By Barry Janoff
December 2, 2016: December 1 was a good day for Monster Energy.
At noon ET, Tiger Woods played his first round of competitive golf in more than a year, teeing off at the Hero World Challenge and sporting a golf bag with the logo of his new partner, Monster Energy.
Later that day, Monster Energy unveiled a multi-year deal in which it became only the fourth company in Nascar history to have title sponsorship for the circuit’s top-tier race series, and also obtained status as the official energy drink for Nascar.
Monster Energy will also hold race sponsorship to the Nascar All-Star Race.
The deal was so big that Brian France, Nascar chairman and CEO, said, "This is one of the few sales calls that I personally made. I knew how important it was to align ourselves with a dynamic company that reaches different audiences.”
The length and terms of the deal were not disclosed, but both parties hailed the partnership as the perfect fit for both brands.
"They're going to bring their brand, their excitement, their energy to this partnership, and the fans are going to be the winners," said Steve Phelps, evp-chief global sales and marketing officer for Nascar. "It's all about engaging the fans and giving the fans unique, fun experiences, whether at the race track or through different mediums, through social, digital, content," said Phelps.
Coca-Cola is an investor in Monster Energy, but "they have no involvement in this deal. We are an independent company," said Mark Hall CMO for Monster Energy.
France, Phelps, Hall and Mitch Covington (vp-sports marketing Monster Energy) were together at a media conference on Thursday in the Wynn Las Vegas Hotel, part of Nascar’s Championship Week, to share details of the alliance.
Sprint had been title sponsor since 2008. In 2011, it extended the deal through 2016 season, but told Nascar in 2014 it would not renew again.
According to industry analysis, Sprint was paying about $50 million annually, and supported with an undisclosed amount of marketing.
When asked about specific financial terms of the new deal, which some analysts said was less than the Sprint pact, France said, "There are differences in the agreements. We will activate in different ways. There will be more activations, so it is more, not less."
"They can reach our core audience and help us deliver a new one," said France. "They know how to (activate), and you will see that at every track. They will be impactful, exciting for our teams, drivers and fans.
"And we are doing things for them. We will give them a platform that they’ve never had. This is a partnership that we want to build over time. It was a very difficult agreement to come to because of the complexities, a lot of components that had to be sorted out. But we are both excited about it,” said France.
The new name and logo for the race series will be unveiled soon, according to France.
Title sponsorship for Nascar’s top series dates back to 1979, when RJ Reynolds signed a deal to have its Winston cigarette brand as title sponsor. That union lasted through 2003. Nextel took over in 2004, then it morphed to the Sprint Cup Series in 2008 following the Sprint and Nextel merger.
"We view this as a rare opportunity that does not come along every day," said Hall. "Only (three) sponsors in 30-plus years that have been in this position.
"They know how to (activate), and you will see that at every track. They will be impactful, exciting for our teams, drivers and fans."
"If you asked me five years ago if we would have contemplated this deal, I would have said never in a million years. But it is an opportunity to be associated with a premier professional sport, to be closely partnered with that sport and to work together to build both of our brand," said Hall.
Under the agreement, energy drink sponsors already involved with Nascar may remain in place. Potential sponsors from the energy drink category would not be eligible for future sponsorship if not already involved in the sport.
"We are in a competitive industry," said Hall. "To the extent that we can get a leg up in our industry, we like that. Red Bull is a very good competitor. Do I think this deal will help? Yes."
Monster Energy’s involvement with Nascar dates back about ten years to an endorsement deal with then driver Robby Gordon. The company then had a deal with Kyle Busch in the Nationwide Series and since 2012 has had an official alliance with veteran driver Kurt Busch in the Sprint Cup Series.
Monster Energy has existing sponsorships with a number of motorsports sanctioning bodies, athletes and teams, but said that the Nascar deal was the biggest sponsorship step in the company's history.
The company also has pacts that include BMX, mountain biking, pro bull riding, skateboarding, skiing, surfing and freestyle motocross. Athletes on its roster include UFC champ Conor McGregor, BMX champ Dakota Roche, athlete (MMA, wrestling) and actor Dave Bautista, top skateboarder Kyle Walker; and Professional Bull Riders including Chase Outlaw, Gage Gay and Guilherme Marchi.
The company has inroads into gaming and music, as well, with alliances that include Chevelle, Five Finger Death Punch and De La Soul.
According to Phelps, "We had the opportunity to talk with hundreds of brands, an opportunity we haven’t had for 13 years since joining with Sprint. This is a new Nascar and we were able to bring our story to these brands. Many of them will bring their money to Nascar.
"They are an edgy brand. A fun brand," said France of Monster. "They reach a millennial audience in a different way. They know what they are doing. This is their DNA.
"Frankly, with Sprint and Nextel before them, motorsports was all new to them. It took a while for them to sort it out. How to reach fans, activate at the track, the media. How do you do all those things. They ended up being very good at it but these guys are ready on Day 1," said France.
Although France admitted that the deal came "a bit late in the game" — with the 2017 season beginning in February— "they have the activation plans, the tools and the people to do it all in-house. They had very aggressive plans when we met with them. They have big plans to interact with our core audience and bring in a new audience. We are confident they are the right partner for us.”
Specific marketing was not detailed, but Hall said that significant strategies were in place.
"Because we market in a non-traditional way, we count on our athletes, our endorsers and fans to market for us," said Hall. "We have never done traditional media . . . but this might be the way to use television and traditional media so that people connect Nascar with the name Monster Energy."
According to Covington, "We have the ability to weave content through out our platform and provide more access points for the content and our the relationship with sponsors. This will be a big step up for us and a big step up for our partners.
"Monster has built its brand on racing and motorsports, and Nascar is the pinnacle of motorsports in America," said Covington.
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