Understanding the Mechanics of NASCAR Sponsorships

Whether you're at the racetrack or watching from home, it's clear that sponsorships are everywhere in NASCAR. Vehicles are adorned with logos, drivers wear branded patches, and every event is sponsored by various companies. Naturally, sponsors invest heavily in NASCAR, but what are the exact figures? And how is this money utilized?

NASCAR Image Collection

NASCAR features three main series, each offering numerous sponsorship opportunities. As you'll see in the list below, the names of these series can change frequently, as they are often tied to the sponsoring company.

Given the Sprint Cup's status as the most popular series in the U.S., this article will concentrate on it. It's also the most costly racing series in the country, with sponsorship costs to match. Naming rights for an entire series can run into millions, making the $500,000 price tag for sponsoring a single race seem modest.

Indeed, becoming a primary sponsor for a team costs between $350,000 and $500,000 per race, though companies often negotiate season-long deals. This sponsorship allows the company to design the car's paint scheme, display their logo prominently, and use the driver's image in promotional campaigns. Sponsoring a single race is also an option, with the car's appearance customized for that event.

Other expenses, such as driver endorsements, stickers, cameras, and more, are subject to negotiation. On the following page, we'll explore what these sponsorships fund.

Where does the money go?

Fuel represents one of the largest expenses for NASCAR teams today, extending beyond race day. Each team must transport at least one car, a full pit crew, the driver, owners, management, and all necessary equipment to the race. This requires multiple large transport trucks that consume diesel fuel extensively. For instance, at $4 per gallon, filling a 300-gallon (1,135-liter) tank costs $1,200, making it a costly endeavor.

Sunoco, a NASCAR sponsor, provides free gasoline for race cars on race day. However, cars are used more frequently than just on race days. Teams conduct speed and safety tests multiple times a week, often at non-sanctioned tracks, requiring them to purchase race fuel at approximately $6.25 per gallon (around $1.65 per liter). A full-day test session can consume a 55-gallon (208-liter) drum, costing nearly $350.

Drivers typically travel between tracks by air, which is expensive, or by tour bus, which is similarly costly. Rest assured, drivers do not cover these expenses personally. Like other aspects of NASCAR, the driver's income is negotiable. Sponsors typically cover the driver's salary in exchange for a set number of appearances. Drivers also share race-day winnings with their teams and earn bonuses for major victories, such as the Daytona 500. Additional income comes from appearances and licensing their likeness for advertising. Top drivers, like Jeff Gordon in 2008, can earn millions annually through endorsements, royalties, salaries, and race winnings. In 2008, Gordon earned $32 million, including $17 million from endorsements and $15 million from salary and winnings.

Given that everything is open to negotiation, let’s delve into the significance of the numerous logos adorning every inch of a NASCAR race car.

Location, Location, Location

Similar to how different cuts of meat vary in price, the placement of a company’s logo on a NASCAR car also carries different values. The hood logo is reserved for the primary sponsor, who also dictates the car’s paint scheme and team colors. The remaining spaces are, as expected, open to negotiation.

Associate sponsors cover the array of stickers spread across the fenders and near the windows. The cost varies based on size and placement, with the quarter panels being the priciest location for a logo. Securing this spot, either in front of or behind the rear wheel, for an entire season costs $1.5 million.

The C-pillar, located next to the rear window on both sides of the car, is the second most expensive area. A logo here costs around $500,000 per season. The B-pillar, best described as the space near the driver's shoulder, offers the smallest associate sponsorship opportunity, with stickers priced at $200,000 for a full season.

Other logos on the car continue the "in-kind" tradition, such as Craftsman, which supplies tools to teams in exchange for prominent branding on the vehicle.

Despite appearances, NASCAR is imposing stricter rules on logo placement and size. As a result, product placements are becoming more prevalent at the track. Drivers are compensated for drinking non-alcoholic beverages (on camera) post-race, and crew chiefs are paid to mention sponsors during interviews.

Sponsors invest heavily for a reason. Next, we’ll explore the return on investment they receive.

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Return on Investment

After investing a significant sum in a NASCAR Sprint Cup team, sponsors naturally expect more than just goodwill in return.

The most immediate benefit is access to a fanbase exceeding 50 million viewers, offering vast advertising potential. Companies often measure ROI by calculating the screen time their logo receives during broadcasts, multiplying it by standard ad rates to gauge the value of their investment. High-profile partnerships, such as Tony Stewart and The Home Depot, yield significant returns, particularly among NASCAR fans, who tend to remain loyal to brands supporting their favorite drivers.

Beyond TV exposure, companies also evaluate print ads, billboards, online presence, and other avenues where their NASCAR team gains visibility. They monitor brand awareness and consumer perception resulting from their sponsorship. Promotions tied to the sponsorship help assess whether the desired brand exposure is achieved. Increased product trials during these campaigns indicate a strong return on investment.

Employee morale is an often-overlooked benefit. Imagine the excitement of a NASCAR fan whose employer sponsors a winning car. Top-performing employees might even earn race tickets as rewards. Such intangible perks can enhance employee satisfaction and retention.

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Corporate Sponsorship

The corporate finance team will demand ROI figures immediately, while others in the company dream of skybox access and unlimited corn dogs. Fortunately, in NASCAR sponsorships, everything is open to negotiation.

A company with a team sponsorship deal might negotiate to have Dale Jr. attend their corporate picnic. However, this doesn’t include grandstand tickets or a booth at the track, which require a separate track-level sponsorship.

Sponsoring a race at the track level means the event bears your company’s name, like the Coca-Cola 600 at Lowe's Motor Speedway. This costs between $500,000 and $2 million, depending on the venue, but comes with numerous perks, especially with skilled negotiation.

Now, let’s combine everything and envision what the Mytour 500 would look like.

Welcome to the Mytour 500

If we were to host the Mytour 500, it would undoubtedly take place at our home track, Atlanta Motor Speedway. This iconic venue has been a staple on the NASCAR circuit since 1960. While it’s on the higher end of track sponsorship costs, starting at $1.5 million per race, we gain the right to use the race name in our promotions, though the NASCAR logo remains off-limits for our website.

Atlanta hosts two NASCAR races in October: the Craftsman Truck Series Georgia 200 and the Sprint Cup Series Pep Boys Auto 500. By taking over these sponsorships, we could potentially secure a discount for sponsoring both events.

These races occur late in the season as part of the Chase for the Cup, where the top 12 drivers compete for the championship. This timing increases track sponsorship costs to nearly $2 million but also attracts both casual and dedicated fans, boosting our potential ROI.

The speedway has expanded over the years and now accommodates 124,000 spectators and 138 luxury suites. The 2008 spring Sprint Cup races in Atlanta achieved a 5.6 Nielsen Rating, reaching over 4 million households with announcements like, "We'll be right back with more of the Mytour 500" before each commercial.

As part of our sponsorship deal, we secured a skybox with food and beverages, along with the Mytour logo on tickets and programs. Since we’re not tied to a specific team, we’re free to cheer for any driver we choose—no need to agree on a favorite.