04/11 2018


The business landscape of the NASCAR Cup Series is set to evolve following the 2019 season.PHOTO BY LAT PHOTOGRAPHIC


Monster will likely be the last traditional title sponsor for the Cup Series



Once again, the winds of change have started to blow in NASCAR.

The sanctioning body announced on Tuesday that it had reached a one-year extension with Monster Energy to serve as the entitlement sponsor for the NASCAR Cup Series through the 2019 season. That means what was originally set to be a two-year partnership with a two-year option will conclude after three years.

The decision to just extend for one additional season was said to be a mutual agreement because NASCAR has plans to revamp its business model over the next several years.

That means it’s unlikely that NASCAR will seek to replace Monster Energy with a new entitlement sponsor. Instead, NASCAR is hoping to bundle official sponsorships with itself, the broadcast partners and the tracks.

The closest comparison is what the Premier League (English soccer) has done over the last three years. Once its deal with Barclays Bank expired in 2016, the league shifted its business model to a series of official partners that included a lead partner, official bank, official ball, etc.

Similarly, there are no title sponsors for the National Football League, Major League Baseball, National Hockey League, etc., and that is what NASCAR hopes to mirror in 2020 and beyond. Moving forward, the highest level of NASCAR could simply be called the Cup Series or Premier Series — the latter of which has become used with regularity by series officials in recent years anyway.

That’s not the only change looming on the horizon: NASCAR’s schedule could undergo an overhaul in conjunction with the new business model.

As it stands, NASCAR inked a five-year sanctioning agreement that is set to expire in 2020, one year after Monster Energy’s departure as the traditional title sponsor of the Cup Series.

So if NASCAR intends to bundle sponsorships that tie across the sanctioning body, current broadcast partners and tracks, the venues that will host races across all three national divisions after 2020 need to be set over the next year or so, too.

There are a handful of tracks that do not currently warrant two dates, and there is an opportunity to replace them with new markets or more action-packed tracks and races. This is a great opportunity for NASCAR to reinvent itself.

Right now, the current entitlement sponsor partnership has the appearance of undercutting the teams because the rumored $20 million a year to sponsor the entire series is cheaper than what it takes to fund a car for the full 38-race campaign.

The new business model likely won’t include teams because it will be impossible to get them to share sponsors when conflicts arise, but it could allow NASCAR, tracks and broadcasts to pull in the same direction, hopefully creating more value as a result.

Just like it’s no longer feasible for a company to simply appear on a stock car to generate value for itself, entitlement sponsors in motorsports are likely an outdated model too.

The challenge here is making sure that NASCAR gets this right — because unlike its constantly evolving playoff format, there will be no mulligans for its new business model.

Any agreement that includes multiple broadcast entities, multiple track-owning conglomerates and several official sponsors will likely be binding for several years. And with the current TV agreement ending after the 2024 season, these are treacherous waters for NASCAR to navigate.

With great opportunity comes great risk.

Let’s see what NASCAR has in mind.