Xfinity Nearing $100M Deal For Title Sponsorship Of NASCAR’s Nationwide Series (3rd Update)
08/28/14 Comcast and NASCAR plan to announce a 10-year sponsorship agreement next week that will turn the sport’s secondary circuit into the Xfinity Series report Tripp Mickle of SportsBusiness Daily.
The deal, which is valued at close to $200M, is expected to be announced on Wednesday in Charlotte, according to sources. Comcast and NASCAR both declined to comment. The announcement follows several months of negotiations and represents a major achievement for NASCAR.
The sanctioning body began looking for a title sponsor late last year after current sponsor Nationwide Insurance decided to discontinue its sponsorship. Comcast emerged as a viable replacement after the company’s sports TV group, NBC, signed a 10-year, $4.4B rights deal with NASCAR. As part of the deal, Comcast agreed to spend $10M marketing and promoting the sport.
Its marketing team saw title sponsorship of NASCAR’s secondary series as a way to fulfill that obligation and also promote its cable TV, broadband and phone business unit, Xfinity. Comcast initially wanted a shorter-term deal and resisted NASCAR’s push for a 10-year agreement.
However, in recent weeks, it decided to commit to 10 years to match the length of NBC's broadcast deal. NASCAR was asking for $12-15M a year in rights fees, with media and activation commitments that would take the total value of a deal to more than $25M.
A deal of that size would have been an increase from the approximately $10M in rights fees Nationwide spent for title sponsorship of the series. NASCAR was unable to find a replacement partner willing to pay more for a series that had seen its average TV viewership per race fall from 2.06 million in '08, when Nationwide started its sponsorship to 1.7 million this season. Comcast approved a rights fee in '15 of approximately $9M, with media and activation commitments that would take the total spend to more than $18M.
The company’s ability to make the deal work will depend on the size of Xfinity's national footprint. Xfinity currently operates in 40 states and provides cable and broadband services in several U.S. cities with NASCAR tracks nearby: Atlanta, Miami, Chicago and Detroit. But Comcast is waiting for regulatory approval of a $45B merger with Time Warner Cable, and that merger would expand Xfinity's footprint into traditional NASCAR areas such as Texas and the Carolinas.
NASCAR Chief Sales Officer Jim O'Connell spearheaded the sale. Comcast Senior Dir of Sports Brand Strategy Matt Lederer and Senior VP/Marketing Communications Peter Intermaggio led Xfinity's negotiations. GMR Marketing serves as Xfinity's sponsorship consulting and activation agency. Tripp Mickle/Sportsbusinessdaily.com
08/19/14 So it seems NBC/Comcast/Xfinity will get the NASCAR Nationwide title sponsorship for free. That's right, free. Comcast owned NBC, committed to spending as much as $10 million a year on NASCAR promotion when it won the TV rights deal. Sources familiar with Comcast's negotiations for the Nationwide Series title deal say the company can count title sponsorship of an Xfinity-backed series toward its NBC marketing commitment. So in essence NBC gets a free ride and all the benefits of title sponsorship for one of its companies without spending a dime more than they already committed to years ago. If Nationwide stayed on NASCAR would have gotten the Nationwide money plus NBC would also be spending $10 million on promotion. NASCAR's loss, not NBC's.
08/18/14 Comcast's Xfinity service is "considering a five- to six-year deal" valued at more than $100M to title sponsor NASCAR's second-level series, according to a source cited by Tripp Mickle of SPORTSBUSINESS JOURNAL. The potential agreement would see Comcast pay approximately $9M in rights fees and $9M in media and activation "in its first year as title sponsor."
Its annual spend "would increase in subsequent years." Fox and Comcast-owned NBC are "slated to split television rights to the series" from '15-24. Sources said that Fox "wants assurances that Comcast will spend equally on advertising across both of the series’ rights holders … and not favor its own company, NBC."
Mickle reports the deal "should close and be announced in the coming weeks," provided other category issues are "resolved." The deal would "represent an increase" from the approximately $10M in rights fees Nationwide "spent for its title sponsorship of the series."
Sources said that the deal "was driven at Comcast" by Senior Dir of Sports Brand Strategy Matt Lederer. He worked at Nextel when the company signed its deal in '03 to become title sponsor of the NASCAR Cup Series and "was familiar with the benefits of a NASCAR title sponsorship."
Xfinity’s NASCAR deal "would be the first national sports sponsorship Comcast has signed for its cable, broadband and phone division" SPORTSBUSINESS JOURNAL