New York From Tobacco Road to Times Square, NASCAR has become so popular that a telecommunications giant is plunking down $700 million to sponsor stock car racing's premier series.
Nextel will replace Winston in January as the name on the series that regularly draws six-figure crowds and high television ratings.
Nextel will pay $40 million a year in rights fees and will spend another $30 million a year promoting the series, an industry source close to the negotiations told the Associated Press Thursday on condition of anonymity.
R.J. Reynolds Tobacco, through its Winston brand, spent about $45 million a year and has sponsored the series for 32 years.
Nextel "will be able to promote our drivers, teams and tracks in every area," NASCAR chairman Bill France Jr. said during a news conference in Times Square, with Jeff Gordon's No. 24 car sitting outside. "This definitely will benefit every member of the NASCAR community."
RJR, citing marketing restrictions and an uncertain business climate in the tobacco industry, said in February it wanted out of the contract. A half-dozen companies made bids, but NASCAR vice president George Pyne said Nextel offered what the racing organization was seeking.
"Nextel has the highest profit margin in their category and they are recognized as No. 1 in America in the telecommunications industry," Pyne said. "This is a strategic decision to go into the telecommunications area."
Indeed, RJR cannot advertise Win-
continued from page 1c
ston, its top cigarette brand, on radio or television and is forbidden to market to people under 18. Nextel already is well-entrenched in that area.
"They market to children and families, a market that is untapped," Pyne said. "This is a category for us where the opportunities are limitless."
The NASCAR Nextel Cup also should bring the wireless communications leader "significantly more" than the $160 million worth of media exposures Winston got in 2002 during broadcasts on Fox, NBC and TNT, according to Joyce Julius and Associates, which does independent sponsorship evaluation.
Nextel has the largest all-digital wireless network in the country. It also has some marketing involvement with the NFL, NHL and major league baseball. It will not be involved with the Busch Series or the Craftsman Truck Series, which are keeping their sponsors.
Beginning in 2004, Nextel will apply its technology to communication between drivers and their teams, and to enhancing the fan's experience at the tracks and while watching at home.
"This is the most significant sports sponsorship we've had," Nextel president Tim Donahue said.
The deal also gives Nextel series exclusivity in telecommunications, although Alltel and Cingular Wireless, which already are involved in Winston Cup, will be allowed to remain -- something Donahue encourages.
"At a time when the Home Depot car races at Lowe's Motor Speedway and the Miller Lite car participates in the Budweiser Shootout, there is certainly room for Cingular Wireless ... to compete for the NASCAR Nextel Cup Series," Cingular spokesman Daryl Evans said.
Gordon and Dale Earnhardt Jr., attended the news conference, where Earnhardt emphasized Nextel's addition was a sign of how far NASCAR has come from its down-home routes in his homestate of North Carolina. He and Gordon were presented cell phones with their car number and paint scheme on it.
Earnhardt said any sensitivity among longtime NASCAR fans about the sponsor change was misplaced.
"I can't see anybody not getting excited about such a large step forward for the sport," he said. "It's a grand move."