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06-18-2003, 11:41 AM
NASCAR talking with Nextel
Nextel, a Virginia-based provider of wireless communication services, is negotiating to become the title sponsor of NASCAR's premier series, now known as Winston Cup.
Several sources confirmed the negotiations to The Observer on Wednesday, but also cautioned that major issues must be worked out before Nextel would take over the sponsorship deal R.J. Reynolds Tobacco has had since 1972.
One source said the deal could be worth $90 million annually, including about $40 million for television advertising and other media buys. Two other sources, however, said those numbers were too high. RJR is estimated to pay $40 million annually, and is strictly limited by law in its advertising.
Jim Hunter, NASCAR vice president for corporate communications, said it would be accurate to say the search for a replacement for RJR has moved to negotiations with companies that have expressed interest. Hunter would not say whether Nextel was one of those companies.
Word of talks with Nextel, though, has reached teams in the sport that might have conflicting sponsorship issues.
"NASCAR has not spoken to us directly about it, but I think they know that we know," said Don Miller, president of Penske Racing South, for which Alltel sponsors Ryan Newman's No. 12 Dodges. "I don't think the deal is 100 percent complete but it's definitely in final negotiations."
NASCAR chairman Bill France Jr. disputed that assessment, telling the Associated Press "it is fundamentally premature to say we are in final negotiations with anyone," and that discussions are still going on with four or five companies.
A Nextel spokeswoman said the company, which is based in Reston, near Washington, is approached every day for sponsorship requests. "As a matter of policy, we don't discuss these types of requests unless the relationship is consummated," said Laura Fleishmann, team assistant for corporate communications.
Ned Leary, president of Sports Marketing Enterprises, the marketing arm of RJR, referred all inquiries about a possible new sponsor to NASCAR. RJR last year signed a five-year extension of its contract to sponsor stock-car racing's top series. In February, RJR officials confirmed that, because of uncertainty in the tobacco industry, they had told NASCAR it should find a new title sponsor for the series if it could.
Negotiations over issues such as conflicting sponsorships are among the potential stumbling blocks for a deal with Nextel, sources said, and extend to each track. Lowe's Motor Speedway in Concord, for example, has sponsorship and sign deals with CT Communications and Alltel.
Megan Englehart, a spokeswoman for Richard Childress Racing, said that team had talked with Cingular Wireless, which sponsors its No. 31 Chevrolets driven by Robby Gordon, about the possibility of a rival telecommunications company becoming the series sponsor.
A source told The Observer sponsors such as Alltel and Cingular likely would be grandfathered into a deal with Nextel, meaning they could remain in the sport but that no new competing deals would be allowed. If such a sponsor currently in the sport left for any reason it would not be allowed back in.
Another issue could be defining the category in which Nextel might be offered exclusivity. Since it offers wireless Internet services, would RCR's sponsorship with America Online be considered a conflict?
"We would be happy to win the Nextel Cup in our Alltel car," Miller joked. "Really, there aren't a lot of problems with the deal as far as the sponsors go. I look at it as if you had a Coors Light car running in the Busch Series."
Nextel, a Virginia-based provider of wireless communication services, is negotiating to become the title sponsor of NASCAR's premier series, now known as Winston Cup.
Several sources confirmed the negotiations to The Observer on Wednesday, but also cautioned that major issues must be worked out before Nextel would take over the sponsorship deal R.J. Reynolds Tobacco has had since 1972.
One source said the deal could be worth $90 million annually, including about $40 million for television advertising and other media buys. Two other sources, however, said those numbers were too high. RJR is estimated to pay $40 million annually, and is strictly limited by law in its advertising.
Jim Hunter, NASCAR vice president for corporate communications, said it would be accurate to say the search for a replacement for RJR has moved to negotiations with companies that have expressed interest. Hunter would not say whether Nextel was one of those companies.
Word of talks with Nextel, though, has reached teams in the sport that might have conflicting sponsorship issues.
"NASCAR has not spoken to us directly about it, but I think they know that we know," said Don Miller, president of Penske Racing South, for which Alltel sponsors Ryan Newman's No. 12 Dodges. "I don't think the deal is 100 percent complete but it's definitely in final negotiations."
NASCAR chairman Bill France Jr. disputed that assessment, telling the Associated Press "it is fundamentally premature to say we are in final negotiations with anyone," and that discussions are still going on with four or five companies.
A Nextel spokeswoman said the company, which is based in Reston, near Washington, is approached every day for sponsorship requests. "As a matter of policy, we don't discuss these types of requests unless the relationship is consummated," said Laura Fleishmann, team assistant for corporate communications.
Ned Leary, president of Sports Marketing Enterprises, the marketing arm of RJR, referred all inquiries about a possible new sponsor to NASCAR. RJR last year signed a five-year extension of its contract to sponsor stock-car racing's top series. In February, RJR officials confirmed that, because of uncertainty in the tobacco industry, they had told NASCAR it should find a new title sponsor for the series if it could.
Negotiations over issues such as conflicting sponsorships are among the potential stumbling blocks for a deal with Nextel, sources said, and extend to each track. Lowe's Motor Speedway in Concord, for example, has sponsorship and sign deals with CT Communications and Alltel.
Megan Englehart, a spokeswoman for Richard Childress Racing, said that team had talked with Cingular Wireless, which sponsors its No. 31 Chevrolets driven by Robby Gordon, about the possibility of a rival telecommunications company becoming the series sponsor.
A source told The Observer sponsors such as Alltel and Cingular likely would be grandfathered into a deal with Nextel, meaning they could remain in the sport but that no new competing deals would be allowed. If such a sponsor currently in the sport left for any reason it would not be allowed back in.
Another issue could be defining the category in which Nextel might be offered exclusivity. Since it offers wireless Internet services, would RCR's sponsorship with America Online be considered a conflict?
"We would be happy to win the Nextel Cup in our Alltel car," Miller joked. "Really, there aren't a lot of problems with the deal as far as the sponsors go. I look at it as if you had a Coors Light car running in the Busch Series."