Sponsors, Start Your Engines: Motorsports Deals On Right Track For 2010

February 11, 2010: Reports of the demise of Nascar and other auto racing bodies have apparently been slightly exaggerated.

In 2010, North American-based companies will spend an estimated $3.37 billion to sponsor motorsports teams, tracks and sanctioning bodies, up 2.1%  from the $3.3 billion spent in 2009, according to research, consulting and sponsorship analysis firm IEG.

Although the projection falls short of the 3.4% increase for the overall sponsorship industry and 2.8% rise for sports properties, it is a turn in the right direction from the 6% decline in motorsports spending from 2008 to 2009, IEG observes in its just released 2010 Sponsorship Report.

IEG observes that some top sponsors dropped out of auto racing after the 2009 season for various reasons. Among them were Allstate, Brown-Forman’s Jack Daniel’s and Jim Beam. However, brands such as Crown Royal, Continental Tire, Peak Motor Oil, Toyota, Best Western, Izod, Aaron's and Mattel have either extended or signed new deals with auto racing circuits for 2010 and beyond.

Nascar recently brought on two new sponsors, both in nontraditional categories: in-theater ad firm Screenvision Cinema Network and Drive4COPD, a health awareness campaign for chronic obstructive pulmonary disease funded by Boehringer Ingelheim Pharmaceuticals, Inc.

In addition, Danica Patrick's entry into ARCA and Nascar's Nationwide Series has brought marketing and consumer focus on the sport.

For 2010, IEG SR projects 4.5% growth in worldwide sports sponsorship to $46 billion. The largest gains will come from Africa and South America, in part due to activity and interest surrounding South Africa’s hosting the 2010 FIFA World Cup and a developing sponsorship marketplace in countries such as Argentina and Brazil, the latter of which will host both the 2014 World Cup and 2016 Olympic Games.

“The motorsports category has suffered more than many others recently, as its high cost of entry in many cases fell victim to increased scrutiny over corporate marketing expenditures and questions about return on investment,” William Chipps, IEG Sponsorship Report’s senior editor, said in a statement.

Brian France, Nascar CEO, addressed this issue, but was optimistic about racing's future, during the Nascar Media Tour conducted at the Research and Development Center, Charlotte, NC, last month. "I would tell you that, while we are not economists, some things are stabilizing for us and our sport," said France. "The first things that stabilized are the car manufacturers. A year ago, there was a whole bunch of uncertainty about their future. . . All four car manufacturers competing in Nascar are much healthier than they were a year ago," referring to Chevrolet, Dodge, Ford and Toyota.

"And then the teams have obviously been affected immensely with the sponsorship business model that has been tough, no question about it. Companies are, as you now know, are very careful, [cautious] to invest a lot of money in sponsorships of any kind, and we are dealing with that. And our teams are working with that. But despite that, that started to thaw a little bit . . . Teams are getting renewals of sponsorship. We are seeing some new companies . . . And so the best place for corporate sponsors to work best has always been Nascar and that's no different today."

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