NASCAR rolls out new sponsorship model and turns to some familiar brands
NASCAR unveiled its new sponsorship model last week by signing four premier partners that might not be new to the sport but provide massive marketing budgets and activation capabilities that could increase the sport’s profile.
The signings of Busch Beer, Coca-Cola, Geico and Xfinity capped off a marathon year of planning, sponsorship pitches and negotiations.
NASCAR asked around $15 million annually over three- to five-year terms for the premier partner positions, sources said, but it was unclear how much incremental revenue NASCAR will see from the four brands signed because they all were already official partners. Coca-Cola, for example, was one of the sport’s biggest sponsors as its official soft drink with a spend of more than $10 million annually.
Daryl Wolfe, NASCAR’s executive vice president and chief sales and operations officer, said the sanctioning body is happy with the results and pushed back against the notion that the lack of new brands as premier partners could be indicative of a broader issue.
Cup Series sponsors
2017-2019: Monster Energy
“People have asked us who we talked to, and we were very selective — we intentionally talked to our best partners,” said Wolfe, who was one of the architects of the new model. “To the contrary [of the criticism], if you look at the announcements we’ve had over the last six months, we’ve had new brands coming in taking major positions, and we’re going to have some more in the future as well, so that’s not a sign [of softness] at all.”
Wolfe declined to say whether NASCAR will end up with more sponsorship revenue in 2020 after switching to the new model. Prior Cup Series title sponsor Monster Energy paid around $20 million annually for its deal. The energy drink brand will shift to a second-tier “signature” position and will have the designation of NASCAR’s official energy drink. It also will receive pit road signage at tracks.
NASCAR did not announce other second-tier signature partners or third-tier official partners last week, and Wolfe said that’s because his team has been working mainly to complete its premier partner deals in recent months. Wolfe said that a group of about six to 12 executives at NASCAR worked this year to put the new model together across departments including sales, creative, communications and finance.
Sources said NASCAR was originally seeking around $20 million annually from four to six premier partners, but Wolfe said the sanctioning body eventually landed on a system that would have three to five premier partners. While landing four for 2020, Wolfe didn’t rule out trying to bring in a fifth premier partner, but made clear that NASCAR was not out actively pitching the position.
Nick Kelly, Anheuser-Busch InBev’s vice president of partnerships, beer culture and community, said the premier level deal did not cost A-B a significant amount more given it was already the official beer of NASCAR, saying, “It’s pretty comparable to what we spend today.”
Verizon is one of the companies not currently in NASCAR that sources said the sanctioning body worked hard to land, but ultimately that deal did not materialize. NASCAR has not had an official telecom partner since Sprint left the sport after 2016, leaving open one of the biggest sponsorship categories in sports.
While some industry executives last week said they were hoping for new brands to come into the sport with the new model, others were complimentary of the new system and its future potential.
“Everyone has been preaching for years for new thinking, and they have delivered. Hopefully the industry can take time to appreciate what [NASCAR President Steve Phelps] and his team are trying to do and the difficulty and complexity of this effort,” Dan Griffis, president of global partnerships for Oak View, wrote in an email.
Steve Lauletta, the former Chip Ganassi Racing president, tweeted that the new system is a “smart and innovative approach to series sponsorship,” but flagged the fact of “no new brands stepping in to the series with this new offering to the marketplace.”
Wolfe said the four premier partners are “companies that are known to us, and care about the growth of the sport and our race fans.”
The new model represents a major step by Phelps and Wolfe in re-imagining the commercial model around the sport. As part of the deal, premier partners will have exclusivity at both the league and track level. But crucially for teams, the premier partners do not have any exclusivity over their sponsorship inventory, something teams were insistent on in order to not stymie their sales efforts.
Sources said NASCAR told companies they pitched who were also team sponsors that the sanctioning body did not want them to sign up for the new model if it would negatively affect their team deals. NASCAR spoke to various major companies in the sport about the premier partner opportunities, from consumer-facing ones to B2B companies such as FedEx, which is a major sponsor of Joe Gibbs Racing.
The model provides for assets across the league, track and media partner levels. Xfinity and Busch Beer will both add Cup Series race title sponsorships as part of the deals, a first for Xfinity, and all four brands will be involved with the NASCAR All-Star Race and NASCAR championship race, neither of which will have a sole title sponsor.
A-B’s Kelly said the track assets were attractive, which it will use to highlight different categories of products, including beer, wine and seltzer.
“It’s an extremely unique offering because of the opportunity to bundle together all of the racetracks and the league partnership,” Kelly said. “Given the growing categories of beer, wine, seltzer, etc., this is unique because it’s not like I can go to any other league and get all the teams [and their venues] included, which is kind of what the comparable would be. It’s been extremely enlightening to look at it in that way, so for us to step in, the value was certainly there.”
First Look podcast, with NASCAR discussion at the 13:45 mark:
For Xfinity, the deal allows it to start advertising at NASCAR’s top level after years of being the title sponsor of the sport’s secondary series. The Comcast-owned brand had considerable leverage as it already pays NASCAR around $10 million annually for the title deal, on top of Comcast’s nine-figure annual media rights fee to the sport, so it likely got favorable terms to step up to the premier partner level.
Matt Lederer, Comcast’s vice president of brand partnerships, declined to disclose the financial arrangements of the deal. But he said Xfinity wanted to do the deal because the brand is seeing positive key performance indicators from its sponsorship of the secondary series and thinks those figures can reach “another level” by being in the Cup Series.
Xfinity used GMR in its negotiations, while Geico used Scout Sports and Entertainment.
The new model and changes take effect immediately, with the series now called the NASCAR Cup Series. For Monster Energy, it ends its three-year run as the title sponsor of the Monster Energy NASCAR Cup Series.