FOX Sports Raises Cost Of NASCAR Title Sponsorship

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Carsdirect.com will not be returning as the title sponsor at Las Vegas Motor Speedway in 2001. Apparently, when representatives from the Carsdirect.com heard FOX TV’s proposal for the entitlement package of the event, it was a little rich for their blood.

According to sources close to the situation, the network was looking for an additional $900,000 to have the sponsor’s name mentioned and used in video graphics throughout the race. In addition, FOX is demanding the sponsors purchase 20 30-second spots -- eight to be shown throughout the race and the balance to be distributed throughout the season.

There is little doubt that powerhouse sponsors such as Coca-Cola or Budweiser already have five or six commercials completed or can produce more, but for sponsors without mega-budget resources, the price for producing a 30-second spot starts at $100,000 and goes up from there.

With the new NASCAR television package costing NBC and the FOX Network more than $2.4 billion over six years, the money had to come from somewhere. Apparently, the sponsors will be the first to feel the pain.

Marcus Smith, manager of new business development for Speedway Motorsports Inc., expects that sponsors with deeper pockets and greater agendas will come forward. Speedway Motorsports Inc. (often referred to as SMI), owns and operates six tracks including Las Vegas.

"It’s not going to be anymore difficult because all of the sudden the races have gone from cable coverage to network coverage and the ratings are going to go up significantly," Smith said. "This will give the event sponsors a huge platform for a national scope and a broader audience.

"When they have a commercial now, the sponsorship will have pre-promotion on the NBC shows like The Today Show or Jay Leno, and if you’re on the FOX side of the schedule you might get mentioned on The Simpson’s or another FOX Sports show. I think it really gives an event sponsor a better platform for a national sponsorship."

Smith doesn’t expect the transitions to take place overnight, but in time, the opportunities will be greater for both the tracks and the sponsors.

"There will be some struggles of adjustment in the beginning because it is changing, but I think it is a change for the better," Smith said. "If we can get our sponsors to look at it with an open mind and see that this new media package is a better platform for them, then we’ll be on the right side.

"Now some of the more regional and local sponsors certainly don’t need national coverage and it may take a couple of years to adjust, but by then we’ll be OK. They’ll be challenges, but there are other options. For the most part, the networks haven’t approached the sponsors yet with the packages because they’re just finding out what the entitlement packages are going to be. So we haven’t seen a whole lot of reaction yet. Speedway Motorsports has communicated with all of our sponsors to try to tell them what we know."

SMI did have a similar packages established with DirecTV for the Texas Motor Speedway race broadcast on CBS television. The contract did not include sponsorship entitlement, graphics or sponsor mentions during the race or the four to six 30-second spots and pre-race mentions integrated through programming a month out before the event. It was the responsibility of DirecTV to make the arrangements with the network.

The Las Vegas Motor Speedway had a different a contract with ABC that included sponsorship recognition, plus graphics and mentions, but no spots. Smith said the
sponsorship costs are all relative.

"It’s up to us as facility owners to negotiate the packages -- or at least it was," Smith added. "We negotiated our own television contracts and if the sponsor wanted to have graphics and entitlement packages, then the fees would be lower. If we didn’t want it than we had a higher fee and they would just sell it to the sponsor. It just depends where you want the money to show up, it’s going to even out either way.

"We have a bigger, better TV package and it ought to cost more, it’s worth more. So are people going to pay for it? The market will drive the price."

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