Subject: [NEXTEL-1] NASCAR's 'partial exclusivity' grant to Nextel, with Cingular Wireless and Alltel grandfathered in, possibly illegal.

From: [email-masked]
Date: Thu, 24 Jul 2003 17:33:27 -0400

July 24, 2003

NASCAR, Nextel a lot of potential troubles on the horizon Jimmy Spencer, whose war
cry is 'you mess with the bull, you get the horns,' is about to get a little
tougher - something to give his rivals a shiver. That and this report from The
Winston Salem-Journal's Mike Mulhern Sirius, a satellite radio system, yesterday
became the latest NASCAR sponsor to call it quits, leaving Spencer and car owner
Jim Smith scrambling for one of those $10 million to $18 million deals it takes to
operate a top Winston Cup team.

So Smith joins Jack Roush, Teresa Earnhardt and Rick Hendrick in the sponsorship
market, quite a chilly place this summer.
And that adds more twists to the AT&T-Nextel debate. AT&T corporate officials are
meeting this week to study the NASCAR land-scape and decide what they might want
to do next season in terms of sponsorship on the Winston/Nextel Cup tour.

And, the Winston-Salem Journal learned yesterday, Verizon and AT&T Wireless aren't
giving up hope of playing the stock-car racing game, too, despite Nextel's
apparent exclusivity arrangement with NASCAR. It is not clear if any legal
challenges might be forthcoming, but some industry sources consider NASCAR's
'partial exclusivity' grant to Nextel, with Cingular Wireless and Alltel
grandfathered in, possibly illegal.

The next move on the AT&T-Nextel front may come from Fox and NBC, because the
networks may not be interested in giving up potential ad sales to AT&T, even with
Nextel coming in to pay perhaps $1 million a race for on-air mentions. The
nation's six wireless companies spend about $3 billion a year on advertising.
Sources say that NBC is hot to get some of that money.

One key question: Will NASCAR tell Fox and NBC that they cannot sell ads to
Nextel's wireless competitors? Even with Goodyear's exclusivity with NASCAR,
Mich-elin ads were prominent at Darlington. That and this report from The Winston
Salem-Journal's Mike Mulhern

There are a number of curious points on the NASCAR-Nextel front:

• AT&T Wireless, which is a separate company, wants a deal with Jeff Gordon.
However, NASCAR insists that no driver next year will be able to market for a
Nextel rival. Kyle Petty, who has an existing contract with Sprint, says he is
unsure how all that might work out.

• Comcast, which picked up all the NASCAR contracts from AT&T's Broadband division
when it bought that company earlier this year, has sponsorship deals with Matt
Kenseth, Jeff Burton and, according to sources, Gordon. It is unclear how NASCAR
might try to limit marketing of those sponsorships.

• AT&T officials have not only talked with Ty Norris and Jack Roush about a full
Winston Cup sponsorship next year but also with Chip Ganassi.

• AT&T sources say that NASCAR never offered the Winston Cup series sponsorship to
AT& --T.

• One NASCAR sports-marketing agent, who asked not to be named, calls it 'strange'
that NASCAR would try to block its drivers from tapping into one of the most
lucrative areas of U.S. marketing without offering specific compensation.

• Verizon, according to sources, is considering a major Busch tour sponsorship,
but it appears that Verizon will be barred from marketing with any Winston Cup
driver who happens to run a Busch race. It is not clear if Verizon might challenge
that.

• Three of the sport's biggest owners, Roush, Hendrick and DEI, are all looking
for primary sponsors for next season, for cars being driven this season by Burton,
Joe Nemechek (if UAW drops it sponsorship, as sources indicate it will) and Jeff
Green.

Some wireless companies are still ready to sign full sponsorship deals and are
just waiting to see how hard the teams push the interpretations that NASCAR is
providing. Winston Cup owners are notoriously frightened of bucking NASCAR.
However the current economic climate might make them increasingly desperate - a
top Winston Cup sponsorship is $18 million a year. The least expensive major
Winston Cup sponsorship is $10 million.

• Visa's hopes of becoming the NASCAR series sponsor were doomed by a company
policy that precludes any deals longer than five years, and NASCAR insisted on a
10-year contract.

Meanwhile team owner Beth Ann Morgenthau is still trying to piece together an AT&T
deal for next year, despite NASCAR's vigorous resistance.

'There are a lot of ups and downs with auto racing,' she said. 'I knew that before
we first became involved. But it's difficult to fully appreciate unless you are
right in the middle of it. The last few weeks have been obviously intense ones for
our race team.'
That and this report from The Winston Salem-Journal's Mike Mulhern

http://www.sportsbusinessnews.com/index.asp?story_id=28392

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