Jan
27
Sprint Nextel Putting the Screws to AT&T
January 27, 2007 | Posted by VroomDude
It was only a matter of time before merger mania in the telecommunications industry spilled over into NASCAR, wreaking havoc and confusing everyone involved.
A sponsorship dispute is pitting one of NASCAR’s most respected team owners against one of its biggest revenue sources, leaving officials hustling to work out a compromise two weeks before the start of the season.
Richard Childress’ No. 31 car, which is driven by Jeff Burton, is sponsored by cell phone service provider Cingular. But that company has been bought by AT&T, which is phasing out the Cingular brand name.
Under normal circumstances, that wouldn’t be a problem. The team would just slap a few shiny new logos on the car and hit the track.
But when it comes to selling cell phones to race fans, it’s not that easy.
When Nextel signed a 10-year, $700 million deal to become the title sponsor of NASCAR’s top series before the 2004 season, it lobbied NASCAR to ban rival telecommunications companies from becoming sponsors. An exemption was granted for existing telecom sponsors such as Cingular and Alltel, which were allowed to remain in the series.
But with Cingular changing its name, Nextel officials say Richard Childress Racing isn’t allowed to put AT&T logos on its car.
“If the name changes, then that changes the game,'’ said Dean Kessel, Sprint Nextel’s director of NASCAR Nextel Cup series marketing. “Cingular and Alltel were grandfathered in and everybody knew the rules of engagement early on.'’
Somebody bring Winston back, as things never used to be this complicated. Who knows how long it’s going to be called the Nextel Cup anyway, as Nextel was acquired by Sprint shortly after becoming the title sponsor. The Sprint Nextel Cup? Then maybe AT&T will acquire Sprint Nextel, and change it to the AT&T Sprint Nextel Cup.
Gah.
Comments
3 Comments so far
Just found your blog…vroom!
Sprint or Nextel or whatever their name is, should have confidence in their brand and welcome the AT&T brand into Cup racing. Big sponsors are hard to find these days.
I’ll add you to my blog roll!
Wake up- Winston - RJR keep all tobacco sponosrs out of all divisions of NASCAR for 33 years–why do you think Marlboro was in Indy and F1
Pretty apparent from this article that RCR knew all along–was it his greed that led to this?
Wednesday, March 28, 2007
NASCAR fires back at AT&T in legal battle
by Mike Mulhern
JOURNAL REPORTER
AT&T has been pressuring NASCAR with its lawsuit over how to paint the quarter panels on Jeff Burton’s Nextel Cup car as it rebrands Cingular under the AT&T logo.
According to papers being filed in the suit, NASCAR officials told Stan Sigman, the president and CEO of Cingular, five weeks ago that in April 2005, George Pyne, NASCAR’s CEO at the time, told the Richard Childress-Burton team that it would not allow a change in paint scheme or logos if Cingular was bought and had its name changed.
NASCAR further said that its grandfathering of Cingular - after Nextel signed on as the series sponsor - “was tied directly to the Cingular Wireless brand and not the Cingular company.”
The papers further say that “it is generally not in NASCAR’s interest to limit sponsors’ participation in the sport.” NASCAR suggested that AT&T could sponsor a Busch team or a Trucks team instead, if it wished. That is precisely the route that Verizon has taken.
NASCAR’s filing refers specifically to Pyne’s letter to Childress, dated April 4, 2005. It specifies that “should Cingular be acquired by a third party, the Cingular brand is continually welcome as a team sponsor. However, should the company’s name change, we will not allow any paint scheme or branding on the car promoting this new name.”
The papers go on to say: “NASCAR certainly has no desire to eliminate the Cingular brand from NASCAR Nextel Cup series competition.” But, “unfortunately AT&T’s decision to purchase Cingular and then to eliminate the Cingular brand puts NASCAR in the position of having to now enforce the rights granted Nextel in the series sponsorship agreement.”
NASCAR and Nextel signed their initial agreements in the summer of 2003, with Nextel taking over the sponsorship from R. J. Reynolds for the start of the 2004 season.