Nascar sponsors still on track

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The tragic death of racing legend Dale Earnhardt has led to calls for stronger safety measures. But little of that pressure is coming from marketers, who say they remain committed to their Nascar sponsorships despite four fatal crashes in less than a year.

"It was a very unfortunate incident and our heart goes out to the family," said Geoff Cook, a Pfizer spokesman, "but we're going to continue to sponsor Nascar and use it as an important way to reach men with an important message about their health."

Pfizer isn't alone in that view. M&M/Mars, Circuit City and Home Depot, among others, will stay loyal to the sport.

Some companies, such as Home Depot, have made statements about increasing safety measures, but as of last week, no sponsors have said they will drop out. Jim Andrews, exec VP of IEG Sponsorship Report, expects companies to put some heat on Nascar following the accident. "They are going to put more pressure on the officials at Nascar to do what they can to increase safety."

While Nascar is one of the country's most perilous sports, its highly devoted fan base remains a driving factor behind its sponsorship success. According to Newport, R.I.-based Performance Research, 72% of Nascar fans buy products that support the sport. And 40% of fans will switch product loyalties to a Nascar-associated brand. The examples of die-hard supporters are endless. When Procter & Gamble switched its Tide sponsorship away from driver Ricky Rudd in 1999, Rudd devotees didn't just shun Tide; many boycotted all P&G products. The accident with Mr. Earnhardt sparked negative e-mails to Coors Brewing Co., since the driver of a Coors-sponsored car was initially blamed in the crash. The M&M car, which was prominent in most of the crash pictures-a seemingly incongruent icon to be aligned with such a tragedy-so far has not drawn any fire.

"Part of the sale for Nascar [sponsorship] is on-air time. ... If a car is burning, it's not the best depiction of your brand. But it's also air time, to be quite honest," said Jarrod Moses, CEO of Alliance, a Grey Global Group agency specializing in entertainment sponsorship and development. "I would say it does not injure a brand in any way if a car is in an accident or burning. But if it's a losing car, that's much more detrimental to a brand. ... If a car stalls or loses, it's seen in a worse light ... because people equate crashing and burning with pushing the limits. If a brand is endorsing pushing the limits, that's seen in positive light."

Nascar sponsorships have evolved from beer, auto parts and tobacco in the 1970s to now include a wide-range of consumer goods, as well as business-to-business and Internet brands. "Fans know that if they support the products, the sport will get better and better," said Tom Cotter of motor sports marketing agency SFX/Cotter Group, Harrisburg, N.C. Nascar races are the only place where "grown men would pay $25 to walk around with shirts that have the [logo] of a laundry detergent," he added.

And as more sponsors clamor to get on board, endorsement prices have skyrocketed. Mr. Cotter estimates the annual rates to endorse a top-notch driver have grown from $6,000 in 1963 to $3 million in 1987 to numbers as high as $15 million currently. The price tag for a primary sponsorship slot on just a racecar, separate from driver and other endorsement fees, ranges between $8 million and $15 million. It's estimated Dodge spent $60 million on a recently announced multiplatform endorsement deal. UPS' sponsorship deal is targeted at $15 million annually. According to IEG, Nascar, the racing teams and the racetrack combined reaped about $558 million in sponsorship revenue in 2000.

Marketers flocking to Nascar follow spikes in popularity and attendance. The sport had a 97% attendance growth from 1990 to 1999, from 3.3 million to 6.5 million. Women make up 38.5% of that audience according to a 1999 ESPN Chilton Sports Poll. The sport also pulls in strong TV ratings. During last week's Daytona 500, Fox Sports marketing scored a Nielsen 10 rating/24 share, the highest Daytona numbers since CBS posted a 10.5/29 back in 1979. The popularity of Nascar, and the lure of its individual drivers, are what led Fox, NBC and Turner Sports to enter a six-year, $2.8 billion TV contract. The new deal dramatically increases the number of races that will be seen on network TV.

Although some direct sponsors of Mr. Earnhardt are rethinking their entire marketing strategy, most other companies have just pulled back on ads for a week, or have toned down their creative. Nascar itself even put its recently launched branding campaign on hold, while Miller Brewing Co.'s Miller Light will change the words to its campaign from "My heroes burn rubber, they bite steel, they bleed octane. They risk their life in every turn, on every track, in every race," to gentler terms.

Motor-sports observers and dealmakers say savvy companies also have a contingency plan in place in case of such a tragedy. Ardy Arani, managing director at Championship Group/Atlanta, a sports-marketing firm, said he works in a "disaster-scenario plan" for his clients in case a driver is injured, incapacitated or precluded from racing.

Experts agree Nascar and the broadcast outlets will still receive sponsor support, since most companies know what they're getting into. And most fans believe, despite a period of mourning, the race must go on.

"If Dale was here today, he would encourage people to get further involved. Nascar will do well by it," Mr. Moses said. "It brought some emotion to the sport finally, where before it often was thought of as just a bunch of metal on the track, now there's more heart in Nascar." M

Contributing: Wayne Friedman, Laura Q. Hughes, Alice Z. Cuneo, David Goetzl and Hillary Chura

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