Crash.Net NASCAR News

Formation of a NASCAR Properties moving along

9 October 2009

The formation of an industry-wide NASCAR Properties isn't without its obstacles, but most in the sport are optimistic about its future after two organisational meetings at the NASCAR offices in Charlotte.

Most of the Sprint Cup teams were represented at the first meeting last month and at a subsequent meeting Friday to discuss the creation of a centralised licensing agency to represent the sport's teams and drivers.

As independent contractors, teams handle their own licensing, but a NASCAR Properties would unify the industry and theoretically save teams money while making it easier for licensees to do business in the sport.

“What we have is confirmation that this is the right process,” said Paul Brooks, NASCAR's senior vice president and chief of the NASCAR licensing division, which currently owns no rights to any of the teams.

This isn't the first time executives have talked about creating NASCAR Properties to represent the licensing endeavours of the industry, but a combination of factors led teams to these meetings, primarily the bite the recession has taken out of licensed product sales and the poor financial health of Motorsports Authentics, the sport's leading licensee and trackside retailer.

“The first step is getting everyone aligned on what we're trying to build,” Brooks continued. “Right now, when a licensee goes to 12 different teams, there are 12 different agreements, 12 lawyers, 12 different approval processes. You've got accounting, reporting, data collection. Within all of that, there are efficiencies that can be created that allows team owners and everyone to reduce costs.

“We all want to create a system that is better, that makes doing business with the industry easier and in step with what the other leagues do. That's appealing.”

No timeline has been established for the implementation of a centralised entity, but some team executives believe 2011 is a realistic start date, while others believe it can come together more quickly.

The meetings have yet to yield a formal structure or financial model, but Brooks said it will be industry managed and controlled. That could be in the form of a governing board made up of team, track and NASCAR executives from across the sport.

“We haven't yet moved to the mechanics of the financial model or structure. We're still in the philosophical stage of looking at unification versus fragmentation,” added John Bickford, general manager of Hendrick Gordon Licensing, which represents drivers Jeff Gordon, Jimmie Johnson and Mark Martin.

Among the challenges, not surprisingly, are the potential for sponsor conflicts as licensed programmes are assembled and sold. For example, if NASCAR Properties worked out an arrangement for Hershey's to make chocolate bars with the logo of each Sprint Cup car, Joe Gibbs Racing might have to opt out because rival Mars sponsors its #18 car driven by Kyle Busch. If Coca-Cola wants to create commemorative bottles with all 12 Chase drivers, the Pepsi and Gatorade drivers probably wouldn't be available.

With more than 400 sponsors in the sport across teams, tracks and league deals, those conflicts are sure to arise, and how NASCAR Properties navigates those will need to be resolved. But at least, Bickford said, a licensee would be able to go to one entity and find that information, rather than going team to team.

“What we heard very clearly is that, whatever the model is, it has to be sponsor-friendly,” Brooks summed-up. “When you look at the way our sport is structured, it's clear that an industrywide model must benefit the sponsors.

“What we have isn't perfect so far, but there's a real optimism that we've got something here and it's manageable.”

by Michael Smith