Examining what’s next for NASCAR after Monster deal ends in 2019

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CHARLOTTE, North Carolina — NASCAR announced Tuesday that Monster Energy will return as Cup Series sponsor through the 2019 season but is not expected to be in that role after that.

So what does that all mean?

Let us explain.

What happened Tuesday?

Monster Energy’s contract to be the Cup sponsor was set to end after the 2018 season. There was an option for Monster Energy to extend the deal. Monster was to have notified NASCAR before Jan. 1 of its decision. Instead, Monster asked for an extension. Both sides agreed to extend the sponsorship through the 2019 season only.

Why only a one-year extension?

Steve Phelps, NASCAR’s chief operating officer, said both sides wanted it that way.

“For Monster, I think it would be highly unlikely that they would come back,’’ Phelps said. “Both NASCAR and Monster, I believe, are on the same page on that. I wouldn’t say there is anything there hard and fast, but it is highly unlikely that they would return or we would have them return. That is not one-sided. That’s a decision that has been made by both companies. It will give us an opportunity to explore what this new (sponsorship) model looks like.’’

Wait, what is this new sponsorship model?

NASCAR wants to change the structure in how sponsorship would look. The plan would be to bundle the sanctioning body, tracks and media partners instead of having to do separate deals with each.

After NASCAR agreed to a deal with Monster Energy in December 2016, Monster then had to work out agreements with the tracks for signage and such. That took additional time.

Under NASCAR’s new sponsorship model, that shouldn’t be as big an issue.

“What we’re talking about here,” Phelps said, “is looking at combining assets and creating a new sponsorship model.’’

Such a model, though, would not include teams.

“It’s a little more difficult given the number of entities that are out there that are teams to make sure all the teams are participating in one fashion,’’ Phelps said.

So what will the name of the series be after 2019?

Good chance there will be no sponsor name tied to the Cup Series. That way it can be called the NASCAR Cup Series or NASCAR Premier Series or whatever NASCAR chooses to call.

One benefit is that fans don’t have to go through name changes as they have in going from Nextel Cup to Sprint Cup to Monster Energy Cup.

The Premier League did a similar thing in 2016 when Barclays did not renew its deal with the soccer league. There’s no sponsor of the NBA, NFL, NHL and Major League Baseball, but all those leagues have categories of sponsors. That’s the approach NASCAR wants to take.

What if the new model doesn’t work?

“We want to keep our options open,” Phelps said. “There’s some benefit to trying to go all in on something. I think the stakeholders will be in a good place. If the sponsors come back and say, ‘you know what, we’re not sure this is the best avenue to partner with this sport,’ then we’ll have to pivot and go in a different direction. Could we go back to an entitlement model for our top series? We could. Again, I think that’s not our intention. I don’t think we’ll get there, but we certainly want to keep our options open.’’

How does all this impact the Xfinity Series and Camping World Truck Series?

It does not for now. Xfinity signed a 10-year deal to be the entitlement sponsor of that series through the 2024 season. Camping World has a deal in place to be the Truck Series sponsor through 2022.

What happens with Monster Energy after 2019?

Phelps said NASCAR expects Monster Energy to remain in the sport. Monster Energy was aligned with drivers and teams before becoming series sponsor. That avenue would remain for Monster if it chose to do so.

A Monster Energy spokesperson told the Sports Business Journal that the company “wants to continue to be a part of the sport one way or the other.”

What about the sport using a sponsor to build a younger fan base? What happens now?

NASCAR continues to tout efforts to reach a younger fan base. That includes, among other things, children 12 and younger getting in free for Xfinity and Camping World Truck Series races.

Phelps said it was challenging to say if one thing over another was the overriding factor in reaching a younger demographic.

“It’s very difficult to isolate one particular thing vs. another in terms of it being the cause of something,’’ Phelps said. “There are other things that this industry has done over the past couple of years to increase the Millennial audience of NASCAR. That’s a journey we’re going to continue on.

“We have to continue to make sure our content is as strong as it can be that we’re pushing through the digital and social channels. We need to make sure that we continue to cater to kids and to make sure that our Millennial audience is happy. We have to continue the gains we’ve made with our Hispanic fans, which has been significant over the last three years. That journey doesn’t end. And, by the way, we have to make sure that we’re nurturing the existing fan base that we’ve had for many, many years. They’re incredibly important.’’

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Monster Energy extends title sponsorship of NASCAR Cup Series to 2019 only

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Monster Energy will remain the title sponsor of NASCAR’s premier series after agreeing to a one-year extension through the 2019 season but is not expected to return in that role, a senior NASCAR executive said Tuesday.

Steve Phelps, NASCAR Chief Operating Officer, said Tuesday that it is “highly unlikely” that Monster returns as series sponsor as NASCAR looks at a new model toward the entitlement sponsorship. Phelps said it was mutual on both sides to go only through 2019.

NASCAR is looking toward a new model for sponsorship. Phelps said NASCAR wants to bundle sponsorship with sanctioning body, tracks and media partners.

“We want to make sure that our sport is as easy or easier than other sports to do business with,” Phelps said. “We think this is a better model to make sure that sponsors want to stay involved. We think there’s an opportunity for them to feel more invested in the sport … more invested in the sport so they will turn around and do more activation.”

Phelps said he expects Monster Energy to remain in the sport. Monster Energy was aligned with drivers and a team before becoming series sponsor.

NASCAR announced the extension this afternoon. Sports Business Journal first reported the agreement Tuesday.

Monster Energy is in its second year as Cup Series title sponsor after agreeing to a deal in December 2016. The company was to have given NASCAR a decision before Jan. 1 about remaining as series sponsor but requested an extension since 2017 was its first season in that role.

Monster Energy, the fourth brand to sponsor Cup since 1971, is viewed as a company that can connect the sport with a younger demographic.

NASCAR Chairman Brian France was upbeat about what Monster Energy delivered in 2017.

“The promises they’ve made, they’ve kept, with the young demo, edgy shows, edgy marketing, putting our drivers in different places in different light,’’ France said in Nov. 2017 before the Cup season finale at Homestead-Miami Speedway. “That’s what we want. They’ve delivered on that. 

“And like anything else, I think it will get better. This is also a hard program. It’s a complicated program. It’s the best program, but to execute across all these platforms, it’s a big, big sport. There’s nothing like it, so you don’t get an opportunity to just go, well, we’ll do it like that guy did it or this guy does it over here because nobody can have, today anyway, in a major sports league, an entitlement position like this, so it’s a great program ‑‑ and I think it will get better next year.’’

According to Directions Research, 11 million additional NASCAR fans are Monster Energy drinkers. According to the same research, 16 million additional NASCAR fans have heard of the Monster Energy brand.

Cup Series Sponsors

1971- 2003 — Winston

2004 – 2007 — Nextel

2008 – 2016 — Sprint

2017 – present — Monster Energy

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Optimism abounds that Monster Energy will sign extension with NASCAR

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An International Speedway Corp. executive says the company is “optimistic” that Monster Energy will extend its sponsorship of NASCAR’s Cup Series beyond this season.

John Saunders, president of International Speedway Corp., which owns several tracks that host NASCAR races, including Daytona International Speedway, Talladega Superspeedway and Homestead-Miami Speedway, made the comment Tuesday morning during an earnings call with investor analysts.

NASCAR previously stated it is negotiating with Monster Energy and that the deadline for the company to decide was extended from Dec. 31.

Asked about Monster Energy’s status, Saunders said on the ISC earnings call:

“The initial term was 2017 through 2018. It’s our understanding that NASCAR is still engaged in negotiations for an extension. Don’t have a line of sight on how long that extension will be. Initial indications from NASCAR leave us feeling optimistic that there will be an extension.

“It’s been a great brand for our sport. It speaks to a younger demographic. By all metrics from their perspective we think it’s been successful. This is ISC’s position that we think it’s been a successful entitlement for them. So we’re optimistic.’’

NASCAR declined comment Tuesday to NBC Sports about Saunders’ comments and the status of negotiations with Monster Energy.

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NASCAR Chairman Brian France upbeat Monster Energy will remain beyond 2018

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NASCAR Chairman Brian France expressed optimism Tuesday that Monster Energy will remain as series sponsor after this season and said that the Cup Series could use one more manufacturer.

France made his comments on “SiriusXM Speedway” on SiriusXM NASCAR Radio.

Monster Energy, which completed its first year as series sponsor in 2017, was to have informed NASCAR by Dec. 31 if it would remain beyond the 2018 season. NASCAR President Brent Dewar said last month that the sanctioning body agreed to extend that deadline

“They have had a really good run with us, and we’ve had a good run with them, and my hope and feeling is that that’s going to continue,’’ France said Tuesday. “They’ve been good partners. They’re bringing a lot to the sport. They’ve got a lot on their plate and so do we. We’re working with them to make sure that we have as long an agreement as we can. I think we will. I think it’s working that good for everybody. I’m real pleased with it.’’

Asked by “SiriusXM Speedway” host Dave Moody if there is a deadline on when Monster Energy must inform NASCAR of its decision, France said:

“There’s always that, but we just look at our partners differently. We work though everything. Everything to us is long term, whatever that means in a given relationship. My sense is that it has really worked for everybody. It’s also new. They’ve only been here, my goodness, just completed the first year. They’re working out some things and that’s understandable. It’s all good, actually really good with those guys. Love those guys.’’

Last month, Rodney Sacks, chairman and chief executive officer of Monster Beverage Corp., said during an investor meeting that the company was “evaluating” its future with NASCAR.

Sacks was asked in that meeting about the return on its investments, including NASCAR.

“I think that we have been quite successful,’’ Sacks said. “I think we have got a lot more visibility, a lot more recognition for the brand through the NASCAR sponsorship. It’s very extensive. It’s on TV. It’s appearing on the talk shows. We look at the metrics that the NASCAR folks give us and it certainly does seem to have been enhanced. Now to what degree, that we don’t know.

“Certainly we do believe we have been able to increase penetration but again it takes some time. I think we really started in NASCAR at the beginning of the year — very, very quick decision to go into NASCAR (and) it took us a little bit of time to get up to speed and get our activation going. We think we’ll see lot clearer benefits and more benefits coming from that relationship this year.’’

As for manufacturers, France said he felt there was room for one more in the Cup Series to join Chevrolet, Ford and Toyota.

“There’s a lot of work going on on that. Clearly we believe that the sport could not only absorb but welcome another manufacturer. These are tricky things to do. They’re very difficult to pull off. We’re just going to work toward that goal. I believe over time we’re the best opportunity not only in North America, maybe the world in terms of motorsports. We’re going to be aggressive in talking to other manufacturers as we go down the road.’’

Why just one more manufacturer?

“I think there is a limit,’’ France told SiriusXM NASCAR Radio. “There’s only so many key teams that a manufacturer can get their hands on and that takes time,’’ he said. “They want to have good performance and the right team alignments. Most importantly, they want to align themselves to the right teams and sometimes the teams aren’t available to do that.

“Using the Toyota approach that they had, that took them a long time to be competitive. I think the next manufacturer would probably like to shorten that timeline a little bit and be more competitive quicker. We will get another manufacturer, but it’s one step at a time.’’

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Monster Energy ‘evaluating’ NASCAR sponsorship beyond 2018 season

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Monster Energy is “evaluating’’ its NASCAR sponsorship and if to remain with the series beyond this season, Rodney Sacks, chairman and chief executive officer of Monster Beverage Corp., said at an investor meeting Thursday.

NASCAR President Brent Dewar said earlier this month on Motor Racing Network’s “NASCAR Live” that the sanctioning body has given Monster Energy an extension to determine if it wants to remain the series sponsor after this season.

Last year marked Monster Energy’s first year as series sponsor. The company reportedly has a two-year deal with a two-year option.

At the investor meeting Thursday, Sacks said of its NASCAR sponsorship:

“We also commenced this last year with a principle NASCAR sponsorship, as I’m sure you’re aware. That was an interesting change for us. I think it afforded us extensive exposure to many more consumers who would not ordinarily have followed the sports we have been active in.

“We are continuing our sponsorship this year of NASCAR. We are evaluating where we are with the NASCAR sponsorship going forward in ’19 and thereafter. We’re busy in discussions at the moment with NASCAR and looking at and deciding what will be the best way forward for us as a brand. Certainly this year we’re fully vested and we’re excited about the opportunity for the brand and continuing to establish our presence in NASCAR and with the NASCAR consumer.’’

Monster Energy also is a sponsor of reigning Daytona 500 champion Kurt Busch.

Four-time Formula 1 champion Lewis Hamilton and NHRA Top Fuel champion Brittany Force are among the Monster Energy athletes. The company sponsors a number of athletes set to compete in the Winter Olympics, primarily in skiing and snowboarding. Monster Energy also increased its sponsorship in the Professional Bull Riders to be the title sponsor this year of the series in the U.S., Australia, Brazil and Canada. UFC announced this week that it has renewed its global partnership with Monster Energy with a multi-year extension.

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