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Nextel to Sponsor
NASCAR's Top Division

NEW YORK -- Say goodbye to the NASCAR Winston Cup Series. And say hello to the NASCAR Nextel Cup Series.

The world of stock-car racing changed quickly and dramatically Thursday morning with the announcement that Nextel Communications Inc. of Reston, Va. will back NASCAR's top series for 10 years, starting in 2004.

The deal was announced amid smoke and laser lights in the NASDAQ building in Times Square. And it took less than an hour for NASCAR to proclaim that 33 years of Winston sponsorship was over, and that a new era of the sport had begun.

"Today, NASCAR takes another giant step for the future of the sport," said chairman Bill France Jr., son of NASCAR founder Bill France Sr.

Officials from NASCAR and Nextel sung each other's praises Friday, saying the deal will be good for both sides.

"I think our companies, Nextel and NASCAR, share certain similarities," Nextel president and CEO Tim Donahue said. "Both of our organizations began as up-starts. And, to be candid, not a lot of people took us seriously. But look at us now: America's No. 1 spectator sport and America's most successful wireless company joining forces.

"It's no surprise why we at Nextel would be so interested in becoming part of the NASCAR team. Simply put, it is the most popular and exciting sport in America, and it has the most dedicated fans."

Nextel replaces R.J. Reynolds, whose Winston brand has become synonymous with NASCAR since it joined the sanctioning body in 1971. But in early February, RJR told NASCAR it wanted out of a five-year contract extension it signed last year. NASCAR started looking around, and four months later has a deal some estimate as high as $90 million a season.

Nextel and NASCAR envision expanding its already broad fan base, and there was a lot of discussion about the youth market Friday. RJR, because of advertising restrictions, couldn't go after anyone under age 18, but Nextel has no such restrictions.

"Unfortunately, R.J. Reynolds has been limited in a lot of areas, and they've done a fantastic job, but I see there are very few limitations as to where Nextel can take it," four-time Winston Cup champion Jeff Gordon said. "Who knows where they can take it now going forward in the future?"

Some of the first marketing steps, which can't begin until January, appear to be headed toward teen-agers. NASCAR senior vice president Brian France said "the youth market is going to be a market that we're going to go after more aggressively."

"The youth market is one of the most aggressive adapters of new technology," Nextel executive vice president and COO Tom Kelly said. "Sixteen-to-20 year-olds, they don't remember a time when there was not wireless phones. That's a change in the fabric of this country that shows that wireless is becoming a pervasive technology. You couldn't kill it if you tried."

Nextel will also try to reach out to existing fans and try to deepen their experience using wireless communication. There were no details, but Kelly used the example of fans being able to use cell phones to check qualifying.

The details of Nextel's deal began to emerge last week. The negotiating began in late March when NASCAR put in a call to Nextel. The initial meeting took place at Nextel's headquarters, but it didn't take long to get things going.

"From the first day that the two companies got together and started the discussions, we knew that there was a chemistry between us that would make this work," Donahue said.

NASCAR chief operating officer George Pyne said the sanctioning body talked to "four or five companies," but when offered the chance to partner with a technology company, NASCAR jumped.

"There was a great deal of speed, a great deal of teamwork," Pyne said. "They were terrific people to work with. I think start to finish, we probably were 60 to 75 days. It was a terrific process for us."

For Nextel, it was an easy choice, said senior vice president of marketing Mark Schweitzer.

"For Nextel, I would add opportunities like this come along once every 32 years and are not to be a protracted process," Schweitzer said. "We're a very competitive company in a competitive industry. We determined early on that this is something to go after, and enjoyed the process with NASCAR.

"But the opportunity is so easy to comprehend here, that going after it made perfect sense for Nextel."

Terms of the deal weren't disclosed, and neither party was very willing to discuss many specifics. But there were some details that emerged Friday:

  • While Nextel will have wireless exclusivity, sponsors like Alltel and Cingular will be grandfathered into the contract and are welcome to remain, Donahue said.

  • The all-star race will be sponsored by Nextel and will be called the NASCAR All-Star by Nextel, NASCAR president Mike Helton said.

  • Nextel signed "over 30 agreements" with individual tracks, Schweitzer said, making "investments at every level."

  • While the deal is for 10 years, Donahue hoped it could become a "lifetime arrangement.

  • Donahue said Nextel would work with NASCAR on future schedules but deferred to the sanctioning body because that is "expertise inside of NASCAR and not, frankly, our expertise."

    The announcement began with the prophetic phrase "A New Era Has Begun," while "Baba O'Riley" by The Who blared on the speakers. And NASCAR didn't take long to honor its current sponsor, Winston, playing a short video in tribute to RJR.

    France and Donahue then made formal remarks before Donahue brought Gordon and Dale Earnhardt Jr. to the stage to present them with cell phones to match their car numbers and colors.

    The two drivers are clearly a big part of NASCAR's future, and Junior even joked that he's been a Nextel customer for two years.

    Now, though, the thoughts turn to the future.

    "My father would definitely be proud," France said. "We've come a long way toward fulfilling his vision, and we've come a long way toward making NASCAR racing a national sport with fans spread across America.

    "We still have miles to go to achieve our goals, but we are confident we are well on our way, with Nextel as our new partner."

    Source

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    The New Points System

    CONCORD, N.C. -- In a bid to add excitement and put more emphasis on winning, NASCAR changed its scoring system by setting up a showdown for the Nextel Cup championship over the season's last 10 races.

    "I'm confident it is going to work and the drivers and teams are going to like it after they hear all the details," NASCAR chairman Brian France said.

    NASCAR has been criticized in recent years for using a points system that rewarded consistency more than winning. Matt Kenseth won the 2003 championship despite finishing first in just one race. Ryan Newman was sixth in the standings despite winning a series-high eight races.

    France said the changes to the system that had been in place since 1975 are aimed at increasing attendance and TV ratings that usually drop in the fall because of competition from the World Series and NFL.

    The new format will take effect after the first 26 races. The drivers in the top 10 and any other within 400 points of the leader will earn a berth in what NASCAR has dubbed the "Chase for the Championship."

    Those drivers will have their point totals adjusted. The first-place driver will begin the final 10 races with 5,050 points, the second driver 5,045 and so on, with incremental drops of five points for all those involved in the championship showdown.

    The drivers not involved in the championship will keep the points they have earned to that point in the season.

    "This new model will provide all title contenders an opportunity to compete and contend for the championship," NASCAR president Mike Helton said.

    He pointed out that no driver outside the top 10 in points with 10 races remaining has ever won the championship.

    "This is not a playoff," Helton said. "Every one of our events will continue to be a Super Bowl and all 43 drivers will be trying to win every race."

    The champion will be guaranteed a minimum of $5 million, while each of the other drivers who finish in the top 10 will earn $1 million. The 11th-place finisher will get a $250,000 bonus.

    NASCAR also will award a race winner an additional five points, beginning with the season-opening Daytona 500 on Feb. 15, 2004.

    Source

     

    Nextel Makes Statement on Merger with Sprint

    From Press Release
    December 17, 2004
     

    Sprint and Nextel announced yesterday a merger of equals between the two wireless telecommunications companies. Together, Sprint Nextel will be a larger, stronger company with more resources, which will be better positioned to transform our vision of a wireless future into a reality.

    There are obvious questions as to the impact this could have on Nextel's NASCAR sponsorship. Nextel stands by its belief that the NASCAR Nextel Cup Series is one of the best brand and sponsorship investments Nextel has ever made. Nextel has invested significant resources throughout 2004 to find ways to enhance the sport and provide a more dynamic fan experience. Nextel expects no re-branding of logos or signage in 2005 and will continue to honor that commitment as Series sponsor and the programs initiated in 2004 will only continue to evolve.

    We expect our relationship with NASCAR to continue and to prosper and the new Sprint Nextel team is enthusiastic about the NASCAR relationship. Both groups are focused on building on the success of the Nextel Cup's first year.

    The merger is expected to close in the second half of 2005 and is subject to approval by the shareholders of both companies, approval by various federal and state regulatory agencies, possible foreign governmental approvals and other customary closing conditions.

    Forward-looking statements

    A number of the matters discussed in this press release that are not historical or current facts deal with potential future circumstances and developments, in particular, information regarding the new company, including expected synergies resulting from the merger of Sprint and Nextel, combined operating and financial data, future technology plans and whether and when the transactions contemplated by the merger agreement will be consummated. The discussion of such matters is qualified by the inherent risks and uncertainties surrounding future expectations generally, and also may materially differ from actual future experience involving any one or more of such matters. Such risks and uncertainties include: the failure to realize capital and operating expense synergies; the result of the review of the proposed merger by various regulatory agencies, and any conditions imposed on the new company in connection with consummation of the merger; approval of the merger by the stockholders of Sprint and Nextel and satisfaction of various other conditions to the closing of the merger contemplated by the merger agreement; and the risks that are described from time to time in Sprint's and Nextel's reports filed with the SEC, including each company's annual report on Form 10-K for the year ended December 31, 2003 and quarterly report on Form 10-Q for the quarter ended September 30, 2004, as such reports may have been amended. This press release speaks only as of its date, and Nextel disclaims any duty to update the information herein.

    Additional information and where to find it

    In connection with the proposed transaction, a registration statement on Form S-4 will be filed with the SEC. SPRINT AND NEXTEL SHAREHOLDERS ARE ENCOURAGED TO READ THE REGISTRATION STATEMENT AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, INCLUDING THE JOINT PROXY STATEMENT/ PROSPECTUS THAT WILL BE PART OF THE REGISTRATION STATEMENT, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE MERGER. The final joint proxy statement/prospectus will be mailed to shareholders of Sprint and shareholders of Nextel. Investors and security holders will be able to obtain the documents free of charge at the SEC's web site, www.sec.gov, from Sprint Investor Relations at Sprint Corporation - Investor Relations, 6200 Sprint Parkway, Overland Park, Kan. 66251 or call 800-259-3755, Option 1 or from Nextel Investor Relations at Nextel Investor Relations 2001 Edmund Halley Drive, Reston, Va. 20191 or call 703-433-4300.

    Participants in solicitation

    Sprint, Nextel and their respective directors and executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies in respect of the merger. Information concerning Sprint's participants is set forth in the proxy statement, dated March 16, 2004, for Sprint's 2004 annual meeting of shareholders as filed with the SEC on Schedule 14A. Information concerning Nextel's participants is set forth in the proxy statement, dated April 2, 2004, for Nextel's 2004 annual meeting of shareholders as filed with the SEC on Schedule 14A. Additional information regarding the interests of participants of Sprint and Nextel in the solicitation of proxies in respect of the merger will be included in the registration statement and joint proxy statement/prospectus to be filed with the SEC

    Source

     

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