Is NASCAR failing its biggest sponsor?
What it all might mean for NASCAR’s Nextel Cup soon-to-be-titled Sprint Cup series is unclear: The Carlyle Cup?
Well, the Nextel Sprint merger has been rocky, to say the least. First, all the Nextel guys who put together the NASCAR deal abruptly left the company. Then just a few weeks ago Forsee got the boot, too, amid questions about the company’s direction.
These are big-money stakes.
Still, a deal of some sort could get footing. Particularly in light of Sprint Nextel’s precipitous third-quarter net-income decline, announced yesterday. And the company issues a warning about the fourth quarter too.
Sprint Nextel, which is the nation’s third-biggest wireless operator, reported net income of $64 million for the quarter, compared to $279 million last year. Revenues also dropped slightly to $10 billion.
And noteworthy with regard to the Carlyle angle: James Hance Jr., who is Sprint Nextel’s interim chairman, is a senior adviser to the Carlyle Group. Carlyle men Daniel Akerson, Bill Conway and Bill Kennard also have had ties with Nextel. Winston Salem Journal
10/11/07 After spending $1.78 billion on advertising this year (including $70 million from the 10-year, $700 million deal to sponsor NASCAR signed in 2004), Sprint is losing customers at a prodigious rate (as was Nextel before the merger, indicating their NASCAR sponsorship is reaping negative returns). Over the just-completed third quarter Sprint lost 340,000 "postpaid" wireless customers (people who pay a monthly bill), which is a stunning number.
The bottom line in this situation is that if Sprint's fortunes continue trending downward, everything in that company will come under scrutiny. And yes, that means that the NASCAR title sponsorship deal will be high on the list of "involvements" that will come under review. Sprint is not only spending $70 million annually for the "privilege" of being NASCAR's title sponsor, it is spending another huge chunk of change (running into the millions) on promoting its NASCAR involvement. And if things keep going south for Sprint, it's easy to see how that NASCAR sponsorship deal will become a big fat target when the discussion turns to cutting expenses.
Don't be surprised if the next move made by Sprint is to craft an exit strategy – right out of NASCAR. Autoextremist.com
10/09/07 Many NASCAR companies, including Dodge, Chevy and Ford are in deep trouble financially and there is no indication their NASCAR sponsorship is helping them. Add Sprint Nextel to that list.
Sprint Nextel Corp (S.N) Chief Executive Gary Forsee stepped down on Monday as the company lowered its annual outlook, bowing to investor pressure amid heavy customer losses.
The move came after an activist investor last week demanded change and media reports said Sprint's board was quietly looking for a new leader.
"This is a major positive catalyst for Sprint. It's good to know the board isn't asleep at the wheel," said Patrick Comack, an analyst at Zachary Investment Research.
Sprint, which has struggled to position itself against bigger rivals AT&T Inc and Verizon Wireless, said its board believed it was time to "put in place new leadership to move the company forward in improving its performance."
Amid falling TV ratings and empty grandstand seats, many sponsors are starting to second guess their NASCAR involvement, with some having already axed their involvement.