From Tobacco Road to the information superhighway -- What's next?
By JIM UTTER
ThatsRacin.com Writer
So what's next?
Well, Nextel, for one.
Just when it appeared NASCAR had tapped into all the money streams it could, R.J. Reynolds Tobacco Co. opened the door to new cash flow this race season.
RJR's Winston brand has sponsored NASCAR's premier Winston Cup series since 1971, but the growing number of tobacco lawsuits and a shrinking market share prompted the company to reconsider its role.
In January, Winston officials informed NASCAR that it was free to find another sponsor for its top series.
It didn't take long.
In June the sanctioning body unveiled a 10-year, $700 million agreement with Nextel Communications to take over the sponsorship of what is now known as the Winston Cup Series beginning in 2004.
The deal has many advantages for NASCAR, including a distinct one that Winston could not offer. The 1998 master settlement agreement between the government and tobacco companies prohibits advertising to minors on radio and television.
Winston has been unable to advertise its involvement in the Winston Cup series, but Nextel will have no such restrictions. That change alone will provide a new influx of cash.
"Nextel is a perfect fit for NASCAR because technology is an untapped growth area for our sport. It is an area of significant interest among all consumers everywhere," said NASCAR chairman Bill France Jr.
"Nextel is innovative, fast-growing and one of the best-run companies in this industry. Nextel will be able to promote our drivers, our teams and tracks in all forms of media and to all NASCAR fans.
"These efforts will help propel NASCAR to new audiences and new markets. Nextel's participation will definitely benefit every member of the NASCAR community."
Nextel CEO and President Tim Donahue said he looked forward to the new partnership.
"Nextel is revved up to write a new chapter in NASCAR history. It's like we're joining one of the largest, most-passionate families in America, one we've admired for some time," he said.
"It's no surprise why we at Nextel would be so interested in becoming part of the NASCAR team. Simply put, it is the most popular and exciting sport in America, and it has the most-dedicated fans."
While all corners of the NASCAR world – fans, participants, owners – will soon see results of Nextel's involvement, the brand identity Winston developed over 30-plus years will be hard to push aside.
"It's been a wonderful tradition. RJR has done a great job," Donahue said. "We intend to get in there from the get-go and put a lot of marketing dollars behind it.
"I hope in the very near future it will be the NASCAR Nextel Cup on everybody's list."
Already, plans are being made for changes at NASCAR tracks. Signs will change and color schemes will, too.
Winston's traditional red and white logos will be changed to predominantly yellow and black next season.
While the face of the sport may not change, Winston's departure will be felt throughout the inner circle of NASCAR.
Winston has developed important relationships with drivers and car owners over the years that will be hard to replace. The tobacco company also has taken the lead role in the annual Winston Preview – a pre-season gathering of drivers and fans, traditionally held in Winston-Salem, N.C.
Winston was also the cornerstone in the development of NASCAR's annual Winston all-star race, which began running in 1985.
The all-star race will continue next season, but in exactly what form is still to be determined. Nextel, however, is expected to play a big part in the all-star event's future.
In the months leading up to its official "debut" next season, Nextel will be working to develop its image and brand recognition among the NASCAR faithful.
It will do so hoping to expand its customer base, as many of the companies already involved in NASCAR have done so successfully.
"The youth market is one of the most-aggressive adapters of new technology. Sixteen- to 20-year-olds, they don't remember a time when there were not wireless phones. That's a change in the fabric of this country that shows that wireless is becoming a pervasive technology; you couldn't kill it if you tried," said Tom Kelly Jr., Nextel's chief operating officer.
"In terms of how we look at our technology integrating with NASCAR, we have an opportunity to integrate at almost every level, whether or not it's helping the drivers communicate with their pits, whether or not it's helping the track operations people communicate better, or, frankly, how we take the action that's on the race track and make that available to people both at the race or to fans who are not attending the race."
In any event, NASCAR's agreement with Nextel appears to put the sport on a sound financial footing for the immediate future.
NASCAR vice president George Pyne believes the sport's value continues to increase every season.
"There are more Fortune 500 companies in NASCAR than any other sport. ... NASCAR team involvement has never been more valuable in the 53 years of the company," Pyne said.
"The affiliation with a team is an emotional affiliation that leverages the equity the sponsor has in a team and influences people's buying decisions. Sponsors invest in NASCAR because sponsorship helps them sell product as well as gives them more awareness.
"That investment continues to grow."
What lies ahead
While NASCAR's financial foundation may be secure for the time being, there are problems lurking throughout its top three series.
Because of a shaky economy, team sponsorships are becoming harder to find and keep. That has become particularly evident in the Busch and Truck series.
Sponsorships in Winston Cup continue to skyrocket in price. So does the cost of racing.
That is an area NASCAR and owners all want to better address.
"When you look at disparity in other professional sports and then you look at our sport where the disparity is relatively small, we've done an excellent job at trying to keep things as even as possible between teams," Pyne said.
"Not everyone will be equal on the race track and not everyone will be equal off the race track, but our job is to keep the gap as manageable as possible.
"We've done a good job – we've not been perfect – but we've done a good job."
Many team owners would like to see concrete steps taken to reduce the expenses they incur as a result of NASCAR rule changes and other mandates.
"We need to control engine RPMs and we can't keep cutting the bodies off these cars. NASCAR has to stop the changes that make us cut the bodies off these cars," said team owner Ray Evernham, who fields Dodges for Bill Elliott and Jeremy Mayfield.
"To do that we have to figure out a way to take the aerodynamics off these cars and we've got to cut back engine RPMs.
|
