NASCAR hits the market with new multi-tier sponsorship model

LewTheShoe

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NASCAR president Steve Phelps says the sanctioning body has already met with numerous companies to introduce the new multi-tier sponsorship program, which is planned to replace the single-entitlement sponsor model as early as 2020. Sports Business Journal has some additional background on how it is supposed to work...

NASCAR Floats New Model
Series hits the market with multi-tier sponsorship inventory that would replace series title sponsor system

By Adam Stern
November 26, 2018
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.”
https://www.sportsbusinessdaily.com/Journal/Issues/2018/11/26/Leagues-and-Governing-Bodies/NASCAR-partners.aspx
 

Charlie Spencer

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It's good that NASCAR wouldn't be dependent on a single source for a large chunk of money, but I don't understand how this will work overall. I'm not familiar with the NCAA, so comparisons to its tiers don't mean anything to me. I get the bit about applying branding to the West Coast stretch. Otherwise, as a sponsor, what exactly am I getting for my money? What's my name getting hung on? Will each sponsor be negotiating individual rights to different assets and properties? I'll need to see more examples to 'get it'.

Still, I don't really care as long as the cars keep running and someone distributes the images to me affordably. Whatever they come up with can't possibly result in less visible sponsors than Monster has been.
 

IanMcVittie

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It will be interesting to read what neutral parties have to say about this when it is rolled out. Hopefully it will be good for Nascar in many respects instead of another ill thought out fiasco.
 

IanMcVittie

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That's an awful lot of words for such little explanation. There just aren't enough clear details yet to really form an opinion about it. But as long as it works, I'm all for it.
It is to Nascar’s benefit to keep things as ambiguous as possible. That way if/when it blows up or doesn’t pan out they can pretend all is well.
 

kkfan91

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TV visible signage...what are they going to do paint the track?
 

IanMcVittie

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Have a sponsor next to each "turn" on the wall at every track is my guess (ex: Coca Cola turn 1)
There could be the Poise Pads Pits and maybe other things like turn 1 brought to you by your friends at AARP. My guess is at this point Nascar is just throwing out trial balloons to see if anyone is interested.
 

IanMcVittie

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As soon as I read "new sponsorship model" I kinda thought this is what they meant. I like it I think it's a good idea... but... no more monster girls? :(
I’m hoping the estate of Mr Whipple will buy naming rights to the restrooms at a couple of tracks.
 

ToyYoda

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Looking forward to seeing who wins the Pennzoil Geico O’Reilly Coca-Cola AAA Bass Pro Shops Jimmy John’s Axalta Bank of America Fastenal Credit One Cup. Of course, we have to wait until the 2020 PGOCCAAABPSJJABOAFCOC Series Schedule is released to see if any more short tracks will be added.
 

Joe Pisciotta

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Looking forward to seeing who wins the Pennzoil Geico O’Reilly Coca-Cola AAA Bass Pro Shops Jimmy John’s Axalta Bank of America Fastenal Credit One Cup. Of course, we have to wait until the 2020 PGOCCAAABPSJJABOAFCOC Series Schedule is released to see if any more short tracks will be added.

I actually did Laugh Out Loud on that one, classic.
 

RacerrecaR

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As soon as I read "new sponsorship model" I kinda thought this is what they meant. I like it I think it's a good idea... but... no more monster girls? :(
No worries...Monster Energy Girl NASCAR Minivan Sports Car Series Racing presented by Monster Energy will be a thing in 2 years.
 

Charlie Spencer

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As soon as I read "new sponsorship model" I kinda thought this is what they meant. I like it I think it's a good idea... but... no more monster girls? :(
They were going anyway, regardless of the model or sponsors that replaced Monster.
Could this be why nascar wants to buy ISC?
There was something in the article about spreading this sponsorship model across the tracks, so that may be one reason for the proposed purchase. I think a potential sale is a bigger factor.
 

StandOnIt

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I'm really not going to miss them, way too artificial and staged to me. I like the wife and goofing around with the kids in victory lane the best myself. Kyle throwing his boy up in the air and Joey putting his in the Champions trophy will be photos that hang around for a long time.
 

Snappy D

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Since everyone is lamenting the loss of the Monster Girls, that red headed Monster Girl..... ( I am sorry I dont know her name)
wolf-of-wall-street-02.jpg
 

IanMcVittie

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Hell I just want less commercials during the race, and I hope NBC is cutting back on gerbil feed.
There is a small but faithful group like you that will watch Nascar programming regardless of the amount of comnercials or broadcast or race quality. Nascar should be ecstatic to have loyal followers like that and if they could only replicate folks like you but about a quarter of your ages it would be perfect.
 

IanMcVittie

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Hey, it just occurred to me to ask: will this new sponsorship model promote an edgy lifestyle? I recall being told a couple of years ago that was important. :p
In the past Lew has spoken of Nascar lifestyle fans but declined to elaborate on what that means. IDK what an edgy lifestyle is either
 

DIDIT

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"NASCAR is asking around $20 million for top-tier slots in its proposed new sponsorship model, close to double original estimates, according to sources."

Wow, what an amusing way to introduce us to this new concept by the author. NASCAR can ask whatever it wants, but what really matters is what does it sell for? I only see this as a way we will be feed even more advertising crap every race weekend. One day I envision each port-o-let at the track to have its own sponsorship and the broadcasters will tell us who is the sponsor of each and every lap of a 500 lap race.
 

IanMcVittie

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"NASCAR is asking around $20 million for top-tier slots in its proposed new sponsorship model, close to double original estimates, according to sources."

Wow, what an amusing way to introduce us to this new concept by the author. NASCAR can ask whatever it wants, but what really matters is what does it sell for? I only see this as a way we will be feed even more advertising crap every race weekend. One day I envision each port-o-let at the track to have its own sponsorship and the broadcasters will tell us who is the sponsor of each and every lap of a 500 lap race.
I agree that asking and getting are 2 different things. I think Nascar will tout this new model as a great success when in reality it was probably just to give them an out for being unable to secure a title sponsor.
 

LewTheShoe

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TV visible signage...what are they going to do paint the track?
Signage is already in place at every track. This is just to bundle it with other things. Remember Monster Energy's complaint about needing to negotiate with many different parties? Trying to avoid that.

In the past Lew has spoken of Nascar lifestyle fans but declined to elaborate on what that means. IDK what an edgy lifestyle is either
I have... but it was in the days of the SkoalBandit identity and the AtomicPunk identity. And I gave numerous elaborations too... as I'm sure you recall.
 
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Spotter22

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I agree that asking and getting are 2 different things. I think Nascar will tout this new model as a great success when in reality it was probably just to give them an out for being unable to secure a title sponsor.
Thats an assumption, why must you always project a negative outcome?
 
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