The president of M&M’s parent company Mars Wrigley, Anton Vincent, talked about the company evolving, becoming “consumer obsessed,” and the need to focus on “consumer interest and other passion points.”
“There’s a bit of a shift in our sports marketing strategy,” Vincent told Forbes.com earlier this year. “Our consumer base is very distributive.”
You follow? OK, then allow me to translate: Kyle Busch’s brilliant NASCAR career is in a holding pattern.
“You never anticipate being in this predicament,” Busch said in a Tuesday phone chat.
After 15 years as primary sponsor of Busch’s Cup Series cars, M&M’s is gone after this year. A relationship that long is highly uncommon in NASCAR, but eventual breakups happen.
There’s little doubt Kyle Busch will be in a quality car next year and beyond. But it might not be the familiar No. 18 Toyota owned by Joe Gibbs — Busch says he’d prefer to stay where he’s won two championships and truckloads of trophies, and Gibbs obviously wants to keep him.
In any of the other familiar sports leagues, that would basically seal the deal. Kyle and Joe would keep motoring along together.
But big-league auto racing is a very different vehicle. And this particular high-profile development, which reminds everyone how dependent top teams are on corporate partnerships, can hopefully help everyone decide there has to be a better way.
“In other sports, a team doesn’t lose a sponsor and then have to give up its top talent,” Busch said. “Definitely, the business model can stand some help. And I know there are some team owners who have come into our sport recently, and they’re really fighting for that, trying to help that model be better.
“Obviously it’s tough to find that unicorn style of replacement sponsor — someone who spends the $15-to-$25 million in our sport in just a 12-month period.”
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Split decision coming for NASCAR & teams
NASCAR’s business model upgraded its wardrobe beginning in 2001, when the first network TV deal kicked in. Prior to that, tracks worked their own individual deals with a variety of networks and cable entities. For the past 21 years, the wall-to-wall deal has generally included two networks splitting the season — right now it’s Fox and NBC.
The 10-year deal, good for 2015 through 2024, is reportedly worth a combined $8.2 billion. Where does it all go?
Not sure where or how it’s all spent, but the front-end division has been the same all along: 10% goes to NASCAR, 25% goes to the 36 chartered race teams (through undisclosed race purses), and 65% goes to the individual speedways (NASCAR, by the way, owns 11 tracks that are hosts to 18 races on the current 36-race schedule).
There’s been recent talk about that split changing with the next TV deal, which will start with the 2025 season.
“How far it gets, I don’t know,” Busch said this week.
Since the last TV deal was signed, a handful of new owners have entered the garages, and some have been in other sports and bring a varying degree of thoughts and ideas. Also in the past several years, the Race Team Alliance — originally formed in 2014 — has grown in collective muscle. Some things will remain beyond the teams’ control, however.
It’s a bit odd, looking from the outside. With each new NASCAR network contract, the dollar figures grow, and not by just a little. Media coverage has expanded and taken some new forms. Yet in the two-plus decades since the first network deal was negotiated and then implemented, the biggest corporate team sponsors have exited.
Giving up that exposure doesn’t seem logical, but insiders point to the growing segments of the sports-entertainment industry and the wide range of options now confronting CEOs and their chief marketing officers.
“It’s been unfortunate . . . the landscape of NASCAR,” Busch said. “They boomed huge in the ’90s. If you weren’t in NASCAR, you weren’t a big enough brand, you weren’t cool enough. There were sponsors in our sport who were making money by being here. Their bottom line . . . it was making them money being in NASCAR.
“The CEO or the CMO wanted to make a change and didn’t want to do it anymore, and they’re gone. The Targets of the world, the Dollar Generals, UPS, Lowe’s, Home Depot, you name it. They were here, doing a good job of making money, and now they’re not here.”
And now, Mars and its M&M’s brand are also pointed toward the exit ramp. Left scrambling is a top-tier race team and a driver, Kyle Busch, winner of 60 career Cup races, two championships, and at 37 still at the top of his game.
Is there a fix for NASCAR?
It screams for a structural fix, but it’s not so easy. Other sports do it with salary caps — some are tighter than others. Also, for example, along with the Miami Dolphins’ cut of the NFL’s media revenue, as well as their share of merchandise sales and assorted sponsorships, they sell tens of thousands of tickets and high-end suite packages at home games.
A big-league race team could run the season with just the money it gets from the TV cut, but it would be a shoestring operation compared to all others. The additional sponsorship dough is used, most importantly, to lure and pay the best talent — drivers, crew, engineers — and buy the best equipment available to help make their cars faster.
“Cubic dollars” is the age-old term for money equals horsepower.
They can increase the teams’ cut of TV money. Maybe even pay out enough money for a team to run an entire season with enough talent in the cockpit and race shop to run fast. But racers don’t just want fast, they want faster, so they’d still beat the bushes for additional funding to facilitate that desire.
The only way they could combat that, and to possibly bring some balance and sanity to it all, would be to institute a spending cap.
That’s a whole other kettle of fish for another day.
This article originally appeared on The Daytona Beach News-Journal: Kyle Busch finds NASCAR future on shaky ground after M&M’s leaves