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Thursday, August 16, 2007

EXCLUSIVE

Merriam-Webster's Dictionary of Law - Cite This Source
Main Entry: ex·clu·sive
Function: adjective
1 a : excluding or having power to exclude others b : being independent from or not shared by others : SOLE
2 : limiting or limited to possession, ownership, or use by a single individual or group
It seems that some Nascar fans don’t have a good understanding of this word, especially when it comes to Nascar’s Title Sponsor. This past week, Nascar scored a courtroom victory with it’s favorable ruling in the U.S. 11th Circuit Court of Appeals. This is a banner ruling that will not only benefit ALL race teams, but helps secure and stabilize the racing series as a whole.

By giving Nextel exclusive naming/sponsorship rights for approximately 100 million dollars a year, Nascar not only gives teams a financially secure governing body, but also passes off much of this money to teams in prize money. While in the other hand, AT&T is getting the full benefits of a Cup primary sponsorship for less than 18 million a year (probably more like 14 million) when the Title Sponsor was guaranteed mutually exclusive naming and sponsorship rights. What AT&T and RCR are attempting to do is exactly what Nextel was attempting to prevent and more importantly, paying to prevent.

Some of the AT&T/RCR defenders are giving justifications and claiming foul, but lets took a closer look at a couple of them.

“So let get rid of SHELL on HARVICKS car because SUNOCO IS "EXCLUSIVE" Gas of Nascar...
Burton is still wearing the NEXTEL LOGO ON his Suit and on the car...
This is stupid...
Look up the word "exclusive" in the dictionary and see what it means.
I know what that means... it means let NEXTEL own the series... not SPRINT... that came after the agreement with NASCAR, so this should allow 1 car change if they are allowed too.
look up "Close minded" (Thats what NEXTEL is)

1) Sunoco does NOT have the same exclusive rights built into their supplying of the racing fuel. Sunoco is the ‘official racing fuel’ of Nascar. While the 29 car does have SHELL on the hood, Nascar has been very careful to maintain their working relationship with the official fuel supplier (Sunoco), and earlier this season, forced the 29 car to make the focus of their sponsor logos more directed to the Pensoil Lubricant branding and not the Shell fuel. Thus preventing a direct conflict of interest from competing and like products.

2) Nextel had the foresight even during the original negotiations with Nascar that a provision to be put in place (and Nascar agreed) for one name change if Nextel acquired or acquiring another branded name.

The only part I don't like is Nextel/Sprint made it clear they don't want Cingular and Alltel sponsoring a car. Nascar should have took their (um nevermind too graphic to post) before signing up with Nextel. Alltel has not pulled the same stunt as AT&T so they should not be forced out.

Oh well, Winston Cup>Nextel Cup anyday!!!

1) Actually, Nextel and Nascar realized that existing sponsorship agreements before the Title Sponsorship was put into place, needed to be honored. Nascar required Nextel to agree to a ‘Grandfather Clause’, which allowed existing competing wireless communications sponsors to remain with their teams as long as they kept that sponsorship current.
2) Alltel has never once been asked to alter their sponsorship agreement with Penske Racing and the 12 team and as long as they continue that relationship, Nascar or Nextel will have no legal grounds to remove them from the series.
3) Winston when it was the Title Sponsor also had these same provisions in their exclusive deal with Nascar as well. When Winston became the Title Sponsor in 1972, there were no other cigarette sponsors in the series until the day Winston left. Of course some will site the #33 Skoal Bandit car, sponsored by U.S. Tobacco beginning in 1981, however that sponsorship was not in direct competition with Winston in terms of market share. One being a ‘smokeless’ brand the other was not.

Exclusive rights are just that, exclusive, and can and will keep competitions from benefiting from their investment. For example, ever tried to order a Bud Lite at a Colorado Rockies home game? Or a Coca Cola at a Colorado Avalanche or Denver Nuggets game? Try it sometime for a giggle.

1 comment:

AT&T Vroom said...

You are 100% accurate...the teams need to become franchisees (with value) if they remain restricted from selecting their own sponsors of choice.