UPDATE: NASCAR has begun sharing provisional plans for its new sponsorship model with potential partners and industry stakeholders, according to sources, ahead of its possible implementation in 2020.
The model is still being developed and the proposed structure could change. But it's being envisioned as having five tiers, with a top tier that would have around four to six brands, which would receive exclusivity at the league, track and potentially media-partner levels.
While NASCAR vaguely outlined the model to the public in recent months, sources said the sanctioning body has begun briefing potential sponsors plus key industry executives from teams, tracks, agencies and media partners in recent weeks. It's unclear whether NASCAR divulged pricing during its presentations, but sources said they envision that top-tier slots would go for around $10 million annually.
How the sanctioning body would divide current official sponsors into different categories under a new model is still not finalized, but the plan is to move away from one title sponsor in place of a tiered system like the NCAA's, where the top-tier partners acquire rights to the league's top assets, including possibly race title sponsorships and camera-visible signage, while lower-tier partners would get potentially less visible or valuable assets.
A $10 million asking price for a top-tier slot compares to Corona, California-based Monster Energy paying $20 million annually for its premier series title sponsorship. So the belief is the series will be able to generate more sponsorship revenue from multiple levels of partners rather than having one title partner and subsequent series sponsors.
It's unclear how many companies to which NASCAR has pitched the new model. But several executives in the sport pegged Coca-Cola - one of the most visible partners in the sport - as a prime candidate to land one of the top-tier spots. Coke in January extended its partnership with NASCAR as the sport's official soft drink through 2023 in a deal that also includes International Speedway Corp. venues, while its longtime deal with fellow major track operator Speedway Motorsports Inc. lasts through 2020.
Other NASCAR sponsors that have been mentioned as potential top-tier candidates include heavy spenders Monster, Sunoco and Mobil 1.
There has been some concern from teams about NASCAR creating a new model that could see it aggressively court new sponsors, at a time when teams are having to work even harder to land that revenue stream, which accounts for about 75 percent of their annual revenue. But NASCAR has said that team assets could be included as it develops its sponsorship model, and a source said that Wolfe recently gave an update on the system at a Team Owner Council meeting.
When NASCAR Chief Operating Officer Steve Phelps first spoke about the deal in April, he indicated it wasn't out of the question that NASCAR could still decide to stick with the current model, a notion reinforced by sources who confirmed that the sanctioning body would be content with the status quo if a company offered it enough money and activation intent to be the sole top-tier partner.
However, that scenario is seen as increasingly unlikely.
--- New York Business Journal ---
The model is still being developed and the proposed structure could change. But it's being envisioned as having five tiers, with a top tier that would have around four to six brands, which would receive exclusivity at the league, track and potentially media-partner levels.
While NASCAR vaguely outlined the model to the public in recent months, sources said the sanctioning body has begun briefing potential sponsors plus key industry executives from teams, tracks, agencies and media partners in recent weeks. It's unclear whether NASCAR divulged pricing during its presentations, but sources said they envision that top-tier slots would go for around $10 million annually.
How the sanctioning body would divide current official sponsors into different categories under a new model is still not finalized, but the plan is to move away from one title sponsor in place of a tiered system like the NCAA's, where the top-tier partners acquire rights to the league's top assets, including possibly race title sponsorships and camera-visible signage, while lower-tier partners would get potentially less visible or valuable assets.
A $10 million asking price for a top-tier slot compares to Corona, California-based Monster Energy paying $20 million annually for its premier series title sponsorship. So the belief is the series will be able to generate more sponsorship revenue from multiple levels of partners rather than having one title partner and subsequent series sponsors.
It's unclear how many companies to which NASCAR has pitched the new model. But several executives in the sport pegged Coca-Cola - one of the most visible partners in the sport - as a prime candidate to land one of the top-tier spots. Coke in January extended its partnership with NASCAR as the sport's official soft drink through 2023 in a deal that also includes International Speedway Corp. venues, while its longtime deal with fellow major track operator Speedway Motorsports Inc. lasts through 2020.
Other NASCAR sponsors that have been mentioned as potential top-tier candidates include heavy spenders Monster, Sunoco and Mobil 1.
There has been some concern from teams about NASCAR creating a new model that could see it aggressively court new sponsors, at a time when teams are having to work even harder to land that revenue stream, which accounts for about 75 percent of their annual revenue. But NASCAR has said that team assets could be included as it develops its sponsorship model, and a source said that Wolfe recently gave an update on the system at a Team Owner Council meeting.
When NASCAR Chief Operating Officer Steve Phelps first spoke about the deal in April, he indicated it wasn't out of the question that NASCAR could still decide to stick with the current model, a notion reinforced by sources who confirmed that the sanctioning body would be content with the status quo if a company offered it enough money and activation intent to be the sole top-tier partner.
However, that scenario is seen as increasingly unlikely.
--- New York Business Journal ---
