Erik Spanberg: NASCAR Hall of Fame starting to have some success selling sponsorships
COMMENTARY
Everyone knows NASCAR thrives on corporate sponsorships and they also know those sponsorships have been scarce in recent years.
So it comes as little surprise that the NASCAR Hall of Fame faces similar challenges. Just over two months before the $200 million hall of fame opens, backers are starting to see some glimmers of hope on the corporate sales side.
This week, NASCAR Automotive Group agreed to a three-year deal worth $500,000 to $750,000 annually. Two one-year options, if exercised, would push the yearly payments over $1 million.
It marks the second sponsorship deal signed by the hall, with Lowe’s Home Improvement committing in January.Terms of the 5-year Lowe’s contract remain under wraps, per contractual requirements.
More than 10 percent of the publicly funded hall’s price tag — $21.5 million — is to be repaid from sponsorship revenue. That money came from bank loans and the banks have allowed for more time to repay that amount, hall officials say. A lengthier repayment means a more expensive repayment as well, since interest accrues all the while.
“The banks have been supportive,” says Winston Kelley, the hall of fame’s executive director. “With market conditions the way they are, they’re saying to us, ‘Let’s not undersell in a down market.’”
Kelley and the hall of fame vow to take their time closing sponsorship sales to make sure they get the proper value — and fit.
NASCAR Automotive Group’s contract is an example of their philosophy. The two sides spent six to nine months negotiating. And both parties believe the resulting deal makes sense.
The automotive group is part of NASCAR’s licensed-products division. Thirty companies, including Goodyear, Mobil 1 and Raybestos, have agreements with NASCAR to use the sport’s logo on their products and many are used by the race teams. At the hall of fame, NASCAR Automotive Group will have the companies’ products displayed and highlighted in an exhibit on how teams build and prepare cars for a race throughout the week.
“It highlights our partners,” says Odis Lloyd, managing director of the automotive group. “And it’s another asset that delivers value to them.”
The Lowe’s sponsorship is for a race-team hauler display in the hall of fame.
Kelley, the executive director, expects to sign another six to eight sponsors by the time the hall opens in May, or shortly thereafter. The hall has no set limits on sponsors. Instead, the emphasis is on how a sponsor connects to the sport and the exhibits and displays in the hall of fame.
Most of the sponsorships are customized and tailored to a company’s specific needs, but getting in the door at the hall of fame will cost a company $100,000 annually or more.
Kelley expects the hall to sell itself, in some ways.
“This isn’t like selling a stadium or an arena,” he says. “There will be even more interest when it opens up” because of the hall’s uniqueness.
Despite the economy and NASCAR’s sagging popularity (declining attendance and TV ratings), the hall of fame stands by earlier projections of attracting 800,000 visitors during its first year.
Ticket prices range from $12.95 to $19.95.
Sponsors, not to mention the taxpayers in Charlotte footing the construction bill, are counting on the hall to make good on its projections. Without big crowds, Lowe’s and everyone else will find themselves advertising to an empty room. A really nice empty room, but still an empty room.
Kelley and the hall are confident they’ve got plenty of attractions to keep the honeymoon going beyond the first induction ceremony later this year.
With a sleek building designed by the firm of renowned architect I.M. Pei and exhibit designs by Ralph Appelbaum Associates (whose credits include the National Constitution Center in Philadelphia), the hall has left little to chance.
Other features include 1,000 artifacts, a high-tech media center and studios, a retail store and a Buffalo Wild Wings restaurant.
