NASCAR looking at sponsorship model changes

DAYTONA BEACH, Fla. (TNS) — NASCAR might be looking to change the way it approaches sponsorship deals in the future.

NASCAR announced Tuesday it signed a one-year extension with Monster Energy, but also said it might be leaving the entitlement sponsor game and moving to an entirely new sponsorship model.

Monster Energy will remain the title sponsor of the NASCAR Cup Series through 2019, but after that the sanctioning body might go to a multiple sponsorship package.

“I think what we’re talking about here is not marketing speak,” Steve Phelps, NASCAR’s chief operating officer, said during a meeting with reporters in his Charlotte office Tuesday. “It’s actually a change in the structure of how sponsorship would look within NASCAR.”

The idea is to create sponsorship bundles which would benefit NASCAR, race tracks and TV partners.

“What we’re talking about here is looking at combining assets and creating a new sponsorship model,” Phelps explained to a group of racing media Tuesday.

Phelps said the model would be unique to NASCAR, but pointed to the Olympics when asked it there was a similar model in use today.

“Again, it’s not fully baked, so I don’t want to get into any more granular than what I’ve already done, but it at least gives you a sense for what it is that we’re talking about,” he said

“It’s an exploration at this point. We have not created a formal contractual process with our tracks and our media partners. There have been discussions, to be sure.”

The notion first surfaced about three years ago, according to Phelps, who said it was not his idea.

“We are talking about broadening it so it’s not just one company at the top of the pyramid, as you will, but multiple companies that will allow us to make it easier (for sponsors),” Phelps said. “We think there is greater value frankly for the sponsors by doing this. It will take the next level of collaboration with an industry.”

NASCAR is floating the idea to the public as the starting point of formulating a plan and to see if the new model would be a viable option.

“We want to keep our options open,” Phelps said. “There is some benefit to going all-in on something. If the sponsors come back and say, ‘We’re not sure this is the best avenue for us to partner with this sport,’ then we would have to pivot and go in a different direction.

“Could we go back to an entitlement sponsorship for our top series? Yeah, we could, but I think that’s not our intention, but we certainly want to keep our options open.”

It is unlikely that Monster Energy will renew past 2019, but Phelps said he is sure the company will stay involved with NASCAR to continue a long-term relationship.

One of NASCAR’s largest stakeholders is ISC Motorsports, which owns 12 tracks, including Daytona International Speedway, which host Cup Series races.

Daryl Wolfe is chief marketing officer for ISC and will have a seat at the table once these discussions with NASCAR begin in earnest.

In a telephone interview Tuesday, Wolfe said this proposed sponsorship package model must satisfy three measures.

“What is best for our fans, which by the way, I think we have the best fans in all of sports,” Wolfe said. “No. 2, what is best to grow the sport from a sponsor activation standpoint.

“And No. 3, whatever model we land on has to drive a positive return on those sponsors’ investments in the sport. Whatever we land on has to look through the lenses of those three criteria.”