RICHMOND, VA - SEPTEMBER 07: New decals are seen on the car Jeff Burton, driver of the #31 AT&T Chevrolet, following practice for the NASCAR Nextel Cup Series Chevy Rock & Roll 400 at Richmond International Raceway on September 7, 2007 in Richmond, Virginia. (Photo by Streeter Lecka/Getty Images)
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Hold the phone. AT&T has not given up on NASCAR, despite its agreement to exit the Sprint Cup Series at the end of the 2008 season, sources told SportsBusiness Journal.
The telecommunications turf war that raged throughout much of 2007 between AT&T and series sponsor Sprint supposedly was settled last September with an agreement -- mediated by NASCAR -- that allowed AT&T to keep its marks on Jeff Burton's No. 31 car. In exchange, AT&T agreed to leave Sprint Cup, NASCAR's top series, after the 2008 season.
But that hasn't stopped team owner Richard Childress from lobbying NASCAR to keep AT&T in Cup racing, sources say, and Sprint's continuing financial woes are only adding to the sense that AT&T's sponsorship might not be dead yet.
Also, AT&T is in the first year of a three-year contract with Richard Childress Racing to sponsor the No. 31 car, and there are no exit provisions or refunds for AT&T in the deal, sources said, which obligates AT&T for the sponsorship fee through the 2010 season. AT&T agreed to the deal last June before the settlement was reached with NASCAR and Sprint in September. The deal between AT&T and Childress did not require NASCAR's approval.
If it eventually leaves, AT&T has said it will work with Childress to find new sponsorship. AT&T's annual costs for the sponsorship are believed to be $16 million to $18 million.
RCR officials said they've had no formal talks with AT&T about its plans beyond this season and offered no further comment. NASCAR reiterated that the door is not open for AT&T's return.
"Nothing has changed," said Ramsey Poston, NASCAR's managing director of communications. "The fans certainly don't want to hear any more of this. This is a closed issue. Agreements were made, and we expect all sides to live up to them."
AT&T's official stance continues to be that it will abide by the agreement and exit the sport if nothing changes, but there's always a chance the climate could shift over the course of a year, especially if Sprint's business problems persist. Sources close to AT&T said the company has contingency marketing plans in place if it's still in the sport in 2009.
The chances of that happening, though, remain slim as long as Sprint maintains its current position as series sponsor. Dean Kessel, Sprint's director of NASCAR marketing, fielded several questions during the NASCAR Media Tour about the status of Sprint's sponsorship, on which it spends close to $100 million a year.
"This program works," Kessel said. "The business case remains solid for us staying in the sport, and that's why we're not going anywhere."
Sprint has undergone significant personnel shake-ups in the past month, including the departure of Tim Kelly, chief marketing officer, as new CEO Dan Hesse evaluates his top executives and embarks on a mission to cut 4,000 workers and 125 retail outlets. John Garcia has been named the interim CMO until a permanent replacement is found.
The company also reported last week that it will record a write down of up to $31 billion on its lagging wireless business. Sprint stock closed the week at $10.44 a share, a drop of close to 60 percent since the company bought Nextel for $36 billion in 2005.
Sprint's difficulties have led to numerous reports that it could be ripe for acquisition by another company.
AT&T is the nation's largest wireless carrier (70.1 million subscribers), with Verizon second (65.7 million) and Sprint third (53.8 million). AT&T, Verizon and No. 4 T-Mobile combined to add 5.65 million new subscribers in the fourth quarter of 2007, while Sprint lost 109,000 subscribers. AT&T also enjoyed a record fourth quarter in 2007 with 2.7 million new customers.
AT&T spokeswoman Lauren Butler said she wouldn't speculate about what might happen by the end of the year.
"We're very committed to making this our best year ever in NASCAR," said Butler, who added that AT&T has not cut back on its activation spend for the coming season. "We'd love nothing more than to stay in the sport, but we know there is an agreement for us to be out by the end of 2008."
The dispute between Sprint and AT&T came to a head last year when AT&T filed suit against NASCAR to rebrand the No. 31 car. Sprint joined the lawsuit as a co-defendant.
As part of its 10-year agreement with NASCAR that runs through 2013, Sprint allowed Cingular and Alltel to stay in the sport, while other wireless brands are forbidden from entering the Cup series. When Cingular, the original sponsor of Childress' No. 31 entry, merged with AT&T last year and AT&T sought to rebrand the car, Sprint balked.
In AT&T's lawsuit, it said it wasn't entering the series as a new sponsor, it was simply taking over Cingular's existing sponsorship. A preliminary injunction was filed in AT&T's favor, but NASCAR and Sprint won an appeal of the injunction. All parties settled before the formal lawsuit ever made it to court.
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As a Jeff Burton fan this issue bothers me, again. Back when he was with Roush and NASCAR said no to a liqueur sponsor (Crown Royal), besides others, he lost sponsorship. Roush kept him running but you could tell, it was not working.NASCAR had to accept that genre of sponsorship after the fallout of 911, Crown Royal spent their money elsewhere (IROC series), and Jeff Burton suffered. Now with RCR, he faces a similar situation, because of NASCAR sponsorship deals. I think if NEXTEL can change their name to Sprint, then Cingular can change to AT&T.
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31 Burton fan, WRS Div 3, lan racing Team Smart
Verizon in talks to buy Alltel: Verizon Wireless is in talks to buy Alltel Communications LLC, the country's fifth-largest wireless carrier by subscribers, for $27 billion, according to news reports. If consummated, an acquisition would be the biggest telecom deal since AT&T Inc. bought BellSouth Corp. at the end of 2006. Adding Alltel's 13.2 million subscribers to Verizon Wireless' 67.2 million would create the largest wireless carrier in the country, far ahead of AT&T Inc. with 71.4 million customers. Talks are at a sensitive stage, according to CNBC and The Wall Street Journal. Both reports cited unnamed sources close to the discussions. Representatives of Verizon Communications Inc. and Alltel had no comment Wednesday.(Associated Press), no word on how or if this would effect the sponsor ship of the #12 Penske Racing Dodge of Ryan Newman, whose primary sponsor is Alltel.(6-5-2088)
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By Bob Pockrass
Associate Editor
Scenedaily
Friday, June 06, 2008
LONG POND, Pa. – Verizon and Alltel have agreed to a merger, with Verizon likely to drop the Alltel brand. That would complicate the issue for the Penske Racing No. 12 car currently sponsored by Alltel.
NASCAR spokesman Ramsey Poston said Thursday that Verizon cannot re-brand the car because of NASCAR’s contract with Sprint as the sponsor of NASCAR’s premier series. The contract grandfathered in Alltel and Cingular as long as they did not change teams nor brands.
Verizon’s purchase of Alltel is expected to close by the end of the year.
“It's premature to talk about this,” Verizon Vice President of Corporate Communications Jim Gerace said in a statement. “Our first priority will be to complete the acquisition, which we hope to do by the end of this year.
“When we do, I'm sure we'll have a good handle on the NASCAR situation. We do intend to change the Alltel brand to Verizon Wireless, but over what time period I can't say.”
AT&T challenged the grandfather clause in federal court after it merged with Cingular and the group wanted to put the AT&T logos on the No. 31 Richard Childress Racing car. That car had carried the Cingular branding. The parties settled last September with NASCAR and Sprint, which allowed AT&T to have its trademark on the No. 31 Richard Childress Racing car through the end of this season.
Verizon is a sponsor with Gillett Evernham Motorsports in the Nationwide Series and could continue that relationship. It sponsors rookie Chase Miller. It can have one of the team’s Sprint Cup drivers in the car for races but cannot use that driver in any promotional material.
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No word from Alltel: Car owner [#2,#12,#77] Roger Penske said he has not had any conversations with Alltel officials since the recent announcement Verizon will buy Alltel, a deal that could force Penske to find another sponsor. NASCAR officials indicate that Verizon won't be able to replace Alltel as sponsor for Ryan Newman's car. Only wireless companies already in the sport were allowed to remain when Nextel, which later became Sprint, took over as series sponsor. Penske says he hasn't needed to talk with Alltel officials until the company decides how the new version will be branded. If the Alltel brand goes away, so, it appears, will the sponsorship.(Roanoke Times)(6-16-2008)
SK Telecom in Talks to Acquire Sprint: K Telecom, the largest provider of wireless phone service in South Korea, is in talks to acquire Sprint Nextel, the troubled U.S. wireless carrier, according to people familiar with the talks. SK Telecom, which is smaller than Sprint, would be joined in any deal by private equity firms that would contribute cash towards the purchase, sources told CNBC. A deal is not imminent and while the talks are on-going, participants caution that any agreement would at best be weeks away. The board of Sprint, which has been struggling with significant subscriber losses, is divided about whether to sell the company as some of them hold a belief that a turnaround for the company may not be far off, according to people briefed on its position. Any deal with SK Telecom would have to be friendly. The Koreans have no plans to pursue Sprint should it not wish to be acquired. The talks have not reached a crucial phase, and specific negotiation on price has yet to take place, but they have heated up in recent days.(CNBC.com), , No word on how or if this would effect the Sprint Cup sponsorship.(7-16-2008)
AT&T Not Ready to Hang Up
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