NASCAR leverages existing relationships with companies for new Cup Series sponsor model

NASCAR unveiled its new Cup Series sponsorship model Thursday. And while the sponsor structure is new, the four companies signed up as “premier partners” are very familiar to NASCAR fans.

After decades of title sponsorship from Winston, Sprint/Nextel and Monster Energy, NASCAR’s Cup Series won’t have a presenting sponsor starting in 2020. Instead, Busch, Coca-Cola, Geico and Xfinity have bought in as lower-level sponsors in what NASCAR says is a “tiered” sponsor system.

“They've been in our sport for a long time,” NASCAR vice president Daryl Wolfe said Thursday of the four companies. “They're invested in our sport emotionally, too. They care about the sport. They promote aggressively around the sport.

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“We believe they're the right four partners for us going forward.”

All four companies had direct sponsorship agreements with NASCAR before its revamp of the Cup Series model. Most notably Xfinity, the title sponsor of NASCAR’s No. 2 series. The companies will have a “heightened level of integration and visibility” as part of their three-to-five-year deals with the sanctioning body.

It’s undoubtedly a positive for NASCAR that the four companies wanted to continue being associated with its top series in a “premier” capacity. In a time where sponsor retention is extremely important, getting companies already invested in auto racing to keep that investment isn’t a small feat with or without a significant increase. Wolfe declined to delve into the financial details of its “premier” deals.

However, it is conspicuous that none of the four companies shown off Thursday is new to NASCAR. Outside of team sponsorships at the lower levels of NASCAR and personal deals with drivers, Monster didn’t have any official affiliation with NASCAR until it replaced Sprint after the 2016 season.

At the time of Monster’s unveiling, NASCAR was beaming with the potential for the company to bring in new — and younger — fans to the series. That really didn’t happen. Or if it did, it happened on a scale that wasn’t large enough to notice with a quick glance.

Monster got a heck of a deal sponsoring the Cup Series too. The company reportedly paid less than half ($20 million) of what Sprint was paying ($50 million) in the final years of its deal to sponsor the Cup Series. And that Sprint extension was negotiated at a lower rate than the 10-year, $750 million deal that Nextel signed to replace Winston after the 2003 season. The price Monster paid was a far cry from the $1 billion over 10 years in rights fees that NASCAR allegedly wanted in 2015.

The company was averse to a long-term commitment at that discounted rate, too. Its deal with NASCAR was a two-year agreement with a two-year option for the 2019 and 2020 seasons. That two-year extension ended up turning into a one-year deal for 2019 and NASCAR’s desire to look at the sponsor system it unveiled Thursday.

“The last three years Monster Energy has been a fantastic partner to this sport, has brought a lot of engagement opportunities, excitement opportunities, have done a fantastic job,” Wolfe said. “We just thought it was time to do something different.”

It’s fair to wonder just how much the financials of the Monster deal were an impetus for NASCAR to look for that something different. The Monster deal undoubtedly had a trickle-down effect across the board for other sponsorships.

And while it’s illogical to believe that the combined investment of Busch, Coke, Geico and Xfinity matches what Sprint was paying for its title sponsorship, teams could have an easier time enticing sponsors without the cloud of a discounted series sponsor contract hanging over negotiations.

The new sponsorship system is also a chance for NASCAR to get another change out of the way ahead of a 2021 season that’s set to feature a completely redesigned Cup Series car and a schedule that could look a lot different as well. NASCAR is in the midst of a serious overhaul, one that could make sponsorship opportunities more enticing for companies looking to jump into the series.

But for the moment, NASCAR is relying on some familiar faces after its tryst with an unfamiliar one.

“In regards to these partners behind us, not only have they been involved in our sport for a long time, they activate around our sport and they promote our sport,” Wolfe said. “They want the sport to succeed. So this was an opportunity to kind of clean things up a little bit, create more of a holistic approach for the brands behind us, and promote the sport in a more aggressive and seamless manner.”

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Nick Bromberg is a writer for Yahoo Sports.

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