As Hendrick Motorsports seeks a sponsor for Jimmie Johnson next year, NASCAR says it is ready to help.
That is, if the team wants it.
As NASCAR teams try to navigate what can be tough sponsorship-seeking waters, the sanctioning body says it works with teams by request when they seek help retaining or landing sponsors. It can tailor research specific to the team or sponsor needs (it did more than 90 research requests on behalf of teams last year), deliver data about the sport as a whole, help in creative presentations to pitch sponsors and will provide someone to be on a conference call or in-person sales call.
For the past 12 years, NASCAR has had people designated to help teams on the marketing side and has added staff to offer help to drivers as well.
“Not all teams want to use these resources, and that’s fine — some of the more sophisticated teams may not use those things,” Steve Phelps, NASCAR’s executive vice president and chief global sales and marketing officer, told ESPN.com. “Most of them want the analytics and insight stuff because the research is so compelling.
“Hendrick Motorsports probably won’t rely on NASCAR to build a pitch for them for the 48 [Johnson’s car] moving forward. They will get to us on, ‘Hey, help us sell the sport broadly and what’s going on in the sport and the vision on where the sport is going.’ Each sponsor, each team is different, but we make the resources available.”
When Lowe’s announced last week it would leave Hendrick and the seven-time Cup champion after this season, it put the spotlight back on NASCAR, its health and its role in helping the teams.
Who’d have predicted Jimmie Johnson would go from off-road racer to NASCAR superstar? Jeff Gordon, for one. Luckily, ESPN’s Ryan McGee was smart enough to listen.
The longtime sponsor has decided to leave seven-time Cup champion Jimmie Johnson — and NASCAR altogether — after this season. What are the ramifications? Our experts weigh in.
With BK Racing losing $8 million or more for three years straight, court filings show the challenges of operating a race team when sponsorship fails to materialize.
It’s not a simple topic nor a simple solution. Attendance and television ratings tell a story of a sport on the decline. NASCAR says its research shows it provides value to sponsors and that more sponsors are involved now than in the past.
“In my opinion, [Lowe’s leaving] has nothing to do with the sport,” Phelps said. “It has everything to do with the business model that they’re in.
“And that’s OK. … The number of sponsors that are involved in our sport is at an all-time high. How they activate and what they’re doing in the sport continues to change.”
Lowe’s isn’t the only major retailer to leave NASCAR in recent years. Target, Dollar General and Best Buy are also among them.
“Obviously, retail is under a lot of pressure and we have seen some defections,” Phelps said. “The defections, to me, including Lowe’s frankly — this isn’t a NASCAR issue. It is a retail issue.
“We wish Lowe’s nothing but the best [after] the two decades in sponsorship they’ve had in this sport and the seven championships they enjoyed with Jimmie. But you could see kind of cracks in that system because they were not buying on television, they were not doing in-store promotions, they weren’t doing NASCAR-themed creative. … The business model is a challenge for them. We wish them well.”
Among the other companies that have dropped team sponsorships the past few years: Farmers Insurance, Great Clips, GoDaddy, Ortho, Aaron’s, Subway, KFC and Aspen Dental. MillerCoors significantly decreased its investment this year.
Among those increasing their investments in recent years have been Busch, First Data, CreditOne and Love’s Travel Stops.
NASCAR says more than 25 percent of Fortune 500 companies (including nearly half of the Fortune 100) make an investment in some way in NASCAR.
“There isn’t a specific category that is going to replace [retail], that it’s going to be pharmaceuticals or it’s going to be technology or it’s going to be data or it’s going to be online retail,” Phelps said. “The answer is, ‘Yes, it’s going to be all those things.’
“There isn’t going to be one-for-one [as far as business types]. We’re going to continue to make announcements over the coming weeks that just continue to showcase the strength of the sport, why brands want to be involved.”
Andrew Campagnone, who helped broker the Farmers Insurance and AARP sponsorships to Hendrick over the past several years, said it is likely no company would be willing to come in at a $20-25 million level (annually) and Johnson’s deal likely will be split among multiple sponsors, including some currently in the Hendrick stable.
The last Farmers deal he did with Hendrick for 2015-2017 was at $8 million for 12 races. There are 36 races in a season. The National Guard was spending $32 million for sponsorship of 20 races and activation for Dale Earnhardt Jr. in 2014.
As for track sponsorships, Texas Motor Speedway president Eddie Gossage said his track has had a good run the past few months. He said it is difficult for teams to find sponsorship as they try to match what other teams have in sponsorship and try to make sure they’re not outspent in areas that could find speed.
“Sponsors spend so much money sponsoring the car that they can’t spend money in the market [as they used to] with point-of-sale merchandise,” Gossage said. “It’s just changed because the nature of the business has changed. … It’s tough.
“It’s not that the sport is struggling to find sponsors. It’s just the cost to play poker is so high, there’s not many people that qualify to play poker at that level.”
If NASCAR and its teams want to attract more sponsorships, it is critical that it works to change the narrative, Campagnone said.
“The biggest challenge is the perception that the sport is dwindling and the car culture is disappearing and the pay to play is an enormous amount of money,” Campagnone said. “Until we get a different narrative going out in the marketplace, … that’s going to be a very difficult challenge.”
The public companies that own tracks reported admissions were down 2.7 percent in 2017, the 10th consecutive year of falling admissions revenue, albeit a much smaller decline than 7.4 percent in 2016. According to International Speedway Corp. annual reports, NASCAR Cup races on television averaged 4.1 million viewers per minute in 2017, down 10.9 percent from 4.6 million viewers in 2016.
On the flip side, according to ISC, NASCAR Digital Platforms (NASCAR.com and its apps) had 1.7 million average unique visitors per race day, a 7 percent growth. NASCAR’s social metrics generated an average of approximately 23 million race-day impressions, which it said was also an increase.
NASCAR points to recent research that shows its value to sponsors, that it is the top sport in the United States in fan loyalty to sponsors and fans socially promoting sponsors. A 2015 survey of millennial fans showed that 73 percent talk positively about NASCAR sponsors and 55 percent switch brands because of sponsorship in NASCAR.
Campagnone said it will be key for NASCAR and sponsors (and the sports industry in general) to find a better way to put a value on social media and companies learning how to monetize it.
NASCAR said its research shows consumption is growing and its fans are more in tune with the role of sponsors, continuing to outpace other sports as far as supporting brands involved in the sport. Phelps said its fans — including many who might not be in the Monster Energy demographic — have bought the product in significant numbers because it sponsors the series.
He added that the new NASCAR fans are younger, Hispanic and female — all key demos to sponsors.
In addition to data, NASCAR presents workshops to help educate teams and marketers on best practices. It also provides extra credentials and things such as pace-car rides and driver meeting access to current and potential sponsor executives visiting the tracks. As well, it incorporates teams in NASCAR promotions and on NASCAR platforms.
Sometimes it will come down to the driver and personal relationships. Johnson said he will be part of the sales team when it comes to trying to land a sponsor.
“I’ve met a lot of folks along the way and have great connections myself,” Johnson said. “And as Hendrick Motorsports ramps up on their side, I know that they would like me involved and I know that I want to be involved. … Maybe a relationship or two that I have made over the years will come to fruition and maybe help with sponsorship.”
Lowe’s, in its statement, said it was investing in other strategic initiatives. It had been in the sport for more than 20 years and with Johnson since he started in 2001.
“It’s a team responsibility,” Gossage said. “I’m sure if they were really struggling, NASCAR would try to do what they could to help out. Hendrick Motorsports and Jimmie Johnson will have no trouble getting a sponsor.
“You’re talking about an unprecedented opportunity of a seven-time champion who is a free agent to a sponsor. … [If new sponsors are] added to the sport, it’s a net gain. But if it’s a sponsor from another team, which happens often, then that’s a net loss.”