Logo motion: the eyes have it when sponsors spend fortunes to stick their names on NASCAR's 200 mph moving billboards.
Saturday, October 1 2005
NASCAR goes loco over logos. And why not? Plastering sponsors' names all over cars (and drivers) pumps plenty of financial fuel into the more-than-$15-million-a-year tank that teams need to compete in stock-car racing's highest division, the Nextel Cup series.
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Primary sponsors--such as St. Louis-based Anheuser-Busch's Budweiser for Dale Earnhardt Jr. or Mooresville-based Lowe's for Jimmie Johnson or Atlanta-based Home Depot for Tony Stewart--pony up about $10 million per season. For that, they get their logos displayed on the hoods, tops and sides of the cars. Secondary sponsors pay from $500,000 to $1 million for smaller logos on the sides and rears. Why so much? Because a televised race can become a three- to four-hour commercial. NASCAR's 36 Nextel Cup races attract more than 13 million spectators--not to mention more than 200 million watching on TV--each season. Some sponsors have calculated that exposure is worth $40 million a year.
Wall Street also is watching, according to Stephen Pruitt, a finance professor at the University of Missouri at Kansas City. Studying 24 public companies that sponsor Nextel Cup teams, he found their market caps increased an average of more than $300 million during the two days after a sponsorship announcement.
That Nextel Cup logo itself could wind up having a short run. Last year, Reston, Va.-based Nextel bought the naming rights for 10 years for what used to be the Winston Cup division. Reported price: $750 million. Last December, Overland Park, Kan.-based Sprint purchased Nextel for $35 billion. Plans call for Sprint Nextel Corp. to market itself as Sprint but keep the Nextel name on the cup--and the series logo--at least through 2006. Considering its value to NASCAR and Sprint, maybe a new logo should incorporate a cash register.
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Photography by Scott Stiles