Which product
will Dale Jr. sell?

Move to new team ends run with Budweiser

JEFFERSON GEORGE, jgeorge@charlotteobserver.com

Tuesday, Jul. 24, 2007

As Dale Earnhardt Jr. fans wait to see which brand name will be on the hood for NASCAR's most popular driver next year, one thing is certain, sports marketers say: Junior's new deal will be the richest in NASCAR history.

Beyond a potential $25 million payday, the big question is how fans will respond to Earnhardt's break from Budweiser, and how it will affect his marketing prowess.

Switching sponsors disrupts a longtime partnership that fans embraced, but it could give Earnhardt an opportunity to expand his already unparalleled reach to new audiences.

No driver commands as large a piece of merchandise sales, and few are as closely linked to a company as Earnhardt is to Bud, his primary sponsor since he was a rookie in 1999. That makes his switch uncharted territory, say marketing executives who work with racing teams, sponsors and others in the motorsports industry.

"There's never been a driver as big as Dale Earnhardt Jr. currently is," said Mike Bartelli, a Charlotte-based senior vice president of Millsport Motorsports, "because NASCAR has never been bigger than it is."

While top drivers have changed sponsors before, most moves happened in the 1980s and '90s, before NASCAR's popularity mushroomed, said Mike Boykin, vice president of GMR Marketing.

"That was a different era," said Boykin, whose office is in Charlotte. "The investment levels were a fraction of what they are today."

Earnhardt announced in June that he would leave Dale Earnhardt Inc., the team started by his father, next season to join Hendrick Motorsports. This month, Hendrick announced that Budweiser wouldn't be Earnhardt's sponsor in 2008 because the team already has other sponsors.

Hendrick and Earnhardt have been silent since then, and there has been no indication of when a new sponsor will be announced. Even so, who will replace Bud remains a hot topic in NASCAR circles.

The driver Earnhardt is replacing, Kyle Busch, drives the Kellogg's and Carquest Auto Parts cars. Speculation in some media reports has centered on a Pepsi product or a combination of products as Earnhardt's next sponsor.

Pepsi already has a contract with Hendrick and has sponsored Jeff Gordon for 10 years, said Michelle Naughton, a spokeswoman for Pepsi-Cola North America. Pepsi officials won't comment on speculation about the company sponsoring Earnhardt, she said.

Drivers wrapped in a brand

More than the type of car or the racing team, the primary sponsor -- along with the number -- is how fans identify a NASCAR driver, marketers say. Unlike other sports, NASCAR offers companies rolling and walking billboards visible to fans throughout competition.From their cars to their clothes to their race team, Bartelli said, drivers "have the brand wrapped around them."

By comparison, if Michael Jordan had switched from Nike to Reebok in his prime, the only difference on the court would have been his shoes, with his jersey still reading "Bulls."

Sponsorships with NASCAR teams also can offer companies national exposure compared with deals with other professional sports teams, said Jim Doyle, president of Retail Sports Marketing in Charlotte. Company names are splashed across cars that race on tracks from coast to coast, and in seasons more than nine months long, Doyle said.

"It's in your face," he said. "That's what every brand is looking for."

All that adds up to sponsorship deals ranging from $12 million to $20 million for top drivers, marketers say. For Earnhardt, some say, that figure could reach $25 million or even $30 million.

Finding the right fit

Still, breaking from Budweiser, the largest advertiser in sports, will cost Earnhardt exposure, at least at first, Bartelli said.

"His visibility is invariably going to go down," Bartelli said.

But Earnhardt's switch also will provide opportunities, Bartelli and others said.

First, they said, he likely won't alienate fans by aligning with another beer company.

"He's not going to a competitor," Doyle said. "It's not like Earnhardt is leaving the Yankees and going to the Red Sox."

If Earnhardt ends up with Pepsi or another well-known consumer products company, Bartelli said, it could expand his reach beyond what was possible with Budweiser, which "really constrained what he could do with kids."

Boykin agreed. "You might see more creative targeting of younger audiences," he said.

Some Earnhardt fans will never want to see him in anything other than Budweiser red, marketers say. But his fan base is so large and loyal that most Dale Jr. devotees won't back another driver as long as Earnhardt's new sponsor seems to be a natural fit.

"If it's true to who he is," Boykin said, "I think fans will accept that."

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