NASCAR and Monster Energy announced a one year extension to their deal for the energy drink to remain the entitlement sponsor of the Cup Series through 2019 The news comes after months of Monster Energy hinting at exorcising their two year option and ending the partnership after the 2018 season, but were convinced by NASCAR to sign on for one more year.
“NASCAR and Monster Energy enjoyed a productive first year and both parties have benefited significantly from the partnership,” said Steve Phelps, NASCAR chief operating officer, said in a NASCAR news release. “Monster Energy successfully utilized our sport as a platform to elevate its brand and drive business, while introducing NASCAR to new audiences. With this renewal, we look forward to building upon our early success.”
While some may see that as good news, especially with the mass exodus of fans and sponsors over the last couple of years, NASCAR officials also announced in a statement that Monster Energy would not be sponsoring them past 2019. Not only does that news leave NASCAR looking for another entitlement sponsor in another year, its also their third new sponsor in 14 years.
NASCAR Chief Executive officer, Steve Phelps announced on Tuesday that it would be ,”highly unlikely that Monster Energy sponsors NASCAR past 2019 and that he wanted to make sure that NASCAR was an easier sport to do business with in the future. Phelps also claimed that he was interested in creating a marketing model that made companies want to stay involved with them.
“I wouldn’t suggest that the entitlement is not working, but we want to make sure our sport is as easy or easier to do business with,” Phelps said. “Our competitive advantage is that our fans understand the importance of sponsorship and they go out and support our sponsors. … We just think this is a better model to be able to make sure that sponsors want to stay involved more broadly.”We feel there is an opportunity to feel more invested in the sport — and I’m not just talking financially and what they’re paying different entities, but more invested in the sport so they will then turn around and do more activation and feel like this position is an ownership position that they have.”
With that being said, the financial side of the deal between NASCAR and Monster Energy hasn’t been worked out yet, but some are speculating that the sport will receive around the same ballpark number they did for the first two years. Monster Energy paid NASCAR between 20 and 25 million, which is a huge dip from what Sprint used to pay NASCAR to be the title sponsor
In fact, Sprint, who served as NASCAR’s entitlement sponsor from 2004-2016, paid the sport between 50 and 75 million dollars a year during their partnership and Sprint even took an active role in promoting NASCAR to its audiences. Unfortunately for NASCAR now, Monster Energy has been less willing to do so and it could be one of the reasons the partnership isn’t doing well.
What are your thoughts? Did NASCAR made the right choice? Will Monster Energy surprise us all and continue the sponsorship past the 2019 season? Let us know in the comments below!