Business backfire: NASCAR hits a speed bump

“In many circles, ABC Sports is credited for getting NASCAR to where it was in the 1970s and '80s for all the promotion they did,” said Dean Kessel, director of NASCAR Nextel Cup Series marketing for Sprint Nextel.

“And ESPN, whether it’s college basketball or the X Games, they know how to build sports," he said. "From our perspective, things are very, very good.”

True, NASCAR sponsors like Sprint Nextel have basked in the sport’s blistering rise from backwater passion to Madison Avenue player. There’s no better way to trace that story than to follow the changing face of NASCAR advertisers — from Winston cigarettes to NicoDerm patches, from STP motor oil and Goody’s Headache Powder to Gulfstream jets and Prilosec OTC.

Car tops, track walls and driver coveralls remain splattered with logos, alive with brand names. No other sport boasts a tighter knot between fans and advertisers. And that bond is only growing.

Some numbers:

• Sprint Nextel customers who are NASCAR fans generate 20 percent more revenue for the company that do Sprint Nextel customers who are not NASCAR fans, says the company.
• An Office Depot joint promotion with NASCAR sponsors 3M and Sharpie produced sales increases of 26 to 45 percent, according to the company.
• Sponsorship of NASCAR teams and events in 2005 was collectively valued at $5.07 billion in advertising exposure for sponsors' names and brand logos, up from $4.2 billion in 2004, according to NASCAR. Figures for 2006 are not yet available.

Compared to the National Football League or Major League Baseball, the fan-sponsor link simply reaches a higher consciousness.

“When the Denver Broncos take the field, it’s the Broncos players taking the field,” Kessel said. “When Jimmie Johnson takes the track, it’s Lowe’s taking the track.”

The old guard are grumbling
On the topic of the recent drops in TV ratings and some track attendance, Kessel said he doesn’t “see any kind of direct connect” between those trends and current sponsorship strength. He added: “We look at the aggregate of what we’re doing, and the sum of all for us is very positive.”

But in name only, one disruption may be looming at a time when some of the old guard already are grumbling. The recent merger between Sprint and Nextel means the sport’s championship series and its trophy may undergo its third name change in five seasons. NASCAR chairman France has said: “It’s not ideal. In a perfect world, you’d like to not be moving your series name around.”

“It will be Nextel through 2007. Beyond that, you do all the (due diligence) you typically do with any type of brand change,” Kessel said. “We don’t take this move very lightly. We’re respectful of the fan base, very respectful of the sport’s heritage.”

Those sensitivities have never been more critical, with NASCAR aiming to launch new races in New York City and Seattle, with more drivers hailing from California than any other state, with track seats sitting empty in Georgia, North Carolina and Texas, with more TVs tuned elsewhere in NASCAR-friendly homes.

“I don’t think a one-year snapshot tells the whole story. Trends are much more important,” said David Carter, executive director of the University of Southern California Sports Business Institute.

“Having said that, if some of the refinements don’t help them stop what appear to be small erosions in certain areas, then it become problematic," he said. "I think they’ve identified that they have to continue to lean to the tape and make sure that they are shoring up sponsorships, TV ratings, their in-venue experience — and do it without alienating their fan base.”

When you’re talking NASCAR country, you’re always talking money, even in slow years. At Texas Motor Speedway this month, track officials covered those empty swaths of backstretch with ad-emblazoned tarps — a “bird in the hand,” as TMS president Eddie Gossage put it.

“Whether we're going to sell them or not, I don’t know,” Gossage said at the time. “But we got revenue for 'em.”

MORE FROM U.S. BUSINESS

U.S. business Section Front

BofA repays all of government bailout funds   Woods scandal a boon to Internet publications Feds target rating agencies’ role in meltdown How Apple gets it all wrong, and still is on top   eBay official: Employees shared Craigslist data Tiger Woods TV ads vanish from prime-time Boeing’s delayed 747-8 completes engine test Battle lines forming over TARP extension Obama outlines bailout for Main Street Morgan Stanley shuffles executive team U.S. business Section Front   Add U.S. business headlines to your news reader: