As part of an overall initiative to upgrade sponsorships with more lucrative deals, Nascar has opened negotiations for a new agreement in sports' hottest category--telecommunications.
According to executives close the sport, Nascar probably will not renew its deal with MCI WorldCom, which ends this year. Nascar officials have had introductory talks with Sprint Corp. and AT&T Corp.
When Nascar inked its deal with MCI in 1996, the car racing organization gave the teleco complete exclusivity for all aspects of its business--long distance, Internet, cellular, phone cards, hardware and software. Now Nascar wants to break up these areas and sell them off to different marketers to maximize the rights fees.
According to IEG Sponsorship Report, MCI paid around $1.5 million annually; MCI executives couldn't be reached for comment.
"We don't necessarily have a dollar amount in mind for rights fees," said Brent Yormark, managing director of corporate marketing at Nascar. "We are not rights-fee driven; we are activation driven."
What that means is signing up sponsors that will promote the sport through dedicated advertising, cross-promotional campaigns with Nascar and time on the broadcast outlets that air races.
MCI, for instance, has been doing only a limited amount of promotion for the sport, mostly in the business-to-business arena.
For all sports, telecommunications is an exploding segment, particularly in promoting the Internet and other personal communications technologies.
MORE REVAMPING POSSIBLE
Nascar also is considering a revamp of two other categories--fast-food and pain relievers. Currently it has McDonald's Corp. as a partner, in at around $1.5 million annually, according to IEG. But because of the restaurant chain's extensive marketing relationship with Walt Disney Co. for theme parks, films and home videos, McDonald's is limited to one small promotion a year.
In addition to higher rights fees, Nascar wants the new partner to plan two major promotions, spend~ing some $10 million to $15 million in media support for each effort.
A regional headache-powder brand, Goody's, has Nascar rights in the pain-reliever category. But Nascar might want to grab one of the big national brands.
Nascar is seeking to significantly increase its number of sponsors, which now stands at 42 and includes Coca-Cola Co., Anheuser-Busch, Visa USA and Home Depot.
Mr. Yormark has identified some 2,000 companies in 110 new categories Nascar wants to pursue, including auto insurance, candy, footwear, frozen foods, overnight delivery services, hotels, rental cars and real estate.
Rising TV ratings over the past few years have significantly increased the value of the sport, according to Nascar. It recently vowed to consolidate its variety of TV outlets to achieve increased broadcast rights fees and more consistent promotion for the sport.
Copyright March 1999, Crain Communications Inc.