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| NASCAR Chairman Bill France (left) with Nextel President and CEO Tim Donahue following Thursday's announcement. Credit: NASCAR/ISC Publications |
NEW YORK -- For the first time in over 30 years, NASCAR was in unfamiliar territory; searching for a new title sponsor.
R.J. Reynolds last year signed a five-year contract extending its title sponsorship of what will, for the 32nd and final time this season, be called the Winston Cup Series.
But in a business environment in which a sluggish economy compounded with regulatory limitations and litigation against the tobacco industry, RJR earlier this year told NASCAR it was free to look for a new title sponsor for its top series.
Just more than four months later, that new sponsor was announced on Thursday.
Say goodbye to the NASCAR Winston Cup Series. And say hello to the NASCAR Nextel Cup Series.
The world of stock-car racing changed quickly and dramatically Thursday morning with the announcement that Nextel Communications Inc. of Reston, Va. will back NASCAR's top series for 10 years, starting in 2004.
Nextel replaces R.J. Reynolds, whose Winston brand has become synonymous with NASCAR since it joined the sanctioning body in 1971. But in early February, RJR told NASCAR it wanted out of a five-year contract extension it signed last year. NASCAR started looking around, and four months later has a deal some estimate as high as $90 million a season.
The deal was announced amid smoke and laser lights in the NASDAQ building in Times Square. And it took less than an hour for NASCAR to proclaim that 33 years of Winston sponsorship was over, and that a new era of the sport had begun.
"Today, NASCAR takes another giant step for the future of the sport," said chairman Bill France Jr., son of NASCAR founder Bill France Sr.
Officials from NASCAR and Nextel sung each other's praises Friday, saying the deal will be good for both sides.
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| Thursday's announcement took place at the NASDAQ building in Times Square. Credit: NASCAR/ISC Publications |
"I think our companies, Nextel and NASCAR, share certain similarities," Nextel president and CEO Tim Donahue said. "Both of our organizations began as up-starts. And, to be candid, not a lot of people took us seriously. But look at us now: America's No. 1 spectator sport and America's most successful wireless company joining forces.
"It's no surprise why we at Nextel would be so interested in becoming part of the NASCAR team. Simply put, it is the most popular and exciting sport in America, and it has the most dedicated fans."
Nextel and NASCAR envision expanding its already broad fan base, and there was a lot of discussion about the youth market Friday. RJR, because of advertising restrictions, couldn't go after anyone under age 18, but Nextel has no such restrictions.
"Unfortunately, R.J. Reynolds has been limited in a lot of areas, and they've done a fantastic job, but I see there are very few limitations as to where Nextel can take it," four-time Winston Cup champion Jeff Gordon said. "Who knows where they can take it now going forward in the future?"
Some of the first marketing steps, which can't begin until January, appear to be headed toward teen-agers. NASCAR senior vice president Brian France said "the youth market is going to be a market that we're going to go after more aggressively."
"The youth market is one of the most aggressive adapters of new technology," Nextel executive vice president and COO Tom Kelly said. "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 that shows that wireless is becoming a pervasive technology. You couldn't kill it if you tried."
Nextel will also try to reach out to existing fans and try to deepen their experience using wireless communication. There were no details, but Kelly used the example of fans being able to use cell phones to check qualifying.
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| Jeff Gordon was on hand to welcome Nextel to the NASCAR family. Credit: NASCAR/ISC Publications |
The details of Nextel's deal began to emerge last week. The negotiating began in late March when NASCAR put in a call to Nextel. The initial meeting took place at Nextel's headquarters, but it didn't take long to get things going.
"From the first day that the two companies got together and started the discussions, we knew that there was a chemistry between us that would make this work," Donahue said.
NASCAR chief operating officer George Pyne said the sanctioning body talked to "four or five companies," but when offered the chance to partner with a technology company, NASCAR jumped.
"There was a great deal of speed, a great deal of teamwork," Pyne said. "They were terrific people to work with. I think start to finish, we probably were 60 to 75 days. It was a terrific process for us."
For Nextel, it was an easy choice, said senior vice president of marketing Mark Schweitzer.
"For Nextel, I would add opportunities like this come along once every 32 years and are not to be a protracted process," Schweitzer said. "We're a very competitive company in a competitive industry. We determined early on that this is something to go after, and enjoyed the process with NASCAR.
"But the opportunity is so easy to comprehend here, that going after it made perfect sense for Nextel."
Terms of the deal weren't disclosed, and neither party was very willing to discuss many specifics. But there were some details that emerged Friday:
* While Nextel will have wireless exclusivity, sponsors like Alltel and Cingular will be grandfathered into the contract and are welcome to remain, Donahue said.
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| Nextel President and CEO Tim Donahue presents Dale Earnhardt Jr. with a No. 8 Nextel phone during Thursday's announcement. Credit: NASCAR/ISC Publications |
* The all-star race will be sponsored by Nextel and will be called the NASCAR All-Star by Nextel, NASCAR president Mike Helton said.
* Nextel signed "over 30 agreements" with individual tracks, Schweitzer said, making "investments at every level."
* While the deal is for 10 years, Donahue hoped it could become a "lifetime arrangement.
* Donahue said Nextel would work with NASCAR on future schedules but deferred to the sanctioning body because that is "expertise inside of NASCAR and not, frankly, our expertise."
The announcement began with the prophetic phrase "A New Era Has Begun," while "Baba O'Riley" by The Who blared on the speakers. And NASCAR didn't take long to honor its current sponsor, Winston, playing a short video in tribute to RJR.
France and Donahue then made formal remarks before Donahue brought Gordon and Dale Earnhardt Jr. to the stage to present them with cell phones to match their car numbers and colors.
The two drivers are clearly a big part of NASCAR's future, and Junior even joked that he's been a Nextel customer for two years.
Now, though, the thoughts turn to the future.
"My father would definitely be proud," France said. "We've come a long way toward fulfilling his vision, and we've come a long way toward making NASCAR racing a national sport with fans spread across America.
"We still have miles to go to achieve our goals, but we are confident we are well on our way, with Nextel as our new partner."
