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Nextel Steps In as R.J. Reynolds Drops NASCAR Sponsorship

By Jun 19, 2003

Nextel Communications and NASCAR are expected to announce today that the wireless company will be taking over as title sponsor of NASCAR’s highest profile racing series.

In a reported 10-year deal, Nextel will replace R.J. Reynolds after 30 years as the title sponsor of The Winston Cup.

In February, RJR announced it would drop its sponsorship. The tobacco giant has had its hands tied in recent years when it comes to marketing despite spending up to an estimated $60 million per year through the Winston Cup. In April, a California appeals court ruled that RJR violated the terms of the 1998 Master Settlement Agreement with plans for a year-long nationwide billboard campaign with the Winston Cup series.

Nextel’s NASCAR sponsorships could raise questions for the racing organization’s relationships with other wireless companies. AT&T is NASCAR’s official telecom company and Alltel and Cingular Wireless already have existing sponsorships of individual cars.

“NASCAR has been taking the sport mainstream and while they didn’t initiate it, moving away from a tobacco company isn’t a bad idea,” Kelly O’Keefe, CEO of Emergence Brand Labs, Richmond, VA, said yesterday. “And while we usually don’t recommend big broad strokes like this, it’s a good move for Nextel, which has always been a niche player in the direct-connect market and is now facing serious competition from companies like AT&T and Verizon. Much of Nextel’s audience is the NASCAR audience and spending, say, $20 or $30 million for title sponsorship is a lot more effective than dropping $8 to $10 million for your name on the side of a car.”

In other NASCAR news, NASCAR is tailgating with big name league partners and sponsors at Wal-Mart stores in 10 race markets through October.

Brands include Coca-Cola, Masterfoods, Kingsford, Kellogg, Goodyear, Kodak, Nestlé, Energizer, Richard Petty Driving Experiences, Stacker 2 and XM Satellite Radio.

NASCAR on Tour at Wal-Mart will feature race car simulators, display cars such as the No. 10 Nesquik and the Tollhouse Ford cars, drivers from the NASCAR Dodge Weekly Series and other interactive exhibits such as the XM Radio NASCAR Listening Center.

The tour will pull into five Wal-Mart stores in each of the 10 markets the week of a local NASCAR race. The exhibit will stay for five days and take up 10,000 square feet. Stops include Charlotte, NC; Daytona Beach, FL; and Chicago.

The relationship between NASCAR’s Charlotte, NC-based licensing division and Bentonville, AK-based Wal-Mart is an extension of last February’s Fan Days promotion in stores.