Cell Phone Sponsors Spark Debate in NASCAR

It is a secret to no one that sponsors are what make the NASCAR world go round. And it is not just the NASCAR teams that require funding by endorsing certain products. Everything in NASCAR has an official sponsor. For example, All-State is the 'official Insurance of NASCAR', and Callaway Golf is the 'official Golf Ball of NASCAR'. Oh, here is my favorite- Oral B is the 'official oral care product of NASCAR'.

NASCAR and the teams that compete live and die by their sponsors. However, herein lays the problem- for every company that becomes a sponsor in NASCAR, there is a multitude of competing companies selling similar products. And because NASCAR has grown into the marketing powerhouse it is today, some of these companies are not willing to share the wealth.

When Nextel replaced R.J. Reynolds Tobacco Company as the official sponsor of NASCAR in 2004, they sent a stringent message by prohibiting competing cell phone and telecommunication companies from becoming primary sponsors for NASCAR teams. Alltel, the sponsor for Ryan Newman and Penske Racing, and Cingular Wireless, the sponsor for Jeff Burton and Richard Childress Racing, were listed under the grandfather clause since they were already under contractual obligations, and both companies have remained in the sport ever since.

Recently, a new development has transpired regarding cell phone companies and their place in NASCAR. BellSouth, which is the provider for Cingular Wirless cell phone service, was acquired by AT&T. Cingular Wireless is now referred to as the 'new AT&T' and its name will eventually be phased out. The AT&T logo will completely replace the Cingular Wireless logo in due time. However, AT&T is not listed as an exception in the no-compete clause signed three years with Nextel. So what is next for Jeff Burton and Richard Childress Racing?

AT&T has filed a lawsuit against NASCAR in the U.S. District Court in Atlanta in an attempt to force the sanctioning body to permit the placement of their logos on Jeff Burton's car. The battle lines have been drawn, and it will be interesting to see how this plays out.

Nextel, which was purchased by Sprint in 2005, has the responsibility to protect their $750 million investment, but they must also realize that finding a sponsor can be a daunting task. Several teams have shut down because they could not find adequate funding from sponsors. It is understandable that they prefer to be the only telecommunication company associated with NASCAR, but at the same time, it is vital that their strict stance not be the primary reason for the possible demise of some teams.

Burton has been in a position before where he was in limbo as far as sponsorship is concerned. In 2004, CITGO abandoned his Roush Racing team, and he spent the first half of the season without a primary sponsor, which triggered his relocation to Richard Childress Racing. Could Burton find himself in a similar situation?

Fortunately, Richard Childress has a positive track record with sponsors, so if Sprint Nextel has their way, I wouldn't expect an empty hood and quarter-panel for too long. But what about Robby Gordon?

Gordon, the former driver of the Cingular Wireless Chevrolet, is an independent owner in NASCAR with limited funding. Now in his third season as a car owner, Gordon has been able to maintain several small sponsorship packages. However, he has recently lost support from Fruit Of The Loom and Harrah's Casinos, which has left a void in his sponsorship situation.

Gordon's Busch Series operation is supported by Verizon Wireless, and for the Nextel Cup race at Atlanta, Gordon had planned to sport the Motorola logo. However, NASCAR quickly demanded that Gordon's team to remove the Motorola emblems from the car.

Even though Motorola provides products for various telecommunication companies, NASCAR felt as if Verizon was somehow trying to incorporate themselves into a sponsorship role through one of their partners.

Gordon was befuddled by NASCAR's demands. "It's just mind boggling, and I'm having a hard time with it. It's going to have an effect on our team when we can't run our sponsors. It's easy to do the math on these sponsorships (about $400,000 per race). We felt with them (Verizon) in the Busch series and Motorola strictly in the Cup series, there wouldn't be a conflict."

"I didn't anticipate anything like this, I can tell you that...And I didn't even imagine that Motorola wouldn't be approved."

Eventually, NASCAR worked with the overwhelmed Gordon, and allowed the Motorola sponsorship, but only to promote the company's digital audio players.
With the rumors swirling around the Alltel could be merging with another company, possibly Verizon, this could spell trouble for Penske Racing and Ryan Newman. However, if AT&T somehow wins this court hearing, and they are permitted to place their logos on Burton's car, you can bet that whatever company acquires Alltel will take similar actions to ensure their place in NASCAR.

Shell versus Sunoco

Sunoco is none too pleased with Shell at the present time. At Daytona, Sunoco became perturbed when they felt as if the Shell logos were too visible on Kevin Harvick's uniform and helmet. Since then, they have requested that Harvick use a different helmet, one in which the logos are practically obscured.
It is safe to say that Sunoco is not celebrating Shell's arrival to NASCAR as a primary sponsor, especially since the driver is Kevin Harvick, one of NASCAR's most popular and successful drivers. In fact, they are considering taking legal action which would force the Shell to remove all of their Kevin Harvick banners.
You know, this sponsorship dilemma is getting out of hand. Sponsors are not easy to come by, and if every company that is an official sponsor of NASCAR took this stand, the options would be very limited, and a lot of teams would be forced out of the sport. It is a very disturbing trend that will only result in adversity for the entire sport of NASCAR.