Sunday, December 12, 1999
Official sponsors line up at speedway
BY JOHN ECKBERG
The Cincinnati Enquirer
First, it was the official Kentucky Speedway uniform from Mason-based Cintas Corp. Next came sponsorships for the official track car and truck, the official meat, the official grocer, the official barley and malt beverage, the official detergent and the official local casino. And now — with Nabisco aboard — the official cookie and cracker.
As work continues on the $150 million, 70,000-seat racetrack, sponsorship deals are piling up. What's next? The official toothpick and toothbrush?
Maybe ... the official napkin has recently been claimed by the Procter & Gamble Co.
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OFFICIAL SPONSORS
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• Cintas Corp.: uniforms
• Tri-State Quality Ford Dealers: cars/trucks
• Blue Grass Quality Meats: sponsor of the Blue Grass Quality Meats 200 race
• Kroger Co.: sponsor of the Kroger 225 race
• Budweiser: beer
• Coca-Cola: soft drinks
• KOI Auto Parts: auto parts store
• Procter & Gamble Co.: its Tide is official detergent
• Nabisco: cookies and crackers
• Kentucky Lottery: lottery company
• Belterra Resort: sponsor of the Belterra Resort Indy 300
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“It's called marketing,” said track chairman and co-owner Jerry Carroll. “But the main thing is to have official fans.”
The cachet of national races and sponsors — some races are expected to be televised globally — will bring plenty of cash to backers of the privately funded speedway, about 45 minutes southwest of Cincinnati in Kentucky's Gallatin County.
“A racetrack is not neces sarily a hometown thing,” Mr. Carroll said. “What you have, though, is a winner in every race. When the Bengals are not winning, I'm not sure it's good for people to walk out of Cinergy Field after a 44-nothing game and go home and pay a Cinergy bill.”
The track's racing surface is in place, and crews are finishing the main grandstand area and 50 private suites that have already all been purchased. A 210-seat, glass-enclosed Kentucky Club is 70 percent sold at $5,000 per seat.
Some of the track sponsorship deals are no-brainers.
Outback Steakhouse co-founder Chris T. Sullivan is a Kentucky Speedway partner, so it is only natural that the restaurant will be the official caterer for the proposed 250-seat conference center.
It also will be the track's main concessionaire, with Outback food supplied to the hospitality area, luxury suites and club seating areas.
The marketing department of the speedway in Sparta has a heady goal of raising $20 million in first-year operating revenue from race sponsorships, suite sales, track naming rights, sponsorships, grandstand-seating revenue and cash from billboards and other track signs.
Companies are flocking to the sport because some experts believe racing fans are among the most loyal product consumers anywhere. NASCAR officials say that 72 percent of race fans are predisposed to buy products from companies that sponsor their favorite racing team or racing sport. That compares with 52 percent for tennis, 47 percent for golf and 38 percent for Major League Baseball, according to a 1998 NASCAR report. Women, who are more likely to make household buying choices, represent 38 percent of the fans of NASCAR (the National Association for Stock Car Auto Racing).
NASCAR is also attracting companies with some other numbers:
• More than 11 million people attended NASCAR races in the United States, and 252 million watched NASCAR events on television in 1998. That put NASCAR'S television ratings in second place behind the National Football League.
• Licensed product sales have exploded tenfold in eight years, from $80 million in 1990 to $950 million in 1998.
NASCAR cashed in on its popularity surge in November when it signed a deal with NBC, Fox, FX and Turner Sports that was worth an estimated $400 million over six years, beginning in 2001.
That deal put NASCAR behind only NFL football ($17.6 billion, eight years) and NBA basketball ($2.64 billion, four years) on the big-bucks totem pole.
Ratings are up 78 percent over the last three years.
Kentucky Speedway officials have not disclosed prices of their sponsorship deals, but analysts insist they are not cheap.
A P&G or breakfast cereal company can expect to spend $5 million to $6 million annually to be title sponsor of a team on a Winston Cup car, said Steven Eisenberg, managing director and leisure industry analyst at CIBC Oppenheimer Co., a New York City-based investment firm.
Martin Wingard, regional vice president for Nabisco, said the cookie and cracker sponsorship was a package deal that included a luxury suite, an allotment of tickets for races, signs at the track and a motor sports presence on packaging and point-of-purchase displays. The amount of the sponsorship was not disclosed.
“We feel like motor sports is a family sport,” Mr. Wingard said. “They are some of the most passionate and loyal consumers with a wide demographic audience that includes kids.”
The deal will also bring race cars to stores as part of the company's cookie and cracker promotions, he said. “The retailer really likes that.”
Molly Humbert, spokeswoman for Tide, said the P&G sponsorship begins in 2000 and complements the company's sponsorship of the Tide race car driven by Ricky Rudd for 13 years.
“Our logo and product message will be visible with signs throughout the track, in the corporate hospitality village and grandstand seating areas,” she said.
“The new venue had to build on our existing program, and the Kentucky Speedway met those requirements.”
Not all marketing experts are convinced that sponsorships for motor sports drive buying decisions. Chris Cooper, vice president of Marketing for America's Research Group, a consumer marketing strategy firm based in Charleston, S.C., suggests buying patterns of race fans may not be significantly affected by sponsorships.
“Americans are always fixated on heroes and activities and events,” he said. “That's no surprise. The real question is does sponsorship of vehicles, napkins and hot dogs impact buying. The research we've done doesn't always show a clear relationship.
“We're always asking what influences grocery-buying decisions and apparel-buying decisions. We are yet to have anybody say NASCAR racing.”
Newspaper and TV advertising are always No. 1 and No. 2, followed by direct mail, billboards and radio. He said it was “a stretch” to think that a Boar's Head meat advertisement at a track will translate into a consumer buying the product a few days later.
“(The sponsorship ads) do deliver publicity and looks and face time at events,” Mr. Cooper said. “But does it impact shopping habits? Our research shows it doesn't.”
Negotiations are under way for the official telecommunications provider, official tractor, official lawn and garden equipment company, official potato chip and official home improvement company, said Mark F. Cassis, executive vice president and general manager at the Kentucky Speedway.
Mr. Eisenberg said that, while sponsorship prices vary widely depending upon the package, one thing is certain: “Sponsorships can be a very, very solid source of long-term revenues. This is the fastest-growing spectator sport.”
Selling a track that exists is a lot easier than selling a blueprint for a track that is going to exist, officials said.
“When word-of-mouth begins to go, there's a ripple effect. It makes people comfortable and they feel good about putting their money into a sponsorship,” Mr. Carroll said.
“The most important thing for a company is to spend their advertising dollars in the right place. You've got to get a bang.”
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