- The Washington Times - Friday, June 20, 2003

NASCAR’s days of being defined by good ol’ boys and cigarettes are officially over.

The auto racing giant and Reston-based Nextel Communications Inc. yesterday announced a 10-year deal to rename NASCAR’s championship series from the Winston Cup to NASCAR Nextel Cup Series. In one broad, transforming stroke, NASCAR’s increasing fascination with technology, new media and a truly national and more sophisticated fan base became complete with what is easily one of the largest single sponsorship deals in American pro sports history.

The watershed pact, in the works since early March and publicly known for days, is worth a total of $700million, according to several industry sources. NASCAR itself will receive $40million annually from Nextel for the series naming rights, and another $30million will go to media buys during NASCAR races and associated marketing.

The annual Nextel payouts are roughly a 55percent increase over the sum paid by RJ Reynolds Inc., parent company of Winston. The tobacco company had been increasingly limited in its ability to market its NASCAR affiliation beyond the series naming rights, leading it to seek to exit the deal in February after a relationship lasting more than 31 years.

If the simple alliance of NASCAR with a technology company on its premier sponsorship platform wasn’t enough to mark stock car racing’s rapid evolution, the deal was announced in the heart of New York’s Times Square, hundreds of miles away from the sport’s rural Southern roots.

“NASCAR is taking a giant step for the future of our sport,” said NASCAR chairman Bill France Jr.

The deal also represents supreme validation for a sport that easily outstrips the television audience of any other except the NFL. In recent years, NASCAR had been increasingly embracing both the lifestyle and fan base outside the Southeast, bringing in other technology sponsors such as AT&T; and Cingular. NASCAR executives also have aggressively sought to bring races to urban, non-traditional racing markets such as Los Angeles and Chicago.

The Nextel deal essentially consummates that process.

“The sport had already become rather technical,” said Max Muhleman, a Charlotte sports marketer who has worked with NASCAR for many years. “The cars today are eons ahead of the original Winston Cup cars in terms of technology. But now NASCAR has the glamorous technology halo they’ve wanted for some time.”

The Nextel Cup name will officially begin in January, and Nextel will also have a significant marketing presence at each of the circuit’s major racetracks. The company also intends to install its technology with race crews.

One of the primary goals for the partnership is for each side to use the other in pursuit of a younger consumer base.

“The youth market is one of the most aggressive adapters of new technology,” said Tom Kelly, Nextel chief operating officer. “Sixteen-to-20-year-olds, they don’t remember a time when there was not wireless phones. That’s a change in the fabric of this country. You couldn’t kill it if you tried.”

Nextel also will assume the naming rights for NASCAR’s annual all-star race, formerly known as the Winston. The Busch Series and Craftsman Truck Series will remain as is.

Plenty of questions, however, remain with the NASCAR-Nextel alliance. Will racing fans or general sports fans really accept the series sponsor change from Winston to Nextel after such a long period? Is Nextel large and stable enough to withstand the economic shifts that swallowed one-time technology companies involved in sports like CMGI Inc. and PSINet Inc.?

The latter answer, at least for the moment, appears to be yes. Nextel last year generated $8.7billion in gross revenue and $1.9billion in profit, its first full year in the black. Its stock yesterday closed at $17.34, a two-year high. Competing in a highly competitive wireless phone market, Nextel’s primary selling point is its popular phones with walkie-talkie features.

But just as stadium name changes are often fraught with hurdles, so will this one be, industry executives say.

“It is critical for Nextel to get not only their name and logo out there, but their core message, what they have to offer,” said Dean Bonham, a Denver-based sports marketing executive. “If they do that, and keep all three elements at the front of consumers’ minds, my guess is they will be really ingrained in two to three years.”

Dale Earnhardt Jr., one of NASCAR’s superstars, acknowledged that long-time fans in the traditional North Carolina racing hotbed will have to become less of a focal point to help fuel NASCAR’s ongoing growth. Already, Rockingham, N.C., has lost a race on its annual schedule to allow an additional one for Los Angeles.

“The sport was started in North Carolina, that area, the Southeast,” Earnhardt said. “We’ll have to sacrifice a little bit to see the sport move into new venues and move further up the chain.”

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