9 June 2010
NASCAR is Talking to Walmart
Walmart Sponsorship and Licensing Agreement is On the Horizon with NASCAR
Walmart is in deep discussions with NASCAR team and league officials about a wide-ranging deal that has both sponsorship and licensing implications.
Senior-level Walmart executives were guests of NASCAR at the May 22 Sprint All-Star Race in Charlotte and returned this past week to tour race shops and meet more team executives as the mass retailer explores potential partnerships.
While several scenarios are being considered and the talks remain fluid, industry sources say Walmart is discussing the potential of a direct license that would make it NASCAR's exclusive retailer in the mass merchandise space. A direct license would give Walmart the ability to select its suppliers and set prices for certain categories, such as hats and T-shirts.
These negotiations are going on as NASCAR attempts to roll its team and league licensing rights into a trust, which would create a centralized licensing agency for the sport.
Walmart is believed to be exploring sponsorship opportunities with Hendrick Motorsports as well. Hendrick's drivers—Jimmie Johnson, Jeff Gordon, Dale Earnhardt Jr. and Mark Martin—account for close to 75 percent of all licensed sales in the sport, industry analysts say, making it a logical team for Walmart to sponsor.
Landing Walmart, the world's largest retailer, as part of an exclusive mass merchandise deal would be a significant coup for any sports property, especially if it entails a NASCAR store-within-a-store concept.
This sort of hybrid sponsorship/licensing deal is also at the forefront of large deals of recent note, like the recent NFL/Verizon arrangement, which bundled content and sponsorship rights.
Most retailers, particularly Walmart, are loath to spend on sponsorships, so these deals, if completed, could generate major ripples across the industry.
“This should create a feeding frenzy among teams and leagues,” said Darren Marshall, senior vice president of research at sports marketing agency rEvolution. Marshall also suggested that the NFL, in the throes of designing a new licensing program, and the U.S. Olympic Committee would be likely targets if Walmart looks to expand its sports licensing base.
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