- The Washington Times - Tuesday, June 17, 2003

Nextel Corp., a Reston wireless communication company, will become the new title sponsor of NASCAR’s championship series, sports industry sources said yesterday. The deal likely will have immediate and significant ripple effects throughout auto racing’s massive corporate sponsorship portfolio.

Nextel’s deal, to be announced tomorrow in New York, will replace R.J. Reynolds’ Winston cigarettes brand, which has been NASCAR’s lead sponsor since 1972. RJR executives signed a five-year extension to its sponsorship deal last year, but in February asked to exit the pact due to growing marketing limitations and fiscal uncertainty within the tobacco industry.

Officials with both Nextel and NASCAR yesterday declined to confirm the long-rumored pact. But NASCAR spokesman Herb Branham said tomorrow’s announcement “will greatly benefit the sport, without a doubt. This is one of the most exciting things we’ve done in some time.”

It is not certain what the new series name will be, but Nextel Cup or some variation of that is likely when the renaming begins next year. Terms of the Nextel deal have not been disclosed, but industry sources said the company will pay slightly more than the $30 million to $60 million Winston was estimated to have paid annually. McDonald’s, Coca-Cola and Visa were also candidates to acquire the sponsorship.

Nextel’s involvement promises to both elevate and complicate NASCAR’s profile. Free of many of the constraints surrounding Winston, Nextel will be able to market auto racing more heavily, particularly through TV advertising, and help bring the sport to newer and wealthier fans.

NASCAR is by far the major American sports entity most heavily subsidized by corporate sponsorship, and Nextel must break through a gaggle of high-profile sponsors that includes rivals AT&T;, Alltel and Cingular. No other wireless companies will be allowed to become NASCAR sponsors because of the Nextel pact.

“With NASCAR fans being so famously brand-loyal, this gives Nextel a fantastic opportunity to tell their story to a massive audience,” said David Carter, a Los Angeles sports marketing consultant and university lecturer. “But those fans, as loyal as they are, are still quite discriminating. So it’s absolutely critical Nextel back this up with leading-edge products and service.”

Winston’s full-time involvement with NASCAR started in 1972 and began what is now known as auto racing’s modern area. In recent years, the Winston sponsorship has been one of the largest, most revered and influential in all of sports.

“This definitely is historically significant news,” said Jim Freeman, executive director of the International Motorsports Hall of Fame in Talledega, Ala. “This is the only [title] sponsor the series has ever had, and Winston made the absolute most of it, both for themselves and NASCAR. It’s been a highly productive partnership and helped transform the sport. It’ll be interesting to see if Nextel steps up with that same level of involvement.”

Nextel’s entry into NASCAR highlights a steady march by the company throughout major sports sponsorship. A sponsor of the NHL since 2000, Nextel renewed with the hockey league earlier this month in a three-year, $9million deal. The company also sponsors more than a dozen NHL and Major League Baseball teams, buys ad time during ESPN’s baseball coverage, and is a sponsor at the American Airlines Center in Dallas.

“This company clearly has been a very active marketer,” said William Power, analyst with Robert W. Baird & Co. Inc. in Milwaukee. “It’s too soon to tell, though, how much impact this [NASCAR deal] will have directly on Nextel.”

Wall Street also is enthused with the company, pushing its stock yesterday to $16.60 a share, 5 cents below a two-year high. The company has grown in market value by more than 140 percent in the last year, in part through the widespread popularity of Nextel’s wireless phones with walkie-talkie features.

The change from Winston to Nextel also highlights a growing shift within NASCAR and how it markets itself. NASCAR for several years has been actively pursuing sponsors outside its traditional categories of packaged goods, petroleum and auto parts, and cigarettes.

The sport also has been seeking new tracks in major media markets to help boost fan interest, and last week moved a Labor Day weekend race from Darlington, N.C., to near Los Angeles.

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