Wireless company has 10-year agreement to take over Winston Cup series.
By MIKE STEPHENSON
Published June 20, 2003
In 1971, smoking was cool, stadiums and sporting events were named for people or places and push-button phones were a novelty.
Now, smokers are treated like lepers, arena and event names change with corporate earnings and the world is going wireless.
And so is NASCAR.
The stock car sanctioning body announced Thursday that Nextel Communications will replace R.J. Reynolds' Winston brand as sponsor of its top series.
Goodbye, Winston Cup; hello, Nextel Cup.
The deal, announced in New York, begins next season. It covers 10 years and was reported by the Associated Press and the Charlotte Observer to be in the range of $70-million to $75-million a year. Money will go to NASCAR, the tracks that stage races, the drivers' championship fund and television advertising.
"We've come a long way toward making NASCAR racing a national sport with fans spread across America," NASCAR chairman Bill France said. "We still have miles to go to achieve our goals, but we are confident we are well on our way, with Nextel as our new partner."
Nextel, which touts the walkie-talkie feature on its cellular phones, turned the first profit in its 15-year history in 2002, but chief executive Tim Donahue is confident the NASCAR sponsorship will vault the company to new heights.
"It's like we're joining one of the largest, most passionate families in America, one we've admired for some time," he said. "Simply put, it is the most popular and exciting sport in America, and it has the most dedicated fans.
"I think our companies, Nextel and NASCAR, share certain similarities. Both of our organizations began as upstarts. And, to be candid, not a lot of people took us seriously."
Nextel plans to use its technology in enhancing communication between teams and drivers and developing ways for fans to use technology to follow the sport. It will sponsor the annual all-star race formerly known as The Winston and bar other telecommunications companies that don't have existing sponsorship agreements from entering the sport.
It will be able to promote NASCAR through advertising and to young people in ways that RJR was prohibited from because of tobacco regulations.
"Nextel will be able to promote our drivers, our teams and tracks in all forms of media and to all NASCAR fans," France said. "These efforts will help propel NASCAR to new audiences and new markets."
France started milking the corporate sponsorship cash cow well before other sports.
In 1971, France and RJR hatched a deal where Winston would become sponsor of the top stock car series, then called Grand National. Since the deal took effect in 1972, RJR has pumped hundreds of millions of dollars into NASCAR, increasing the purse from $100,000 to $17-million to be divided among the top drivers in the points standings. In recent seasons, it promoted a bonus program at select races where fans and drivers could win $1-million prizes. In all, Winston's sponsorship was estimated to be about $40-million annually in recent years.
In February, RJR announced that it would drop its sponsorship if NASCAR could find a replacement. It expects to pay $2.2-billion in tobacco lawsuit settlements this year and cited the uncertain economy in making its decision.
"We appreciate what RJR has done," driver Dale Earnhardt Jr. said. "It's been a huge, huge catalyst for where we are now, but a lot of things change and you have to be mindful and willing to accept that."
Despite tough economic times, many companies were eager to bid because of NASCAR's popularity and its intense fan loyalty to sponsoring products.
"I think it says volumes about NASCAR as a sport ... when you look that we're probably in the most challenging economy in the last 10 years, still in the middle of a war," said George Pyne, NASCAR's chief operating officer, who estimated the deal came together in 60-75 days. "The fact that we have major corporations in America that saw the value of the NASCAR franchise was very flattering and speaks volumes about where the sport is today."
