How a NASCAR Sponsorship Works


Jimmie Johnson, driver of the #48 Lowe's/Jimmie Johnson Foundation Chevrolet, races against A.J. Allmendinger, driver of the #84 Red Bull Toyota, during the NASCAR Sprint Cup Series Pepsi 500 at Auto Club Speedway on August 31, 2008 in Fontana, Calif. See more NASCAR pictures.
Ronald Martinez/Getty Images

At the track or on TV, it seems that nothing in NASCAR is without a sponsor. Cars are covered in logos and stickers, drivers have patches from shoulder to shoulder and every race is brought to you by one company or another. It stands to reason that sponsors shell out a lot of dough in NASCAR, but how much, exactly? And where does all that money go?

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There are three NASCAR series, and each of them has many, many sponsorship opportunities. As you'll discover when you read the list below, the name of each series is also subject to change -- that's because the series are named after a sponsor, too.

  • Sprint Cup: These are NASCAR's big guns. Sprint Cup races are run on Sunday afternoons, 36 times a year by 40 or more teams and feature the names you're probably familiar with: Dale Earnhardt Jr., Tony Stewart and Jeff Gordon. This series was formerly known as the Winston Cup Series.
  • Nationwide Series: This series races on Saturday and is a step below Sprint Cup in popularity; however, it runs at the same tracks and usually on the same weekends as the Sprint Cup. As a matter of fact, a lot of Sprint Cup drivers got their big break in the Nationwide Series. Until recently, this was called the Busch Grand National Series.
  • Craftsman Truck Series: The often-forgotten, but still exciting, NASCAR truck races also run at the big tracks. This series also draws some big names, including Kyle Busch, among others. Craftsman tools has sponsored this race for years, but the series is slated to get a new sponsor in 2009.

Since Sprint Cup races are by far the most popular in the United States, this article will focus on that series. It is also the most expensive set of races in the country, and the sponsorship dollars reflect that. Having an entire series named after a company or product will cost millions of dollars, which makes sponsoring a single race seem like a deal at only $500,000.

That's right -- being a primary sponsor of a team costs $350,000 to $500,000 per race, although corporations can usually cut a deal to sponsor a team for a full season. That means the sponsor gets to choose the paint scheme of the car, put the logo all over it, and use the driver's likeness in advertising for the product or service they want to promote. It is possible to be the primary sponsor for just one race, and for your half a million-dollar investment, the car will change its appearance for just that one venue.

The cost of everything else -- driver endorsement deals, stickers, cameras and more -- is negotiable. On the next page, we'll tell you what all those logos pay for.

Where does the money go?

Racing fuel is free on race day, but NASCAR teams pay a premium for it during practice and testing on the remaining six days of the week.
Racing fuel is free on race day, but NASCAR teams pay a premium for it during practice and testing on the remaining six days of the week.
Todd Warshaw/Getty Images for NASCAR

One of the biggest expenses any NASCAR team has these days is fuel -- and not just for the race. Every team has to get at least one car and one full pit crew to the race -- plus the driver, the owners, the management, and all the team's racing gear and tools. This requires a couple of large transport trucks that drink diesel fuel for breakfast, lunch, and dinner. Just as an example, if diesel fuel is priced at $4 a gallon, the cost to fill a 300-gallon (1,135-liter) tank is $1,200. That's an expensive stop at the filling station.

Sunoco, another NASCAR sponsor, supplies free gasoline for the race cars on race day; however, those cars get run a lot more often than just one day a week. Teams test their equipment for speed and safety several times during a typical week, sometimes at non-sanctioned tracks, which means they pay for their own race fuel at around $6.25 per gallon (around $1.65 per liter). An all-day test session can burn through a 55-gallon (208-liter) drum, which costs nearly $350.

The driver typically flies from track to track, which is rather expensive, or the driver may take a tour bus, which is almost as expensive as flying. Now, we know what you're thinking, but don't worry about the driver -- he isn't paying for all of this travel out of his own pocket. Like everything else in NASCAR, the driver's income is negotiable. His salary is generally paid for by the sponsor, which gets a certain number of scheduled appearances out of the driver in return. The driver will also split race-day winnings with the team, and there are usually incentives for winning big races -- like the Daytona 500, for example. The driver can also bring in fees for additional appearances or even license his likeness to advertisers. The best drivers -- with the best agents -- can bring in millions each year, like 2008's top earner, Jeff Gordon. In 2008, Gordon garnered $17 million in endorsements and royalties, and $15 million in salary and race winnings, for a total of $32 million.­

Since everything is negotiable, let's talk about all those little logos that cover every surface of a NASCAR race car.

Location, Location, Location

Each sticker represents sponsorship dollars to a NASCAR team -- and there's a lot of real estate available on a NASCAR Sprint Cup Series car.
Each sticker represents sponsorship dollars to a NASCAR team -- and there's a lot of real estate available on a NASCAR Sprint Cup Series car.
John Harrelson/Getty Images for NASCAR

Just as different cuts of meat can vary widely in price, so too can the location of a company's logo on a NASCAR racer. The logo on the hood belongs to the primary sponsor, who also gets to choose the car's paint scheme and the team colors. The rest of it is -- you guessed it -- negotiable.

Associate sponsors are responsible for the fields of stickers that sprawl across the fenders and near the windows. Size and placement influence cost, with the quarter panels being the most expensive place to add a logo. Buying that spot, either right in front of or right behind the rear wheel, for a full season costs $1.5 million.

The area called the C-pillar, which is next to the rear window on both sides of the car, is the next most expensive spot. A logo in that area costs about $500,000 a season. The B-pillar, which is probably easiest to describe as the area right next to the driver's shoulder, is the smallest associate sponsorship possible. Those little stickers cost $200,000 for a full season's placement.

Other logos on the car carry on the "in-kind" tradition, like Craftsman, for example. They provide tools for the teams in return for a nice, big logo on the car.

Though it might not seem so, NASCAR is tightening the restrictions on where logos can be placed and how large they can be. In response, product placements are gaining ground at the track. Drivers are paid to swig non-alcoholic drinks (on camera) in the pits after a race, and crew chiefs are paid to mention sponsors' names in interviews.

There's a reason sponsors fork over so much cash. Up next, an exploration of return on investment.

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Return on Investment

NASCAR sponsors find clever ways to get their company name or logo in front of the fans -- at home and at the track.
NASCAR sponsors find clever ways to get their company name or logo in front of the fans -- at home and at the track.
Stephen Dunn/Getty Images

After approving a tremendous amount of money for a NASCAR Sprint Cup team, wouldn't it be nice if the sponsor got something back -- besides goodwill?

The most obvious result is in the fanbase of over 50 million viewers. That's a lot of potential advertising impressions to make. When calculating the return on their investment, some companies will count the number of seconds their logo is clearly visible on the screen, and then multiply that time by the going ad rate to get an idea of how far their NASCAR dollars are getting them. With a high-profile partnership like Tony Stewart and The Home Depot, for instance, that works out pretty well, especially among NASCAR fans, which have a habit of being loyal to the brands that sponsor their favorite drivers.

But companies also take into account print, billboard, Internet, and other ways their NASCAR team gets in front of consumers. They track consumers' awareness and image of a brand, thanks to their sponsorship of a race team. They'll also do promotions linked to sponsorship to determine if it's getting the brand exposure they want. If more people try a product during a promotion, that's a good return on investment.

Employee morale is another benefit, one that often flies under the radar. Think how happy you would be -- you, the NASCAR fan -- if your company sponsored a winning car. Maybe, if you sold the most widgets or were voted employee of the year, you could get a couple of tickets to a race. Sponsorship is the kind of intangible perk that can attract and retain employees.

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Corporate Sponsorship

If you sponsor a race, you might even be able to talk NASCAR into letting you wave the green flag.
If you sponsor a race, you might even be able to talk NASCAR into letting you wave the green flag.
Jamie Squire/Getty Images

The corporate accounting office is going to want those return on investment numbers -- stat! Everyone else in the company wants a skybox and all-you-can-eat corn dogs. No problem -- just remember, in the world of NASCAR sponsorships, everything is negotiable.

If a company has signed a sponsorship deal with a team, they may be able to negotiate to have Dale Jr. at the corporate picnic. It doesn't get them grandstand tickets or even the right to have a booth at the track. That requires a track-level sponsorship.

Sponsoring a race at the track level means the event is named after your company -- the Coca-Cola 600 at Lowe's Motor Speedway, for example. This will set the company back $500,000 to $2 million, depending on the venue. But the perks are numerous, and, with good negotiating skills, can include:

  • Venue signage
  • Sponsor logos on the tickets and race programs
  • Skybox, VIP tickets, hospitality tent
  • Pace car rides
  • Pit tours and passes
  • Access to drivers' meetings and the Winner's Circle
  • Being the Grand Marshal, waving the green flag, or giving the trophy to the winner
  • Saying "Gentlemen, start your engines!"
  • Unlimited corn dogs could be worked out -- for a price

All right, let's put it all together and see what this would look like if we held the HowStuffWorks 500.

Welcome to the HowStuffWorks 500

Is Atlanta Motor Speedway in Hampton, Ga. the future home of the HowStuffWorks 500? Probably not.
Is Atlanta Motor Speedway in Hampton, Ga. the future home of the HowStuffWorks 500? Probably not.
Chris McGrath/Getty Images

If we were going to hold a HowStuffWorks 500, we're definitely going to do it at the company's home track, Atlanta Motor Speedway. This is a popular venue that has been on the NASCAR circuit since its gates opened in 1960. It sits on the upper end of the track sponsorship price, and will cost at least $1.5 million for a single race. For that price, we don't get to+ use the NASCAR logo on our Web site, but we do get to use the name of the race in any promotions we choose.

Two NASCAR races run in Atlanta in October, the Craftsman Truck Series Georgia 200 and the Sprint Cup Series Pep Boys Auto 500. Let's say we displace those sponsors and make these two events our own. We may even get a discount for sponsoring both.

The races we're sponsoring are late in the season and part of the Chase for the Cup -- that's when the top 12 drivers vie for the championship during the last 10 races of the season. It will bump the price of track sponsorship up closer to $2 million, but casual fans as well as die-hards tune in for the Chase action, which means more potential customers adding to our return on investment.

Over the years, the speedway has undergone several expansions. It now seats 124,000, plus 138 luxury suites. The spring Sprint Cup races held in Atlanta in 2008 earned a 5.6 Nielsen Rating, which translates to more than 4 million households potentially hearing "We'll be right back with more of the HowStuffWorks 500" before every commercial.

As part of the deal, we negotiated for a skybox with food and beverages, plus the HowStuffWorks logo on the tickets and programs. Since we aren't team sponsors, we can root for anyone we want -- we don't even have to agree on which driver we like.

For more information about NASCAR and other NASCAR-related topics, follow the links on the next page.

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Sources

  • An email interview with Bob Abdellah, Vice President of Global Communications, Just Marketing International. (August 21, 2008)
  • An interview with Brian K. Evans, Director of Client Relations at Verve Sponsorship Group. (August 19, 2008)
  • Atlanta Motor Speedway. (August 21, 2008) http://www.atlantarace.com/
  • Associated Press. "Stop your engines." Chicago Sun Times. July 12, 2008. (August 21, 2008) http://www.suntimes.com/news/politics/obama/1052699,CST-NWS-race12.article
  • Ballparks. "Atlanta Motor Speedway." June 12, 2001. (August 21, 2008) http://racing.ballparks.com/Atlanta/index.htm
  • Hall-Geisler, Kristen. "NASCAR Pays a Whopping $6.25 a Gallon for Gas." RiverWired. May 12, 2008. (August 21, 2008) http://www.riverwired.com/blog/nascar-pays-whopping-625-gallon-gas
  • Modestino, Lou. "TV Times - Atlanta Sprint Cup Race Viewer Ratings Up Over 19 Percent." MotorSportsNews.net. March 18, 2008. (August 21, 2008) http://motorsportsnews.net/archives/1148
  • NASCAR.com. (August 21, 2008) http://www.nascar.com/
  • Neil, Dan. "Obama goes NASCAR? Not so fast …" Los Angeles Times. July 12, 2008. (August 21, 2008) http://latimesblogs.latimes.com/uptospeed/2008/07/obama-goes-na-1.html
  • Schwartz, Peter J. "NASCAR's Highest-Earning Drivers." Forbes.com. June 11, 2008. (August 21, 2008) http://www.forbes.com/sportsbusiness/2008/06/11/top-earning-nascar-biz- cz_ps_0611topearningdrivers.html