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NASCAR unexpectedly strikes a compromise with Sprint-Nextel
AT&T’s blue globe decals will be back on Richard Childress Chevrolet and on Jeff Burton’s uniform for tonight’s Chevy Rock & Roll 400, for the rest of this season and for 2008.
The decals have been the subject of major controversy in NASCAR recently and the compromise that was agreed to yesterday between Sprint-Nextel and NASCAR was unexpected.
In 2009, however, it appears AT&T will again be out in the cold.
This race, the last before the title chase begins next week at Loudon, N.H., might be relatively devoid of any real championship drama, but there has been no shortage of off-track action here. And NASCAR’s making peace with AT&T was a real shocker.
Jimmie Johnson and Jeff Gordon, teammates for Rick Hendrick and assured of top seeding in the NASCAR championship playoffs, swept the front row last night for tonight’s race in NASCAR’s cars of tomorrow. Teammate Kyle Busch made it a 1-2-3 night for the Chevy team owner. All three are locked into the title chase.
But the AT&T surprise, Robert Yates’ sudden retirement, the dissolution of Yates’ partnership with Paul Newman and Carl Haas, and Ricky Rudd’s badly separated shoulder were the key stories of the day.
Why the abrupt reversal by NASCAR, once so staunchly determined to enforce its concept of exclusivity?
“I don’t think it’s a reversal; in any disagreement people early on say things … and I’m just happy we’ve reached a compromise… and if that appears to be a reversal, then so be it,” NASCAR spokesman Jim Hunter said. “We’re just delighted to have worked it out.
“Litigation is expensive, and it is very time consuming, and it tends to take your focus off things you need to be focusing on. The uncertainty of courts…. you just don’t know.”
One key, according to sources close to the negotiations, was AT&T’s big TV ad budget for NASCAR Cup races, which reportedly was extremely important in the latest NASCAR contracts with its television partners. If AT&T were forced to drop its sponsorship of the Childress team, the telecom giant was apparently ready to pull the plug on those lucrative TV ads.
NASCAR issued a brief statement confirming “NASCAR, Sprint Nextel, AT&T and Richard Childress Racing have agreed to end the legal dispute over branding of the (Childress-Burton) car. The agreement immediately permits AT&T to continue as primary sponsor using the AT&T name and logos through the 2008 season.”
NASCAR’s Brian France, in a statement, called it a “compromise from all sides that ultimately serves the sport well.
“It was time to find a mutually agreeable resolution.”
“No one likes litigation,” Hunter said. “We’re delighted to move on. We’ve got this behind this.”
Neither side offered any details of the agreement. But the only thing that NASCAR appeared to have gained was in not losing its philosophy of exclusivity, a possibility if legal wrangling had continued.
What Sprint Nextel gains is even more unclear, since A&T will now by a prominent tour sponsor for at least the next 15 months.
Nevertheless Sprint-Nextel officials agreed to the compromise.
Tim Kelly, the chief marketing officer for Sprint, issued a statement saying “This is a great solution….. we accomplished our ultimate goal of protecting our unique position with NASCAR.”
“This gives Richard an opportunity to find a sponsor by the end of ‘08,” Sprint Nextel’s Dean Kessel said. “And it protects our unique situation in this sport.”
Childress had little to say about the compromise: “You’ll have to talk with someone higher up than me” for details. “But we’re very pleased to have the AT&T logos back.”
The NASCAR statement also included comments from Dave Garver, the executive director of wireless sponsorships for AT&T: “This agreement is the right step taken at the right time.”
The latest part of the controversy arose several months ago when AT&T announced it was rebranding Cingular as the new AT&T, to which NASCAR and Sprint Nextel vigorously challenged in several courtrooms, most recently three weeks ago with a NASCAR victory against AT&T in the 11th Circuit Court of Appeals. That forced Burton and Childress to strip away all the blue globe logos from Burton’s car and uniform. In response AT&T, which has been a Childress sponsor for several years under the Cingular brand, had Burton’s car painted noticeably without any identifying logos.
Another courtroom battle had been anticipated in the coming weeks, and NASCAR officials were becoming noticeably testy over the entire issue. NASCAR, which filed a $100 million countersuit against AT&T, has argued that its concept of sponsorship exclusivity with Sprint-Nextel legally precluded AT&T from painting its logos on Childress’ cars.
AT&T, which won the first round in March, is spending about $20 million a year sponsoring the Childress-Burton team and perhaps as much as $60 million more activating that sponsorship with NASCAR-oriented ads and promotions.
The Cingular brand and paint schemes were grandfathered in by NASCAR when Nextel took over sponsorship of the Cup series in 2004.”
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