NASCAR got a bit of good news on Tuesday, as the entitlement sponsor of its premier series, Monster Energy, announced it would be returning in the same role in 2019.
“NASCAR and Monster Energy enjoyed a productive first year, and both parties have benefited significantly from the partnership,” said Steve Phelps, NASCAR’s chief operating officer. “Monster Energy successfully utilized our sport as a platform to elevate its brand and drive business, while introducing NASCAR to new audiences.”
Monster had asked NASCAR last month for an extension on making the decision.
“Over the past year, NASCAR’s passionate and brand loyal fan base embraced Monster Energy and we are excited to be able to continue to build on and strengthen that momentum through 2019,” said Rodney Sacks, Monster beverage chairman and CEO. “Racing is in our DNA and extending this partnership further establishes Monster Energy’s prominence in motorsports.”
Great story for NASCAR and great sound bite from all the relevant parties, but here comes the “but.”
The deal is a one-year extension. Beyond that NASCAR is going to be in a situation where they have to find someone else or try to convince Monster that NASCAR is still a valuable property to promote their brand.
But here is the “but to the but.”
Phelps made allusions to a fundamental change to the entitlement sponsor scheme that would see the singular title sponsor go away and possibly be replaced with a variety of companies.
“This is something we’ve been exploring for a while,” Phelps said, noting that the idea was first broached roughly three years ago. “It’s more to do with this notion that we want to make it easier for sponsors to say ‘yes.’ The entitlement position, the things that we’re talking about, we’re already requiring of our entitlement partners right now, but we’re talking about broadening it, so it’s not just one company at the top of the pyramid, but it’s multiple categories, multiple companies that will allow us to make it easier.
“We think there’s greater value, frankly, for the sponsors by doing this, but it will take the next level of collaboration within the industry,” he added.
Phelps went on to say that the new sponsorship model could be all-inclusive to include not just the sanctioning body, but also teams, tracks and TV partners.
Allow me to translate: NASCAR is not going to get one company to pony up enough bucks to put their name on the whole dang thing, so they are going to have to get multiple companies to do it to jump-start the dollars rolling in. In fact, this is no different than what the teams have been doing with multiple sponsorships to complete the 38-event season.
I applaud NASCAR if this is, in fact, the route they take after 2019. Rumblings were the Monster Energy sponsorship was pennies on the dollar compared to what Sprint was paying. I have been writing for several years that the economic model of NASCAR is broken for everyone. This “umbrella” sponsorship arrangement could put money into the hands of all the players – most importantly teams.
This has the potential to be a revolutionary departure from the way NASCAR has done business since 1973 when Winston came on board as the title sponsor and remained in that position for 30 years. Again, kudos to them for seeing the need to make a change and for trying something to regain their position in the minds of the American sporting public. Spread some of the ask around.
I just hope it works.
Andy Cagle can be reached at firstname.lastname@example.org.