[dunnere]

Report: NASCAR asking for $1 billion over 10 years for Cup sponsorship

By Nick Bromberg From The Marbles

NASCAR is reportedly asking the next title sponsor of the Sprint Cup Series to pay significantly more than Nextel did when it took over for Winston.

Sprint, which assumed the role of Cup Series title sponsor after the Sprint-Nextel merger, announced in December it was discontinuing its sponsorship of NASCAR's top level after the conclusion of its current contract in 2016. According to the Sports Business Journal, NASCAR is asking the next title sponsor of the Cup Series to commit approximately $1 billion over 10 years in naming rights and activation.

From SBJ:

The sanctioning body has hit the market for Sprint’s replacement with a price tag of $45 million to $50 million annually in rights fees and the same in activation over a decade, according to sources. Sprint confirmed in December that it would end its 13-year sponsorship of NASCAR’s top series after the 2016 season.

NASCAR declined to comment for this story.

The asking price represents a 33 percent increase from the original deal, which was signed in 2004 with Nextel for a reported $750 million over 10 years before Sprint and Nextel merged. Amid struggling TV ratings and attendance for NASCAR at the time, Sprint negotiated that down to approximately $50 million annually when it signed a three-year extension in 2011, according to sources.

Yes, you read that correctly. Not only is the asking price $25 million more than the reported annual figure in 2004, it's double what the SBJ reports Sprint is paying per year in its three-year contract extension.

Of course, we all know how negotiations work, especially in these types of scenarios. What NASCAR is asking for won't likely be the figure that's officially agreed to. It's like buying a house, unless there are extenuating circumstances, you're going to negotiate with the seller and not immediately meet the asking price. And it's fair to say that NASCAR is entering the sponsorship search in a buyer's market.

When Nextel took over, the final race of the 2003 season, per Jayski, drew 7,326,000 viewers on television. Remember, that was the final non-Chase season and Matt Kenseth clinched the title the week before at Rockingham. Last year, the race on ESPN drew 5,223,000 viewers, a slight increase from 2013.

And as with most sports financial figures, the reported increase that NASCAR is seeking is higher than the rate of inflation over the past 11 years. Per this inflation calculator, there's been a 23.7 percent increase in inflation since Nextel took over.
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Well, are we feeling full of ourselves? The sport is falling apart, and they do not see it...it did not look like Atlanta was asell out, and I'm pretty sure Daytona had a lot of empty seats, as well...I'm not so sure they are not pricing and engineering themselves out of popularity...

[spazmatastic]

I'm not so sure they are not pricing and engineering themselves out of popularity...

That's EXACTLY what NASCAR is doing! That's a big part of why Press Pass shut their doors and why ESPN bailed on renewing their coverage on what is now the Xfinity Series AND why it is now the Xfinity Series instead of the Nationwide Series, even though Nationwide is still a major sponsor of the broadcasts. NASCAR is pricing themselves out of business!!!
Why do you think Craftsman completely left sponsorship of anything NASCAR? Craftsman wasn't hurting for money, even though Sears (their principle commercial sales outlet) was hurting. Sears eventually merged with KMart, but Craftsman Tools continued strong sales elsewhere.
TNT lost their coverage (thankfully!), b/c of NASCAR's high cost demand. I hope NBC does a WHOLE LOT better than TNT did at covering the races. I still don't see any of this being a good thing. NASCAR itself and the teams racing are constantly losing significant sponsorship b/c of continually decreasing viewership. (EX. - who is Arris? AKA - sponsor for #19 NSCS car and some NXS team.)
NASCAR needs to stop changing the rules EVERY year. THAT is what is leading to the constant and rapid decline in viewers!!!

TO NASCAR: Bring back single-car qualifying and stop ruining everyones' enjoyment of the sport! Also, stop demanding more money for sponsorship & coverage while giving viewers less reason to tune in!

Business Model #1 !!!!!!!!!

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Okay, I guess it was my time to RANT!

[dunnere]

Amen...I keep trying to get the troops here fired up to come out and give their opinions...I love hearing from everyone, to get insight as to what I'm missing, or a different angle, or in support of where I'm coming from...