NASCAR floats new model
NASCAR is asking around $20 million for top-tier slots in its proposed new sponsorship model, close to double original estimates, according to sources.
NASCAR announced this year that it is considering a multi-tier sponsorship model to replace the long-held premier series title system, with a potential debut in 2020 after Monster Energy completes its final year under the current model.
The plan is to move away from one title sponsor in place of a tiered system, similar to the one used by the NCAA. The premier series would simply be called the NASCAR Cup Series.
NASCAR President Steve Phelps, during his state of the sport news conference at the season finale this month, used more definitive language on the likelihood of the system being implemented, saying “we will transition to this new model.” He said NASCAR has “had a significant number of meetings with potential sponsors.”
NASCAR has been pitching big spenders already in the sport, among others. One name consistently mentioned as a brand likely to land a top-tier slot is Coca-Cola, which already has an official deal with the sanctioning body through 2023. NASCAR has more than 50 official sponsors.
Sources say a template for the Tier 1 package the sanctioning body has been pitching to brands comes in around $20 million annually. That includes $15 million worth of assets across the league and tracks, plus a minimum $5 million media spend. That template is for brands that are new to the sport; the terms could look slightly different for brands that are already NASCAR partners.
When the model was originally announced, sources projected the sponsorships would sell for around $10 million each.
NASCAR is looking for around five top-tier partners that would get exclusivity at the league, track and potentially media-partner levels. The new model would be unique in that it would include assets that have never been packaged with the series sponsorship. Those include title deals for NASCAR Cup Series races for top-tier partners, TV-visible signage and — in a new twist — opportunities to have brands involved with parts of the season that previously didn’t have a sponsor, like the annual western swing.
The new model could bring in significantly more revenue than the $20 million that Monster has spent annually. However, title sponsors under the old model mainly only received assets from NASCAR, while the new top-tier deals would bundle assets from tracks and media partners, which would share in the revenue.
NASCAR declined comment, but GMR Marketing President Tyson Webber said the system has potential.
“Will it be a tough sell? Everything is a tough sell right now,” Webber said when informed of the terms. “But do I think it’s unique and has the potential to drive value for the right brands? Absolutely.”
Until now, all race title sponsorships were sold separately by tracks. NASCAR has said teams eventually will have assets integrated into the model as well, but that aspect will be far more difficult to pull off, due to competitive balance concerns. The sanctioning body has not yet explained how it would make that happen.
“It’s a really interesting proposal that, in my opinion, needs a little more definition, which will probably happen as we have interested parties and brands getting more involved,” Webber said. “There’s a lot of questions as to how these groups are coming together, how the financials will be allocated, and most importantly for brands, the assets, restrictions and rights that they’ll be afforded.”