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Millsport's senior sports business executives are available for interviews, commentary, and analysis on a number of sports marketing and sponsorship topics. To arrange an interview, please contact Chris Anderson at (214) 259-3290.
Junior stands to profit: Switching sponsors may pay off
Jul 26, 2007
Junior stands to profitThe Associated Press
As Dale Earnhardt Jr. fans wait to see which brand name will be on the hood for NASCAR's most popular driver next year, one thing is certain, sports marketers say: Junior's new deal will be the richest in NASCAR history.
Beyond a potential $25 million payday, the big question is how fans will respond to Earnhardt's break from Budweiser, and how it will affect his marketing prowess.
While switching sponsors disrupts a longtime partnership that fans embraced, it could give Earnhardt an opportunity to expand his already unparalleled reach to new audiences.
No driver commands as large a piece of merchandise sales, and few are as closely linked to a sponsor as Earnhardt is to Bud, his primary sponsor since he was a rookie in 1999. That makes his switch uncharted territory, say marketing executives who work with racing teams, sponsors and others in the motorsports industry.
"There's never been a driver as big as Dale Earnhardt Jr. currently is," said Mike Bartelli, a Charlotte-based senior vice president of Millsport Motorsports, "because NASCAR has never been bigger than it is."
While top drivers have changed sponsors before, most moves happened in the 1980s and '90s, before NASCAR's popularity mushroomed, said Mike Boykin, vice president of GMR Marketing.
Earnhardt announced in June that he would leave Dale Earnhardt Inc., the team started by his father, next season to join Hendrick Motorsports. This month, Hendrick announced that Budweiser won't be Earnhardt's sponsor in 2008 because the team already has other sponsors.
Hendrick and Earnhardt have been silent since then, and there has been no indication of when a new sponsor will be announced. Even so, who will replace Bud remains a hot topic in NASCAR circles.
The driver Earnhardt is replacing, Kyle Busch, drives the Kellogg's and Carquest Auto Parts cars. Speculation has centered on a Pepsi product or a combination of products as Junior's next sponsor.
Pepsi already has a contract with Hendrick and has sponsored Jeff Gordon for 10 years, said Michelle Naughton, a spokeswoman for Pepsi-Cola North America, and Pepsi officials won't comment.
More than the type of car or the racing team, the primary sponsor -- along with the number -- is how fans identify a NASCAR driver, marketers say.
By comparison, if Michael Jordan had switched from Nike to Reebok in his prime, the only difference on the court would have been his shoes. His jersey still would have read "Bulls."
Sponsorship deals range from $12 million to $20 million for top drivers, marketers say. For Earnhardt, that figure could reach $25 million to $30 million.
Still, breaking from Budweiser will cost Earnhardt exposure, at least at first, Bartelli said.
But Earnhardt's switch also will provide opportunities. He likely won't alienate fans by aligning with another beer company.
"He's not going to a competitor," said Jim Doyle, president of Retail Sports Marketing in Charlotte. "It's not like Earnhardt is leaving the Yankees and going to the Red Sox."
If he ends up with a well-known consumer products company, Bartelli said, it could expand his reach beyond what was possible with Bud, which "really constrained what he could do with kids."
