Oct 22, 2009 at 07:03 PM
written by rEvolution
The Shape of Things to Come in NASCAR
We just completed a big consulting exercise for a major NASCAR sponsor to help them figure out what they should do next season. It was a pretty interesting exercise and by doing so revealed some facts which may be of pretty broad interest to those involved in the sport.
For the first time some of the top teams in NASCAR are offering signficant incentive schemes to reward wins. Instead of paying $700K-800K per race, primary sponsorship for the Top four teams (RCR, Roush, Hendrick, JGR) and around half that for the rest, you can find some packages at a base rate of 50% of the price with the rest payable on a sliding scale, according to performance. Only if you win do you end up paying full whack, which means that since you don’t win every week, this is a way to cover up a pretty significant drop in price. It shows how much NASCAR has changed from a seller’s to a buyer’s market in the past year or two. There are some real deals to be had now.
We’re not advising any of our clients to be full-year primary sponsors any more. The reason is that we’ve discovered through a lot of research with fans, that as long as you’re the primary sponsor for at least 2/3 of the season, fans will still see you as critical to the driver’s success. And thus, they will be willing to reward you with their business and see you as an authentic member of their “Tribe” of fans.
In early December, I’m speaking at the annual Sports Business Journal Motorsports Forum on the future of racing in ten years. One of the biggest things likely to happen is that NASCAR is likely going to be forced to start a revenue sharing model with its teams as the NFL does, or otherwise it will be left with less than 20 cars on the track due to the difficulty in finding sponsors at current prices.
Darren Marshall is Senior Vice President, Research at rEvolution, a Chicago-based firm specializing in sports marketing services. For more info about rEvolution, as well as frequent insights on the practice of sports marketing, visit their blog at sportsmktgrevolution.com. The opinions expressed herein do not necessarily represent those of the publisher, SponsorPitch, LLC.
photo credit via flickr: rogerbarker2
