Monster Energy has requested another extension on its renewal decision with NASCAR, according to sources, putting the brand’s title sponsorship of the sport in question.
Monster, which signed on as premier series title sponsor for the 2017 and 2018 seasons for around $20 million annually, was thought by many close to the sport to be near a renewal earlier this year. But sources now say the renewal has become less assured as the sides haggle over deal points such as the length of a renewal.
Mark Astrachan, managing director of Stifel Financial, which covers the beverage industry, predicted in a note he co-wrote earlier this year that Monster would ultimately renew.
“I thought they were going to do it — that’s obvious with what we wrote,” Astrachan said when contacted last week. “The question of doing it [or not] is simply what they’re going to get out of it and if what they’re getting out of it is incremental to what they could be doing on their own.”
Monster has largely refused to talk to media about the NASCAR deal, though company executive Mitch Covington told ESPN at the Daytona 500 that no decision had been made. Neither Covington nor NASCAR commented for this article.
Monster’s original deadline for whether it would renew the deal for 2019 and 2020 was at the end of December last year, but NASCAR granted Monster an initial extension that took the decision into early this year. NASCAR President Brent Dewar confirmed in recent weeks that NASCAR granted Monster more time but declined to say how much.
However, the initially extended deadline appears to have passed, as sources said Monster recently asked for another extension as it considers whether some of the changes to its existing deal this year has sweetened the pot to its liking. It was unclear whether NASCAR would accept the request, because executives would need a firm answer soon as it begins planning for 2019.
There were changes to Monster’s activation seen at the season-opening Daytona 500,including signage around the track’s flagstand, and Monster’s logo on the lanyards of NASCAR credentials.
Monster got a late start on planning for its first season last year after only signing the title sponsorship a few months before the 2017 campaign started. But even as it starts its second year in the role, some racing executives have criticized Monster’s level of activation in the sport.
Monster had its large smokeshow and sampling activation program going on at Daytona, though the area was running only on Saturday and Sunday of the 500 weekend whereas several other brands started activating Friday or even Thursday. Monster also has had to deal with the reality of NASCAR’s crowded beverage space, where Coca-Cola is a major player, among others.
Monster is used to getting more control of the entire feel of an event in some of its other sponsorships, like Monster Energy Supercross. However, NASCAR has many more stakeholders, forcing Monster to negotiate between the sanctioning body, tracks, teams and media partners.
