Subject: [NEXTEL-1] NASCAR Cancels Planned Nextel News Conference

From: [email-masked]
Date: Mon, 07 Jul 2003 02:14:04 -0400

7/7/03

NASCAR Cancels Planned Nextel News Conference

NASCAR's Nextel ($750 million) sponsorship facing some serious
challenges.Graceful, it ain't. The transition from RJR to Nextel may
not be going all that smoothly.

Problems have arisen from NASCAR's surprising rush to
sign a new tour sponsor, raising questions about why NASCAR execs
were so eager to sign something so quickly, even before pinning down
such obvious loose ends as AT&T. Maybe that's why NASCAR
canceled the planned Nextel news conference here, to avoid awkward
questions. That and this report from The Winston Salem-Journal's Mike
Mulhern

'Never underestimate the power of greed,' a Winston Cup team
owner said.

Those within NASCAR who can't seem to push RJR out the back door
fast enough may soon rue the loss of Reynolds' 'safety net.' And
depending on how swiftly and amicably NASCAR resolves the AT&T
situation, stock-car racing officials might have trouble even getting a dial
tone on their land lines. The world doesn't yet run by wireless alone.

NASCAR sometimes has a difficult job simply dealing with things it
knows how to do - the yellow-line rule, the yellow-flag rule are
examples. Toyota will certainly create problems on the competition side
(although a branch inside NASCAR's headquarters relishes publicity
generated by such controversy). Now NASCAR is trying to make the
transition from 'Winston Cup Series' to 'Nextel Series,'' and it may be a
bit trickier than just changing color schemes and decals.

It isn't unusual for NASCAR to find itself in jams such as this, though this
one is larger than usual. But to get in trouble so quickly has some people
wondering who is in charge of this train.

Nextel may be signed as NASCAR's new series sponsor, but AT&T
executives are upset at NASCAR's attempts to limit their involvement in
the stock-car racing tour and they are ratcheting up the pressure.

'This thing could heat up very rapidly,' according to AT&T people,
saying the word has come from 'the very top' that the company wants to
play a prominent role in Winston Cup racing, and not necessarily under
the restrictions NASCAR and Nextel want to lay down.

NASCAR officials seemed stunned at Sonoma when AT&T refused to
go quietly into the night. Early in the sponsorship sweepstakes,
NASCAR asked AT&T if it were interested in buying the series for $90
million a year, according to NASCAR sources, but the telephone giant
declined.

Then NASCAR made the Nextel deal and listed the new 'nos' to AT&T,
and AT&T officials balked. There's nothing like saying 'No' to the boss
of one of the nation's biggest companies to make him hot.

AT&T had been taking for granted its spot in the Winston Cup garage,
but NASCAR has pushed the company into a more aggressively stance
... making for an interesting game of high-stakes business poker.

Caught in the middle of all this are Beth Ann Morgenthau and her
husband, Tony, who run BAM Racing, with Kenny Schrader
driving. The Morgenthau's have one of the smallest teams in the sport,
and no major sponsorship, although it still takes about $10 million a
season to run even a modest operation. The Morgenthaus, from South
Florida, have been paying for things mostly out of their own pockets,
while trying to sign a major corporate sponsor.

AT&T has been a partial sponsor on the Morgenthau's car this season,
with a contract saying AT&T can take the full quarterpanel anytime.
NASCAR said it has 'grandfathered' in Cingular Wireless for Richard
Childress and Alltel for Roger Penske, under the Nextel deal, with
those two teams allowed to keep pitching their services and products.
But NASCAR has balked at grandfathering in AT&T with the same
sponsorship rights as Cingular and Alltel.

Now NASCAR must protect itself against the image of giving preferential
treatment to giants Childress and Penske while pushing around the
Morgenthaus.

At Sonoma, NASCAR took a strong position on AT&T. Now
NASCAR officials appear to be taking a more conciliatory position,
nervously hoping to keep all of this low key until it can be sorted out.

The Morgenthaus' contract with AT&T runs through the end of the
season, and the two sides are negotiating a contract. But before AT&T
signs anything, it wants a number of issues clarified with NASCAR
concerning what the company will be allowed to do at the tracks with its
marketing programs and with its paint schemes. In turn, NASCAR wants
to know how AT&T wants to paint and market its cars.

One of NASCAR's concerns is the AT&T blue globe. AT&T wants to
use the globe on the cars and in its promotions. It is the company logo.
But NASCAR and Nextel don't like that.

Another concern is that NASCAR and Nextel don't want AT&T to have
any 'at-track presence,' that is, no marketing booths, such as both
Cingular and Alltel have.

The Morgenthaus don't dare risk offending NASCAR by getting too
aggressive in this fight, knowing that might hurt them in the pre-race
inspection line. It's hard to win Sunday's race if your car is still in the
NASCAR inspection bay on Monday.

But the Morgenthaus now have a shot at landing AT&T as a major
sponsor, a $10 million to $15 million hand they can't afford not to play.
And the Morgenthaus could be holding the right hand at the right
moment. NASCAR's heavy-duty attorneys, Dubois and company, are
busy with the Francis Ferko lawsuit, and executives are bracing for
depositions in that monopoly case. The Simpson situation is still
fermenting. Then there's the Dodge-Davis legal debate.

So the AT&T bottleneck is just one more sticky legal situation for
NASCAR - a situation Bill France Jr. once would have been able to
handle himself on his own, man to man, without all the attorneys. And it
may be just one more indication that NASCAR has grown so big that the
old rules just don't work any more. That and this report from The
Winston Salem-Journal's Mike Mulhern

http://www.sportsbusinessnews.com/index.asp?story_id=27801

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