Sponsorship in the Land of Tin Tops

[¡As-de-mim!]

The possible war in Iraq is looming heavy over men on the Winston Cup tour, and some of Michael Waltrip's first words yesterday after finishing third in the Winston Cup tour's third event of the season were to ask everyone to stand behind President George W. Bush.

If or when the war comes, Fox is expected to move its Winston Cup races to cable affiliate FX.

But the war should not have a major impact on the search for NASCAR sponsorships, according to Geoff Smith, president of Roush Racing.

He's nervous nevertheless. After all, Smith is negotiating contract renewals with four of Roush's five teams, with sponsors Pfizer, Rubbermaid, Dewalt and Citgo. And Smith is just one of several Winston Cup bosses trying to woo companies to ante up the $15 million or so it takes annually to run one of these stock car teams.

Actually, Smith says he's more worried about the looming economic impact of Toyota's leap into the NASCAR world, particularly if Toyota subsidizes its teams and drives down the value of sponsorships.

"In 1991, the war prospects pushed companies to pull back on their discretionary money, which generally is marketing and advertising. They waited to see what the outcome would be. And in 1991, there was much more concern about the outlook, because no one knew anything, and it just shut down everything in this garage. You couldn't have gotten a nickel from a sponsor for a couple of months there.

"But the moment the war occurred and we realized it wouldn't be a prolonged affair, then the marketing plans could go forward. And there was a big upswing immediately.

"There is some hesitancy to spend right now, but we look at some key transactions. We did better at Vegas last year than we did at all of Daytona, in terms of souvenirs, the number of transactions by people and the amount they spent, and that was right after 9-11. At first I thought Daytona would be the harbinger for the year. But Vegas was better. And this year here at Vegas, by Saturday morning we had already exceeded last year's sales.

"So the people around the sport haven't cut back on their souvenir spending, even though they still have to buy tickets and get to the race.

"As long as the sport is able to attract this kind of people, this is where the sponsors are going to be.

"What we have seen happen is that sponsors are having to take a hard look at their marketing mix and consider what was working and what wasn't. And when all the voting was done, they're still in NASCAR, because of these fans, their loyalty and their commitment.

"So what I think is happening is NASCAR is winning the war in terms of getting a share of the marketing budgets. The sponsors are protecting their Winston Cup investments, because this is one of the few investments they can make where they have a full marketing program for the whole year. They can use it all year, and then spin out derivatives around the country, for example, a 3-month marketing campaign taking Kraft into Safeway stores in a particular part of the country.

"And what I also see, particularly within our sponsor group, is that the level of management interaction with us has been elevated, from junior people to senior management actively participating in making the programs work.

"As long as the economy doesn't deteriorate any further, I feel we (as a sport) are really in pretty good shape."

That, of course, isn't the story elsewhere in the Winston Cup garage.

The sluggish state of the U.S. economy and problems in landing new sponsors have been a hot topic in many quarters of the Winston Cup garage for some time now. Andy Petree, for one, has had to close up shop.

And some car owners and drivers who are out working the sponsor market complain that NASCAR itself has been taking too many of the plum deals. They point to the expected deal between NASCAR and Dominos for the pizza company to become "The official pizza of NASCAR," as an example, insisting that's a $30 million package that could - perhaps should - be going to sponsor a Winston Cup team.

But Smith says the stock-car teams that do produce on the track are still able to make deals in the boardroom.

However Smith is worried about Toyota. "In the Truck series you have a phenomena that I say is one of the (potential) dangers I foresee with Toyota - after seeing what's happened with Dodge,"he said.

"When Dodge came in, NASCAR had a strategy that was very similar to what the SCCA used to have in Trans-Am, that we had to have manufacturers' involvement to make the series work. Then a manufacturer comes in and underwrites the team completely ... just like Ford used to underwrite us in road racing. Then what happens is the manufacturer says 'Maybe I can recover a little money by putting a sponsor on that car,' and they don't really care how much the sponsorship is sold for, because any dollar recovery is good.

"So if they sell the sponsorship at 10 percent or 15 percent of the market value, that drives the price of all the sponsors right down to that lowest level. And you can't go sell against that, no matter how good a program you have. You set a price, but then the sponsor says 'Well, yes, but I can go with this other operation for 15 percent of that.'"

Smith says that's exactly what happened in the Truck series with Dodge.

"And when Toyota comes in (next season) and does the same thing," Smith said, "we're in a situation where Ford has to step up to those same levels because I can't expect to get money for sponsorship at any greater level than any other top team."

While some car owners are sweating out sponsorship negotiations this spring (most prefer to have things lined up by late May to late June), Smith says "The better, high-performing race teams are still very valuable commodities. The sponsors know that the most authentic purchase you can make, that will tie your customer to the sport, is the primary sponsorship. So as long as the race team is performing well, those are still valuable."

On the Busch side, however, things are much tougher for car owners, Smith concedes.

"But first, the Busch costs only a third as much as it takes to run a first-rate Winston Cup program," Smith says. "But the TV results and the fan results over there are very solid. When we do the analysis, there are some real good value propositions between a front-running Busch program and some of the comparable investments that go into a major associate sponsorship in the Winston Cup garage."

• Mike Mulhern can be reached at mmulhern@wsjournal.com

[tanalised]

I can see the article being sort of related to the difficulties of sponsership but does this post belong here?

[¡As-de-mim!]

Sure it does. Open the moon-roof and think in a broader context.

[kmchow]

I'm not sure what does it cost to get title sponsorship with a CART team these days, but I guess the relevancy can be if Nascar sponsorship becomes cheaper for companies, perhaps fewer companies would choose CART and instead choose a Nascar team to back. Right now, it seems IRL has the drivers, as well as the more recognisable sponsors like Duracell, Reebok, Harrahs, now Target, etc... I've always said CART needs to work harder to find more recognisable sponsors like Nascar does.

[Fogelhund]

Well it goes without saying that this type of discretionary and intangible advertising, it is always going to come under pressure during difficult economic times.

Unfortunately, there are some compelling reasons to believe that the US Dollar, the economy and the market will continue to struggle for a couple of years to come. Not really great news for race fans, nor anybody really.

[Snrub]

It was just an excuse to post this: "...some of Michael Waltrip's first words yesterday after finishing third in the Winston Cup tour's third event of the season were to ask everyone to stand behind President George W. Bush."

To back his sig: "Ignorance is Blix."

If two rednecks (Waltrip & Bush) think it's a good idea, then it must be!

[¡As-de-mim!]

Too bad Neville Chamberlain wasn't a redneck. Happy to see that you've returned from your human shield mission. What a bunch of maroons.

[muggle not]

We did some racing in Trans Am. How can I use this info to pursue sponsorship again.

[¡As-de-mim!]

"As long as the sport is able to attract this kind of people, this is where the sponsors are going to be.

[¡As-de-mim!]

Originally posted by Snrub
It was just an excuse to post this:

And this:
Blix 'hid smoking gun'

The British and US ambassadors plan to demand that Hans Blix reveals more details of a huge undeclared Iraqi unmanned aircraft, the discovery of which he failed to mention in his oral report to Security Council foreign ministers on Friday. Its existence was only disclosed in a declassified 173-page document circulated by the inspectors at the end of the meeting — an apparent attempt by Dr Blix to hide the revelation.

[blueflagger]

Of course a war will affect sponsorship dollars; the recession is already doing that. We'll just see the money come from somewhere else. All those marketing folks out there can always find a way to convince a company to sponsor cars. There have been cars with Postal Service, military, and US Savings Bond sponsorship. The French Lottery sponsored F1 for a long time. It will be interesting to watch what the teams come up with.

[¡As-de-mim!]

This is what the Pentagon has decided on: