Sponsorship In Nascar

Sponsorship in NASCAR

The NASCAR world has not always been filled with the familiar sponsor names like that of Craftsman, Nextel, GM Goodwrench, Kelloggs, Home Depot, DuPont, Budweiser, and M&M’s. Back during the early days of racing before there was any sort of governing body like NASCAR, the sport of racing took more of a what they could get approach to races. In other words, they couldn’t really be picky about who participated in the races. A majority of the drivers either borrowed cars to race with, raced their own cars, or raced the vehicles that were meant to ensure safe shipment of whiskey to its proper destination. The whiskey vehicles tended to be the vehicles that won most of the early races. Not only because the vehicles were stocked with better parts, but the money backing these vehicles allowed for constant fix and repair (Fielden 13,16,23-29).

Raymond Parks could be considered one of the first major sponsors in racing when it comes to providing drivers like Lloyd Seay and Roy Hall with vehicles and the tools necessary to win a race. However, the days of drivers funding their cars would be short lived as soon as Bill France organized an official racing organization now known as the National Association for Stock Car Auto Racing, NASCAR. After the governing body was established you tended to see a vehicle makers logo or model number on the sides of most cars. This was a moderate way of advertising a sponsored vehicle, but this came nothing close to what was to come (Fielden 13,16,23-29,).

The meeting at the streamline hotel was one of the most beneficial meetings ever for NASCAR’s future for sponsors. The result of this meeting gave France’s organization the ability to start formulating rules and achieve more efficient and effective operations. With a formal governing body NASCAR could establish a more organized business plan in order to support the sports future. Automotive company’s like Ford, Chrysler, and Dodge began taking big interest in racing because racers were using their vehicles. It was common for a driver to advertise their vehicles credentials on the sides. The automotive industry continued to assist NASCAR drivers because their vehicles were being observed by the public. However, the real opportunity for the sport to prosper came during the 1971 season. NASCAR had fallen on hard times because big automotive company’s reduced the amount of sponsorship dollars and technical guidance. Ford had completely withdrawn from the racing scene and Chrysler had cut its vehicles to just two. This left the small privately owned race cars stumbling to stay afloat in order to purchase the necessary factory parts at full price (Fielden 16, 154-155).

Everything would change when Congress made it illegal to advertise tobacco products on network television in 1971. So, the tobacco industry was looking for a new method of marketing that worked around these stipulations. R.J. Reynolds came to the rescue and dumped tons of cash into NASCAR virtually saving it from a huge downturn. The top stock car division was called the NASCAR Winston Cup Grand National. Winston put $100,000 into NASCAR’s championship points fund and supplied the advertising for promoters who put on Grand National races over 250 miles. Companies would gradually attempt to invest money is small car sponsorships until the 1990’s when the corporate world threw it into overdrive with sponsorships (Fielden 154-155).

In racing, there is never such as a thing as a flawless driver. Driving at speeds around 160-190 miles per hour does not leave much room for error. When error does occur, it comes at a hefty price considering it takes several thousands of dollars for a new specialized racing machine. In order to keep these race teams up and running, big name sponsors needed to foot the bill. This become more prominent in the 1990’s when corporate America started catching on to the fact that sponsoring vehicles in NASCAR was affective. For a Winston Cup team in 1999, it cost anywhere from three to six million dollars a year. Most all race teams have primary and associate sponsors. The primary sponsor is the one fans associate with the car and the associate sponsors are the smaller advertisements squeezed in on the driver’s car and uniform (Fleischman and Pearce 269).

Many of the successful sponsors can easily validate spending millions of dollars for a sponsor. Take for instance Texaco and Valvoline, this sport is vital for their interest because if customers see a winning car then they will assume the associated oil helped them get that way. During the 1999 season, both Texaco and Valvoline spent five to six million dollars in order to sponsor a single Winston Cup Team. With this extreme amount of money requires success from the driver or else the sponsor will find another top contender. Chuck Kosich, Texaco’s vice president of advertising worldwide says, “The Key is having a car that runs up front, a lot of sponsors don’t get this, and I’m glad they don’t. If they’re only in it for internal reasons, for employee moral or for entertaining reasons, that’s fine. You don’t need to run up front (Fleischman and Pearce 270-271).”

One of the bigger questions yet to be answered is why have corporate sponsors shifted their interests into sponsorships instead of regular advertising. There was a huge push for sponsors during the 1990’s and many company’s jumped on the band wagon for the same reason. The 90’s were an era overwhelmed with advertising messages and sponsorship was a way to distinguish a company’s message to an enthusiastic audience. It separated the company from other company’s which helped isolate their brand name. Plus, it was not as in your face advertising which most Americans don’t respond (Hagstron 47-49).

NASCAR has four sponsorship programs available for companies: Official Status, Series Sponsorship, Special Awards Program, and NASCAR Online. Official status program elevates a sponsor to the highest level. These sponsors can use the NASCAR name and logo to assist in advertising their products. They also have the right to declare their product an official product of NASCAR. Take for example Allstate, they have the right to label themselves as the “Official Insurance Company of NASCAR.” The annual price for an official status is around one and a half to two million dollars annually. Series Sponsorship allows a company to use its name to identify a racing series. For example, Anheuser-Busch pays NASCAR for the opportunity to put its name on the Grand National series, now called “The