Re: NASCAR, AT&T going to war

On Apr 18, 9:43 am, Alan Jones <ajo...@xxxxxxxxxxxxxxxxxxx> wrote:
Going to court

On April 26, a hearing will be held in U.S. District Court in
Atlanta, where NASCAR will represent itself against team sponsor
AT&T in order to protect the rights of its series sponsor,
Nextel. The case will determine if AT&T has the right to sponsor
Jeff Burton's No. 31 Chevrolet in 2008 and beyond following the
company's permanent name change from Cingular (the current
sponsor of the No. 31) to AT&T. Depending on the outcome,
Burton's team may need a new sponsor next season.

For now, the pending litigation has left NASCAR fans wondering
how such a seemingly simple dispute can wind up in federal
court. Further examination reveals issues of exclusivity,
sponsor loyalty and marketing competition -- the latter as
intense as the racing on the track. Here's a review of the key
issues and developments leading up to the court date.
Nextel and the grandfather clause

Potential conflict wasn't on the minds of Nextel officials when
they were negotiating to sponsor NASCAR in '03. At the time,
they were merely seeking maximum exposure as a new company
looking to wrap itself around the sport's top level.

The growing cell phone giant wanted a high degree of marketing
control to sponsor the Cup series, and their request was
reasonable, given that outgoing sponsor Winston had engineered a
deal for 31 years that gave it exclusivity rights at every level
in NASCAR. From 1972 to '03, no other tobacco companies were
allowed to sponsor any teams, drivers, or tracks hosting any
NASCAR series without Winston's approval. With a $70 million per
year investment on the table, Nextel was looking to get a
similar boost out of its marketing dollars, a position NASCAR
understood.

"There are certain sponsors that have these larger commitments,
and therefore certain assets and rights," NASCAR director of
business communications Andrew Giangola told SI.com. "The series
sponsor helps all of our teams and all of our drivers. And
because of their unique position in the sport, they deserve
special protection."

In Nextel's case, that protection was offered -- but getting it
wasn't as easy as it was for Winston. Kicking existing cell
phone sponsors out when Nextel signed on could have been a messy
situation for everyone involved, especially when two of those
companies sponsored prominent teams. At the time, Ryan Newman
and Robby Gordon were combining to win 10 of the 36 races in the
series, and each had a cell phone company prominently displayed
on the side of their cars (Newman had Alltel on his Penske
Racing Dodge, while Gordon's RCR Chevrolet was sponsored by
Cingular Wireless).

Not wanting to be the bad guy, Nextel came up with a solution
that would appear to solve the problem while still providing it
the exclusive rights it sought. Through a "grandfather clause,"
cell phone sponsors already involved in the sport would be
allowed to continue participating as they already were -- as
long as they met certain future conditions. NASCAR agreed to the
clause, and Nextel became the new series sponsor (unlike
Winston, the exclusivity does not extend to other NASCAR series
such as Busch or Trucks).

"The way to think about [the clause] is it's a snapshot in
time," Nextel director of NASCAR marketing Dean Kessel said. "As
long as sponsors stay the way they are from that point in time
(back in '03), they can participate in the sport as long as they
want to. If those parameters change -- logos, marks, ownerships,
things of that nature -- it's very clear, not only in the
contract or other correspondences from NASCAR over time, that's
not allowed."

http://sportsillustrated.cnn.com/2007/writers/tom_bowles/04/16/nascar...

___

-http://SportswriterUSA.com
-http://SpeedWorldMagazine.com


This one should be interesting to watch. Nascar for once has tackled
someone with a checkbook that is as big as theirs and has not a single
worry about pr issues. ATT really has nothing to lose. Just the PR
alone from the press coverage of the issue may generate more exposure
than the sponsorship. ATT even if they lose they win. Nascar trying
to block their particpation comes off as the evil greedy one, which
could be costly when one needs sponsors and good will to keep the
money train running. ATT has no reason to back down, and Nascar may
not be able to settle. This one may be as much fun to watch as the
Kentucky suit.

.

Relevant Pages

  • Re: NASCAR, AT&T going to war
    ... Going to court ... where NASCAR will represent itself against team sponsor ... Nextel and the grandfather clause ...
    (rec.autos.sport.nascar)
  • NASCAR, AT&T going to war
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    (rec.autos.sport.nascar)
  • Re: NASCAR, AT&T going to war
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