(photo courtesy Leon Hammack)
Wal-Mart’s potential move into NASCAR has led the retail giant deep into negotiations with Hendrick Motorsports over sponsorship of Jeff Gordon’s Hendrick Motorsports #24 Chevrolet next season.
There continues to be several moving parts to the Wal-Mart discussions with Hendrick and NASCAR, which began in the spring and have progressed through the summer. Wal-Mart’s play could have tentacles in both sponsorship and licensing at the team and league level, according to industry sources.
The retailer has been hesitant to spend money on sports sponsorships in the past, so Wal-Mart’s entrance to NASCAR would provide a huge boost to a sport that has been ravaged by the recession and attracted little new sponsorship money in the last two seasons.
“It’s very significant,” said Mark Dyer, senior vice president at IMG and formerly chief of the licensing division at NASCAR until 2007. “We tried for years to get Wal-Mart’s attention when I was at NASCAR and we made some inroads. If they truly decide to take a position in the sport, that’s a big deal to get a company that should have been in that space all along.”
While Wal-Mart ponders a new place in NASCAR, other consumer packaged goods sponsors are clearly energized and they’re not waiting for contracts to be signed before mobilizing.
Sources say that six of NASCAR’s official consumer packaged goods partners met earlier this month to discuss a retail strategy for Wal-Mart. Those sponsors were Coca-Cola, Kraft, Mars, MillerCoors, Procter & Gamble and Unilever.
The opportunities with this are huge,” the source said. “In the past, you could get regional activation with a Wal-Mart close to the track, but they liked to control their national promotions. They typically develop their own programs and then bring in the manufacturers that they choose. But we’re hearing that it could be changing.”
The store’s sponsorship of Gordon would be the most visible bet that Wal-Mart believes an association with NASCAR would help its business. Sources say that Wal-Mart has been seeking ways to reconnect with its core U.S. customers, who compare favorably with the avid fans in NASCAR.
Wal-Mart also has been in discussions with NASCAR’s licensing trust to be the sport’s exclusive retailer in the mass merchandise space. If NASCAR granted Wal-Mart a direct license, it would allow the store to select its merchandise partners and set prices. Those talks have been going on since the spring. (sports business journal)