For the past 10 years, the name Sprint has been as synonymous with auto racing as it is with cellphones. And the Overland Park-based wireless giant found ample incentive to have its name associated with some of the world’s fastest race cars.
But citing a need to focus more directly on its core business priorities, Sprint announced Tuesday that it has informed NASCAR it will not extend the title sponsorship of the 36-race Sprint Cup Series after the current agreement expires at the end of the 2016 season.
“We are proud of our association with NASCAR’s top series but have made the decision not to extend our sponsorship beyond the next two years,” Steve Gaffney, Sprint vice president-marketing, said in a statement.
“Sprint has long benefited from the unprecedented level of brand integration available in NASCAR and the passionate fan base that is the most loyal in sports. Without question, the NASCAR sponsorship property has been a valuable investment for us and will be for our successor.”
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That sponsorship extends back to 2004, when Nextel — which merged with Sprint in 2008 — signed a 10-year, $750 million agreement with NASCAR for what was then known as the NASCAR Winston Cup Series. Sprint extended the contract for three years after the 2013 season, but for what was believed to be less money.
Now, just as the tobacco industry faced new challenges when Winston bowed out after 33 years of sponsorship, Sprint and the wireless world are encountering new issues.
“We appreciated the fact that we were the track in Sprint’s hometown,” said Kansas Speedway president Pat Warren, “and we tried to be particularly attentive to the partnership and do things for the employees. I’d be thrilled if the business environment were such that Sprint could continue to do this, that it would make sense for them.
“But I completely respect the fact they’re looking at their landscape right now and saying they need to focus on other things.”
Indeed, Sprint is in the midst of cutting 3,700 jobs and slashing $1.5 billion from department budgets under chief executive Marcelo Claure, who replaced longtime CEO Dan Hesse in August.
Claure was installed by Tokyo-based SoftBank Corp., which owns 80 percent of Sprint. He immediately began a review of all spending and told investors in September that Sprint would spend only on what it needed to have rather than on what he called “nice-to-haves.”
Sprint’s bank account has suffered this year as more than 1.8 million of its most valuable customers have left. Claure has approved price cuts and special promotions recently in an effort to win subscribers back.
Financially, the company has posted a quarterly profit only twice since the start of 2008.
“It’s just a reflection of the wireless marketplace having changed and is still changing,” Warren said. “If you look back at when Nextel bought the series, the wireless base was still growing pretty fast and the market was growing pretty fast, but that’s not the case anymore.
“It’s a much more mature market, and it’s a lot less about customer acquisition now and more about other things they need to do and focus on. I don’t think it’s a reflection of the sport. You’re disappointed when you lose any kind of a partner like that, but businesses change, and evolve, and that’s what you’re seeing there.”
Kansas Speedway has been the site of Sprint Cup racing since 2001 and has staged two races a year since 2011. The annual fall race has been part of the Chase for the Sprint Cup since the playoff format was introduced in 2004.
Certainly, the operators of Kansas Speedway have enjoyed the benefits of having Sprint right down the road. Hundreds of Sprint employees, including the company’s top executives, attended NASCAR events at the racetrack. NASCAR drivers often made personal and promotional appearances at the Sprint campus in Overland Park during the days leading up to races.
“NASCAR and Sprint have enjoyed a long and productive partnership that has returned significant value to both parties,” said Brett Jewkes, NASCAR senior vice president. “The NASCAR Sprint Cup Series is a unique, premium sports marketing platform with strong momentum, so we are very confident of moving forward in 2017 with an outstanding new partner. In the meantime, we look forward to Sprint’s partnership on the best racing series in the world for the next two seasons.”
Wireless industry observers speculated that Sprint may want to shift the marketing money it currently directs to NASCAR to soccer. Claure owns a soccer team in his native Bolivia and is trying to win a Major League Soccer franchise for Miami with his partner in the venture, international star David Beckham.
“MLS is up-and-coming, and he (Claure) loves soccer,” said Berge Ayvazian, an industry consultant at UBM Tech. “He’d certainly rather put his money into soccer than cars.”
NASCAR’s second-tier national series, formerly known as the Nationwide Series, also will have a new title sponsor, Xfinity, which is starting a 10-year agreement in 2015. Xfinity becomes the third title sponsor in the program’s history, following Anheuser-Busch (1982-2007) and Nationwide (2008-14).
Earlier this year, Camping World extended its sponsorship of NASCAR’s truck racing series through 2022.
“We genuinely appreciate the fans, teams, drivers, tracks and media who have been so supportive and welcoming to us during these many race seasons,” said Sprint’s Gaffney. “We look forward to our remaining time as sponsor of the Sprint Cup Series and eventually assisting with the transition to NASCAR’s next title partner.”
The Star’s Mark Davis contributed to this report.