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High-profile sponsors Allstate, DeWalt, Jack Daniel's and Jim Beam will exit after this year, choosing to save that money or spend it elsewhere.

Teams struggle to sustain sponsorship dollars

Several will add value to packages without slashing prices

By Sporting News Wire Service
November 17, 2009
02:31 PM EST
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NASCAR's elite teams are desperately trying to hold the line on sponsorship prices despite a glut of valuable 2010 inventory that remains unsold late in the year. To resist the temptation to slash rates, teams are beefing up their offerings with media, track assets and other elements not typically found in a car sponsorship package.

Top teams have found that merely selling space on the car for $20 million or more doesn't cut it for most sponsors in this economic environment. Just look at all the space on highly competitive cars that's available for 2010, cars that feature drivers such as four-time Cup champion Jeff Gordon, 2003 champion Matt Kenseth and Ryan Newman, the 2008 Daytona 500 winner.

What you're not going to see next year is a lot of new money in the sport. But for the companies that have suffered from sticker shock before, now is a good time to look at the opportunities.

STEPHEN MOFFITT

"It's amazing. There's unbelievable inventory available that we haven't seen in 10 years or longer with major teams," said Stephen Moffitt, director of corporate development for MCG Sports, a Charlotte-based motorsports agency that represents top teams Hendrick Motorsports and Joe Gibbs Racing among others.

At the top teams -- Hendrick, Gibbs, Roush Fenway Racing -- full-season sponsorship can run $22 million to $25 million. The going rate per race is anywhere from $500,000 to $750,000.

Lower-rung teams sell sponsorships for $8 million to $10 million for the season, just enough to cover the cost of operating the team. The bigger teams put more resources into the car, which drives up the cost, plus they typically add on a value component to the price because of the team's history of success.

Getting deals done at those higher levels in this economy, though, is next to impossible. It's hard to believe that just 18 months ago companies were lining up to write a check of more than $20 million for the rights to Carl Edwards' No. 99 car, a bidding exhibition that Aflac won for $26 million a year over three years.

Now, sponsors want single-year deals. These days, a six-race package for $3 million qualifies as a "big deal" in Sprint Cup circles. The marquee free agent among sponsors is Ask.com, which spent about $4 million on its team deal with Hall of Fame Racing for the 2009 season and likely won't spend more than that on the next deal, if the search engine decides to stay in the sport.

High-profile sponsors Allstate, DeWalt, Jack Daniel's and Jim Beam will exit after this year, choosing to save that money or spend it elsewhere. In Allstate's case, it not only dropped its association with driver Kasey Kahne, but also chose not to renew its title sponsorship of the Brickyard race. The shift in marketing, the insurance giant said, will put more resources against college football.

While some attrition is normal each year, there's usually a row of sponsors lined up to step in. Not this year.

"I've never seen such late-buying decisions by marketers," said Brian Corcoran, executive vice president of Fenway Sports Group, which sells the inventory at Roush Fenway Racing. "There's inventory out there that no one ever expected to be available." (Continued)

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