The Frontstretch: The Longer Nextel Fights, The More Racing Customers They Will Lose by Jeff Meyer -- Wednesday May 23, 2007

Go to site navigation Go to article

The Longer Nextel Fights, The More Racing Customers They Will Lose

Voices From The Heartland · Jeff Meyer · Wednesday May 23, 2007

 

Yesterday here on the Frontstretch, my esteemed colleague Mr. Tommy Thompson wrote in his weekly Thompson in Turn 5 column about how the recent court decision to allow AT&T to put their logo on the No. 31 car would ultimately be bad for the sport of racing.

Well, I respectfully assert that he is wrong! The only entity that this decision is ultimately bad for is simply the France family bank account. This court case has nothing to do with racing…it is all about pride and money. NASCAR screwed up, plain and simple, and now they’re trying to cover their butts.

But why sit there and accuse when I can simply prove it to you point blank. In the spirit of those immortal Saturday Night Live words: "Jane, you ignorant slut…" this is my rebuttal.

Thompson’s Turn 5: "In return for the gargantuan sponsorship, Nextel made no secret of the fact that for $700 million dollars or more, they would expect to be the only wireless communication company allowed to advertise in the series. This became problematic, as both Alltel and Cingular were already established team sponsors, and in the end the sanctioning body and the new prospective series sponsor compromised and agreed to allow the two competitors to continue their involvement, but only as it stood at that time. If either company merged with another competitor of Nextel's, they would not be allowed to advertise the change at the track."

Your Esteemed Jeff Meyer, Voices: The problem here is that NASCAR was making deals with Nextel back in 2003 and telling them what they wanted to hear solely because Brian France wanted Nextel's money, plain and simple. NASCAR could not see past the immediate dollar signs when they were sitting at the bargaining table, or if they could, they were downplaying any residual effects of other cell phone sponsors to Nextel. No deals or
“exclusions” were being given or said to Cingular or Alltel before the contract was made; they were already in the sport to begin with, and NASCAR couldn’t kick them out. The sport was simply trying to close the deal with Nextel and said whatever they needed to in order to do so.

The problem further lies in the actual poor wording of the 2003 NASCAR / Nextel contract itself. While I have never seen it, the “grandfather clause” must not cover everything; in fact, NASCAR's own court papers filed in March of this year prove that.

Basically, the papers say that in April of 2005, the then CEO of NASCAR, George Pyne, "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."

Please remember the original promises by NASCAR to Nextel were made in 2003! All of a sudden, it says here that it wasn’t until 2005 that NASCAR is telling RCR it can't change its logo; to me, that’s a clear sign it must not have been worded properly in the original contract.

Thompson, Turn 5: NASCAR's last minute negotiating with prospective sponsor Nextel in 2003 to "grandfather" Alltel and Cingular was a good faith effort to protect both RCR and Penske from having their primary sponsors disallowed in 2004. Ironically, that intervention by NASCAR on the owners' behalf has now came around to bite them.

Meyer, Voices: Oh please, Tommy! You are starting to sound like a mouthpiece straight from the NASCAR PR offices! "NASCAR is so good. They had the owners in mind."

NASCAR didn't do anything “in good faith” for the car owner…they did it to secure the deal. They were shortsighted throughout the process, and now and only now are they trying to save their butts. If that were not true, why was NASCAR, until just recently, fighting this battle alone? Where was Nextel? This sport knew that their deal with Nextel could be upset if things went against them and they might lose some valuable future profit as a result. They understood the ramifications here, that Nextel might get smart and want to "renegotiate" their ten year deal, as it’s already rumored they might should NASCAR ultimately lose this case.

How did Nextel get involved, I reckon? Well, in the beginning of this whole thing, Nextel was sitting back telling NASCAR, “Hey, you promised us…" and letting NASCAR fulfill that promise. Now that it looks like NASCAR may lose this one, NASCAR is coming back and saying… "C'mon, Nextel! Help us out here. It's for the good of both of us!"

Thompson, Turn 5: Sprint Nextel has no interest in gambling on the possibility of having to award the Nextel Cup to their largest business rivals, AT&T. Winston, the title sponsor for more than three decades, never had to have the Marlboro Man prance around Victory Lane, hoisting the Winston Cup above his head; Nextel shouldn't be allowed to suffer the same fate with its changing landscape of cell phone competitors.

Meyer, Voices: This statement is just laughable! Cingular and Alltel, by Nextel's own agreement with NASCAR, were already in. Do you mean to tell me it would be "unfair" to Nextel if the No. 12 or No. 31 (even as the Cingular car) were to win the Cup? What, are they going to refuse to give it to Ryan Newman if he wins this year?

Whatever the contract actually says or doesn't say is a moot point. Nextel, by letting the whole thing go this far is, in my opinion, cutting their own throat. They could have taken the common sense approach and realized that it is just a logo on the same car. Why worry? Yes, it is still their competitor, but it is just one car that had its sponsor bought by another company.

Just in case they didn’t get what I just said…

YOU COULD LEAVE THE CINGULAR LOGO ON FROM HERE TO ETERNITY. EVERYBODY KNOWS IT IS NOW AT&T! WHAT DIFFERENCE DOES IT MAKE?!

No matter what, Nextel has its advertising platform, a platform that can’t be taken away: it is the Series itself. They have their name on freaking everything. They already benefit from things that they have had no part of. For example, Dale Earnhardt won seven Nextel Cups. No, he didn't! He won seven Winston Cups…but that's not how it is said on TV. Earnhardt and Richard Petty, et al. are called Nextel Cup Champions. Very few people had ever heard of Nextel until 2004; guess how many know about it now? Try 75 million, and then some.

The bottom line is that Nextel is turning the very people they seek to attract, the fans, away in droves with this moronic court battle. Look at the numbers in the poll beside Mr. Thompson's article. Read the comments to his article and my past articles on this subject. They run almost 10 to 1 against Nextel. Is that the kind of advertising and perception they seek from their deal with NASCAR?

Yes, Mr. Thompson, AT & T winning this battle may be bad for NASCAR, but only because they stand to lose profits should they have to renegotiate their deal. The racing will still go on every Sunday, even if the Series should happen to go unsponsored for awhile (which it never will). In any worst case scenario, the Frances have enough money to keep it going, and you can bet that they will at all costs. They just might not get to charge so much for the rights next time.

Greed kills… Nextel and NASCAR will soon learn that.

Stay off the wall, and a Nextel phone!

Jeff Meyer

NASCAR NEWS, RIGHT TO YOUR INBOXAND IT’S FREE.
The Frontstretch Newsletter, back in 2014 gives you more of the daily news, commentary, and racing features from your favorite writers you know and love. Don’t waste another minute – click here to sign up now. We’re here to make sure you stay informed … so make sure you jump on for the ride!

Today on the Frontstretch:
Swan Racing Announces Restructuring, No. 26 & No. 30 ‘Sold’ Off
Tech Talk with Tony Gibson: Taking Stock Of Danica Patrick In Year Two
Vexing Vito: Three Drivers In Need of a Role Reversal
Going By the Numbers: Top-10 NASCAR Variety Hard To Come By In…
Truckin’ Thursdays: Lessons Learned Just Two Races In
Fantasy Insider: Team Revelations For NASCAR’s Short Tracks

FREE NEWSLETTER! CLICK HERE TO SIGN UP

 

©2000 - 2008 Jeff Meyer and Frontstetch.com. Thanks for visiting the Frontstretch!

Mike
05/24/2007 05:30 AM
permalink

If Brian France were smart (I know, don’t laugh too loud), he’d let AT&T run their logos on the car. Right now, as greedy as he is, he’s hurting himself by turning away potential sponsors who could help fill his bank accounts. He could get companies like Verizon, Union 76,TrakFone, and Hess either back as sponsors or as new sponsors. And using the traditional strong-armed tactics that have been a family tradition, could bleed them the same way he’s bleeding other sponsors currently to fill up the family piggy bank as “official products or services of”.

If this lawsuit makes it to court and isn’t settled behind closed doors, some of NASCAR’s highly prized “trade secrets” could see the light of day, as could some of their other dealings.

The fans won’t get hurt in this deal. NASCAR’s already hurt them enough by raising the ticket prices sky high and chasing them away through all sorts of various acts to try to bury the roots of the sport and by trying to turn it into the WWE on Wheels. The only real losers might be NASCAR’s bank accounts and only for a short period of time.

mmack
05/24/2007 08:19 AM
permalink

The bigger issue is that yes, this will hurt NASCAR because lawsuits like this and the tussle between Sunoco and Pennzoil/Shell earlier this year will turn off sponsors from participating in NASCAR. Right now with NASCAR’s declining television ratings in the news, the last thing a company needs to worry about is “Will we get sued if we sponsor a car? Are we violating agreements if we sponsor a car?” Corporations are about the bottom line and good press with no controversy, so between the ratings and lawsuits that get bigger coverage than their driver, prospective sponsors may take their cash and say “You know what, we’ll produce a series of commercials for the NFL season. Everyone watches football and we’ll be sure to get the exposure with no hassle.” So now a team that needs a sponsor loses one.

It also sets a dangerous precedent because if Nextel wins this fight, what stops other “Official” sponsors of NASCAR from demanding competing sponsors are removed from cars? Will Annheuser-Busch demand Miller sponsorship be removed from the Penske team? Could Allstate demand RCR end it’s partnership with State Farm? Most of these scenarios are unlikely, but remember the Gatorade/Poweraide Coke/Pepsi Victory Lane dust up a few seasons back?

NASCAR is going to find out the hard way you can’t play both sides of the street in business like they have for very long. And that will hurt everyone, teams, fans, sponsors, and the sanctioning body as well.

leo
05/24/2007 11:02 AM
permalink

Mr. Meyer
It sounds like you had a bad experience with your cell phone?
Look if you hate NASCAR so much why don’t you pick up SOCCER, at least when you write about something you don’t have a clue, I’ll understand!
Listen NEXTEL, AT&T, NASCAR, WISTON, BUD their all big business and they suppose to look out for their interests not the fans but stock holders.
Welcome to the cruel world of big Corporations.

Sonny
05/24/2007 11:31 AM
permalink

You would think the sponsorship battle on the track would be good for NA$CAR, just look at the fight for the cup in 2005. Both Lowe’s and Home Depot had record sales that year. France needs to leave the AT&T car in and get rid of the clause/lawsuits. Open the door for more sponsors and give the fans what they want, NASCAR would thrive in the end.

Chuck
05/24/2007 11:45 AM
permalink

We are not talking about “official” sponsors we are talking about the title sponsor. The loss of exclusivity for the title sponsor will decrease the value of the sponsorship tremendously. If you remember when Nextel was signed, Sponsors weren’t beating down the door then. Look at the Busch series now. Lower sponsor money means lower points funds. I would rather a team lose a sponsor than the whole series lose THE sponsor. AT&T could have been in the sport all along but they would not step up and sponsor car before, why is it so important now? NASCAR and NEXTEL are getting screwed on this one. Why is the possible damage to AT&T more important than the definant damage to Nextel and Nascar?

chris
05/24/2007 12:58 PM
permalink

Chuck, technically, AT&T, as it sits now, has been in the sport all along, as Cingular was a joint venture between SBC (the new AT&T) and …umm, Bellsouth, I think. SBC bought the half they didn’t own, and changed their name…but it is still the same company that has been sponsoring that car for quite a while. I am assuming that is a primary reason why AT&T has won the courtroom battles thus far, and also why I fail to see why NASCAR and Nextel have a huge issue with this.

I think they’re trying to use this as a shoehorn to push AT&T out, versus “Protecting their exclusivity” which sounds like Spin to me. Would they have done the same thing if Cingular was changing it’s colors to Blue from Orange?

And to top it all off, Sprint is planning on phasing out the Nextel brand…

Chris

J. Meyer
05/24/2007 02:08 PM
permalink

Hey folks, it’s all about perception. If the “stupid, ignorant, redneck, casual fans” perceive Nextel/Nascar to be bullies they will NOT be in no hurry to use Nextel phones. (Who service, I’ve heard is terrible from the emails I get.)
And for the record….
My cell is and always has been U.S. Cellular

Frank Smith
05/24/2007 02:55 PM
permalink

Jeff,
You have just covered an item (Nextel vs AT&T)that I have been waiting on someone to figure out. The grass roots fan does not like to see a team BULLIED by NA$CAR. This fight can only help AT&T and HURT Nextel. Fans are loyal to drivers and owners, NOT NASCAR. The day RCR closes it’s doors is the last day I will ever follow NA$CAR as I have been doing for 50 years. By the way, has anyone stepped up to the $40,000,000.00 price tag yet for the BUSCH Series?

Philip B.
05/24/2007 04:05 PM
permalink

If Bobby the Brain France wants to be so much like the NFL, he would eliminate the title sponsorship. What if the Vince Lombardi trophy became the “You Name It Because You Were the Highest Bidder” trophy each year? Drop the title sponsorship, name the Cup something permanent (the France Cup has been suggested), and let the owners find their own sponsors. Stop pitching products on a car that you don’t own, NASCAR, in victory lane and stop telling the owners from whom they can procure sponsorship.

Ken Morelli
05/24/2007 11:38 PM
permalink

I’m just a racing fan as I’m sure 98.9% of the Nascar fans are….. Nascar aka The France Family, tried to bully AT&T and they lost… They took them to court and they lost….They took them to Appeals Court and they lost….Maybe this is a sign that everybody, including the court system is seeing what Nascar really is…..

 

Contact Jeff Meyer

Recent articles from Jeff Meyer:

Voices From The Cheap Seats: The Tale Of Two Tires
BSNews! Bruton’s Plans Extend Beyond Bristol’s Track
Top Ten Reasons Fans Failed To Show Up At Bristol Sunday
BSNews! NASCAR CEO Given "Special" Award Amidst Lavish Fanfare
Fan Coun-ci-What? Just What Is It That NASCAR Wants To Study?

Want to know more about Jeff Meyer or view his complete article archives? Then hop on over to his archive and bio page.