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Wednesday, June 18
Nextel deal to be announced Thursday
ESPN.com news services
CHARLOTTE, N.C. -- At the end of next season, NASCAR's newest champion will raise the Nextel Cup over his head. Maybe he'll then use a "push-to-talk" phone to make some celebratory calls.
Both scenarios are likely now, ESPN and ESPN.com have learned, that wireless communications giant Nextel has reached a deal to replace R.J. Reynolds Tobacco Co. as the title sponsor of NASCAR's premier series, the Winston Cup.
NASCAR has scheduled what it called a "major news announcement" for Thursday in New York's Times Square, with chairman Bill France Jr. and top drivers Dale Earnhardt Jr. and Jeff Gordon to attend. NASCAR did not disclose the subject of the news conference.
RJR, which wanted out of its contract in February, has been limited in marketing its NASCAR sponsorship by the 1998 master settlement of state lawsuits against the tobacco industry. RJR cannot advertise Winston, its top cigarette brand, on radio or television and is expressly forbidden to market to people under 18.
Those limitations and the uncertain business climate in the tobacco industry led RJR in February to give NASCAR permission to look for another title sponsor, despite a five-year contract extension RJR had signed last year.
So Nextel will now connect to the estimated 75 million fans in more than 100 different countries that follow the sport. It will also be a sponsor capable of advertising and reaching the youthful demographic NASCAR has long pursued.
Marc Ganis, a sports finance expert who heads Chicago's Sportscorp Limited, said the Nextel deal is good for both sides.
"I think it's an excellent fit for Nextel and in many ways should work well for NASCAR," Ganis told The Associated Press. "Look how quickly they were able to go out and replace the sponsor. In this (economic) environment, that's extraordinary. Plus, they substitute a controversial product like cigarettes for a universal, non-controversial product like cell phones."
RJR has been with NASCAR for 31 years, signing in 1972 to take over what was then called the Grand National Series. The company teamed with NASCAR to build the Winston Cup Series into the nation's hottest sports property.
RJR spends anywhere from $30 million to $60 million annually marketing Winston through NASCAR. The amount Nextel will pay NASCAR likely would in part depend on the new name of the series. "NASCAR Nextel Cup," for example, would command a larger fee than "NASCAR Cup presented by Nextel."
The sponsorship deal will easily trump the largest stadium naming rights agreement in sports. Reliant Energy pays approximately $10 million annually for naming rights of Reliant Stadium, the NFL Houston Texans' home field, and the Reliant Astrodome.
One NASCAR source, speaking to AP on the condition of anonymity, said Nextel's presence will prevent other wireless companies from coming into the sport. Companies with sponsors already on the side of a car, such as Alltel and Cingular Wireless, can continue to be involved, the source said.
Alltel sponsors Ryan Newman's No. 12 Dodge for Penske Racing South and Cingular sponsors Robby Gordon's No. 31 Chevrolet for Richard Childress Racing.
Worried there might be conflicts, Childress went to NASCAR officials after hearing of Nextel's impending entrance.
"There didn't seem to be a great concern," he said Tuesday. "There's not going to be a problem with Cingular and the other wireless company that's in there now because I think they would be grandfathered in."
Penske Racing president Don Miller also has said he and Alltel officials do not foresee problems.
It is not clear how the decision would affect AT&T Wireless, which is NASCAR's official telecommunications company. AT&T Wireless is a separate company from AT&T, said AT&T spokesman David Arneke.
It's also not clear what will happen to The Winston, the annual all-star race held each May. The rights to that event have always been included with the title sponsorship agreement.
Nextel is known among cell phone providers for its "push-to-talk" feature, which allows people to use their cell phones like walkie-talkies within a local area.
Ganis said that feature is used heavily in cities and by companies that keep lots of workers out in the field on a daily basis.
In that sense, he said, the Nextel signing fits well with NASCAR's ongoing effort to gain popularity in larger markets for the sport, which has long been associated with the South. Last week, NASCAR said it will shift a key Labor Day race from South Carolina to Fontana, Calif., outside Los Angeles.
The news of change in title sponsorship made waves at Daytona in February, but NASCAR officials, believing finding a replacement would not be difficult, didn't seem overly concerned at the time.
"In a hypothetical world, if the need (to find a new sponsor) ever came, we think it's a pretty good property," NASCAR vice president of corporate communications Jim Hunter said.
Said George Pyne, NASCAR's chief operating officer: "I'd say it's a once-in-a-lifetime opportunity for someone out there."
Ganis said the tie to NASCAR, whose fans are famously loyal to sponsors, may also help Nextel in one of the few remaining growth demographics for wireless companies.
"Golfers all have at least one, maybe two or three cell phones," he said. "The segment of the population that either doesn't have a cell phone or is price- and service-sensitive is one that NASCAR seems to appeal to. It appeals to the average American, and the average American is sensitive to cell phone pricing."
Information from ESPN's Mike Massaro and The Associated Press was used in this report.Send this story to a friend | Most sent stories