The move gets Diageo closer to its long-term goal of leveling the marketing playing field with beer, which dominates the racing circuit, and could potentially pave the way for other spirit marketers. With the three-year deal, Crown Royal also gets TV exposure since IROC just sealed a one-year TV pact with Speed Channel, a cable subsidiary of News Corp.'s Fox.
This marks the first time a hard-liquor marketer has been allowed a title sponsorship for any sport, although Diageo Smirnoff Ice Triple Black has sponsored Winston Cup Driver Matt Kenseth and the Roush Racing Team. Nascar has a long history of partnering with beer marketers for races but has banned spirits marketers from top sponsorships. Nascar did not return calls.
"It's something we've been looking for" for several years, said Rob Warren, VP-marketing for North American Whiskey at Diageo. "Motor sports is a particular interest for our consumer. And motor sports is second only to the NFL for viewership." He wouldn't disclose the terms of the deal, but those close to the marketer estimated the total outlay for sponsorship fees and marketing support at $5 million a year.
Diageo has been especially aggressive in finding ways around marketing limitations. In May 2002, the marketer began building a network of unwired TV networks to run its advertising across some 400 stations. It also snared a deal with the National Football League's Washington Redskins team to get signage-and TV exposure-on Fed Ex Field.
"Fox was willing to accept a distilled spirit on their telecast, whereas ESPN would not," said Jay Signore, IROC president, noting that all the cars will be white with Crown Royal signage to provide better contrast for the three night races. "Maybe we'll be breaking the ice and that will allow more spirits [marketers] to get into the sport."
Diageo's Mr. Warren said the company "as a corporation shows they are very responsible partners with responsibility messages always a part of every communication we have. For this particular event, our responsibility statement fits nicely-`be a champion, drink responsibly."'
Yet, critics contend that distilled spirits marketers are edging closer to crossing the marketing line that would spur Congress or other regulatory bodies to step in and ban all alcohol from sports sponsorships. "If distilled spirits companies get too aggressive, I'm convinced Congress or the Federal Trade Commission will get involved and say, `We don't want you to be on TV,"' said one beer industry executive. "They could get greater marketing and legal limitations than they have now."
The fact that Diageo has made an inroad to auto racing is worrisome to George Hacker, director-alcohol policies project for the Center for Science in the Public Interest. "Clearly there's a certain disingenuousness on Nascar's part given that they're such huge promoters of beer," he said. Mr. Hacker added that aside from what he calls a "fundamental disconnect between alcohol and driving," his concern is that "if liquor were as acceptable as beer then we conceivably could have an explosion of problems that mirror the level of problems associated with beer drinking."
Diageo's agreement provided a huge boost to the 30-year-old series after TruValue ended its 14-year run as title sponsor. The spirits giant has talked with IROC for three years, but scheduling incompatibilities and Diageo's earlier attempt at getting into a Nascar series kept the two apart.
In signing the deal, Diageo also comes full circle with racing's origins: The sport evolved from local races among moonshine bootleggers.
contributing: rich thomasellip