Series.

“It’s the most coveted position in sports because of the positioning of it, so we’ll get out and see where we’re at,” NASCAR Chairman Brian France said during the annual media tour in Charlotte in January. Brent Dewar, NASCAR chief operating officer, told SportsBusiness Journal that the national presence of the sport and the length of the season make the sponsorship a unique opportunity.

Dewar and NASCAR want to have a new title sponsor committed by the start of the 2016 season. Then the company would have ample time to plan tie-in marketing and promotional campaigns for when the new deal started with the 2017 season. And, as every sports league and franchise knows well, bringing a sponsorship to life in a big way means as much as raking in the fee.

“The balancing act NASCAR will face is making sure they can identify and secure a partner that brings the best of all worlds: a solid financial investment combined with commitment from the new partner’s executive team to make this platform an active part of their business strategy,” said Brian Corcoran, president of Shamrock Sports & Entertainment. Corcoran, then at NASCAR, helped sell the sponsorship to Nextel, starting with an email to an intrigued marketing executive at Nextel.

NASCAR’s tweaks to the series championship format reinvigorated the sport.
Photo by: Getty Images
Nextel and then Sprint spent an estimated $70 million to $75 million annually on the sponsorship, advertising time during race broadcasts, contributions to the drivers’ points fund, and extras such as a traveling mobile tour visiting speedways on race weekends.

France, during his state of the sport address in January, said he was doubtful Sprint would leave its current three-year contract early, but already there is much talk of the lead sponsor cutting back. The mobile tour has been discontinued, based on recent reports. And, as marketing executives made clear in interviews with SportsBusinss Journal and others, human nature and logic dictate that as a lame-duck sponsor the company, no matter how well-intentioned, is unlikely to have the same focus.

“It’s been my experience that when somebody makes a declaration they’re out, they’re out,” said Mike Boykin, CEO of Bespoke Sports & Entertainment. The next title sponsor is, in his words, crucial. “We’re at a very important time — is the sport going to take the next step and grow? There will be a lot of scrutiny and due diligence by NASCAR [on the next title sponsor].”

Sprint reduced its spending in the sport during the three-year contract extension that started in 2014. One expert estimates a price range of $40 million to $50 million annually for the next title sponsor.

Whatever the figure, NASCAR has spent the past decade trying to regain the momentum that pushed it to peak popularity in ticket sales, TV interest and sponsor spending a decade ago. Executives tout NASCAR trailing only the NFL most weekends, but the Sprint Cup Series is once a week with all the stars in one event. Cumulative audiences for the NBA and Major League Baseball on a weekly basis are more than comparable. Between 2005 and 2014, average viewership for NASCAR Sprint Cup races slipped to 5.3 million from 8.5 million people.

Marketing executives cited several factors as challenges beyond the decline in attendance and TV audiences.
NASCAR must navigate the murky waters of sponsorship, problems of their own making. Prospective candidates will be ruled out because of conflicts with others in the sport (auto, beer and soft drink companies, to cite several obvious examples, could never have an exclusive deal in NASCAR). Or, another scenario might be that a company already supporting a team or track could be tempted to become title sponsor, but such poaching would be difficult to smooth over.

All sports, as France has said, suffered from the recession and sluggish economy starting in 2008, but NASCAR lost

more than most and has yet to fully recover.

Charlotte Motor Speedway began removing 41,000 seats this winter, the latest sign from tracks of downsizing caused by lagging ticket sales. Race teams have transitioned during the past six or seven years to combining multiple brands and companies as primary sponsors, a circumstance created when corporate backers became reluctant to foot the bill alone for a full season commitment.

On the upside, Fox and NBC begin a 10-year, $8.2 billion TV contract this season, an increase of nearly 50 percent over the previous broadcast rights agreement. Both networks seem committed to pushing the sport on various sister networks and through cross-promotion with entertainment shows and other programs.

Perhaps most important, NASCAR reinvigorated the championship format in 2014 with a simpler, reconfigured playoff format. Fans, race teams and others in the sport responded with enthusiasm. Add in the sponsor loyalty of racing fans, and the chance to have a brand mentioned constantly for a 10-month season, and the odds for finding a series sponsor improve.

“You’re out there front and center for months — that’s a hell of an opportunity,” said David Grant, co-founder of Team Epic. “Nextel and Sprint got their brand on the map with NASCAR. … It’s hard [for NASCAR] because so many logical prospects are already in the sport.”

Erik Spanberg writes for the Charlotte Business Journal, an affiliated publication.

Fox Sports is trotting out a new social media initiative around the Daytona 500 that incorporates several social media sites devoted to motorsports with the network’s on-air programming.

Using the hashtag #MyFirst500, Fox Sports and the multichannel network GarageMonkey want fans to share their fondest memories of Daytona.

Fox Sports and multichannel network GarageMonkey are asking fans to share their fondest memories of Daytona.
Fox Sports took a minority equity interest in GarageMonkey in the middle of last year and even licensed its motorsports brand, Speed, to the company. GarageMonkey powered by Speed combines YouTube channels with social media and e-commerce platforms.

The Daytona 500 campaign marks the first big effort between the two and will involve Fox Spots 1 and its digital properties as well as and the YouTube channels.

“The overriding vision on this to us is twofold. One is that it brings together all of the various pieces of and Fox Sports,” said Joe Franzetta, one of GarageMonkey’s two founders. “The second point that I think is interesting is that traditional media companies have always focused on the one-to-many broadcast message, but we’re now able, through this structure and campaign, to have people telling us why the Daytona 500 is important to them. The engagement that we’re getting from people even with minimal promotion has been interesting.”

This is not Fox’s only social media campaign around the race. The network is working with NASCAR and Daytona International Speedway on a similar campaign called #Daytona500Moments, which is a voting campaign to come up with the top Daytona moment of all time. The most popular moment will be revealed on Fox Sports 1 on Thursday, ahead of this year’s Daytona 500 on Sunday.

For the #MyFirst500 campaign, Fox Sports and GarageMonkey plan to make money through traditional advertising

and sponsorships, both via digital and on Fox’s TV outlets. Eventually, Franzetta expects the company to set up a dual revenue stream as he grows its distribution.

“This is the first of many things that we’re going to do with Fox and others within the motorsports area,” Franzetta said. “It’s an example of how the media landscape is evolving and how traditional media companies can work with new media platforms and pull all these threads together so that new media and traditional media can play together and serve the audience in a much more comprehensive experience.”

Franzetta believes that TV networks are looking for the type of social media interaction that his company provides, especially in this environment of trying to develop second-screen applications.

“These big media companies are trying to bridge into this world where YouTube creators are aggregating big audiences,” he said. “YouTube creators are also trying to bridge the world into traditional media and how they can participate and be part of the larger media effort. We are bridging that gap, specifically in the automotive, motorcycle and racing space.”