Following much speculation, Nextel Communications Inc. signed a 10-year exclusive agreement to become the title sponsor of the National Association for Stock Car Auto Racing’s national series beginning next year. The series, which is currently known as the Winston Cup series, will be renamed The NASCAR Nextel Cup Series when the series’ season begins next January.
The series consists of 36 races at 23 tracks in 19 states, including events in Chicago, Los Angeles, Dallas and Miami. NASCAR noted that it’s the second-most-watched professional sport on television and has more Fortune 500 sponsor participants than any other sport.
“It’s unmistakable that NASCAR and Nextel have a shared passion for performance, innovation, loyalty and excellence,” said Tim Donahue, president and chief executive officer of Nextel. “We can’t wait to begin this new chapter in NASCAR-Nextel history and to connect with everyone involved in the sport. This is truly a monumental day for us.”
Donahue noted that the carrier wanted to integrate its Direct Connect and wireless data services into the sponsorship agreement and that Nextel would continue to be active in sponsoring other sporting events including the National Hockey League, Major League Baseball and the National Football League.
“We’re already hard at work planning a full slate of technical, marketing and promotional plans to establish a relationship with NASCAR’s passionate fan base and dedicated business partners,” Donahue added.
Nextel’s exclusive arrangement will also preclude other wireless carriers and telecommunications providers from entering into sponsorship agreements with racing teams or events, though current sponsorship from Cingular Wireless L.L.C., Alltel Corp. and Samsung would be grandfathered into the deal.
While financial terms of the deal were not released, reports said Nextel would spend approximately $700 million through the life of the contract including $40 million per year in rights fees and $30 million per year promoting the series.
RJ Reynolds’ Winston cigarette brand has been the series sponsor since 1971, but it recently told NASCAR that it was looking to get out of the series due to increasing limitations placed on the tobacco company’s marketing initiatives and other financial obligations.
