NASCAR Nextel Press Conference New York City, New York June 19, 2003 Part 2 of 3 Q: Lot of fans in the south are concerned that Nextel might bring a new generation that doesn't necessarily hold on to that southern racing tradition. What are...
NASCAR Nextel Press Conference
New York City, New York
June 19, 2003
Part 2 of 3
Q: Lot of fans in the south are concerned that Nextel might bring a new generation that doesn't necessarily hold on to that southern racing tradition. What are the thoughts on that?
TOM KELLY: If you think about where Nextel has begun, we began our opportunities in the wireless industry by going after business, but primarily small and medium-sized businesses. When you look at the composition of small and medium business, the characteristics of those people, you will find that they're the same whether they're in the south, west, midwest, et cetera.
When we also look at the composition of them overlaid with the NASCAR fan base, we see a tremendous correlation. We don't think this is a southern issue, we think this is a national issue.
When you also take a look at the fantastic broadcast contracts that NASCAR has been able to negotiate, and when you think about today they are I believe only behind the NFL in total viewership on TV, this is already a national sport with an opportunity to deepen that sport into minds and bodies of lots of people that extend beyond the 75 million today.
Q: To be what is certainly a lucrative partnership, seems to have come to fruition rather rapidly. How long were negotiations start to finish? Did you deliberate for a while?
GEORGE PYNE: (NASCAR COO): There was a great deal of speed, a great deal of teamwork. 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. There was a great deal of interest in the property, probably four or five companies, came down to the final strokes.
I think it says volumes about NASCAR as a sport and the health of the overall industry when you look that we're probably in the most challenging economy in the last 10 years, still in the middle of a war. The fact that we have major corporations in America that saw the value of the NASCAR franchise was a very flattering and speaks volumes about where the sport is today. Kim, Mark, Tom have been great to work with. It's been a very pleasant experience.
Our experience tells us when that process is so pleasant, we have great expectations about the future.
MARK SCHWEITZER: (Nextel Sr. VP Marketing): For Nextel, I would add opportunities like this come along once every 32 years and are not to be a protracted process. 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.
Q: Could you speak to the media component of the sponsorship. Are you going to be moving dollars from other sports properties? When do you sit down with the networks? What kind of support are you expecting from the networks?
MARK SCHWEITZER: I would just start by saying we're very impressed with what the networks have done with their coverage of the sport, and that's all of the broadcast partners. We look forward to building a relationship with them. As to the dollar amounts or how it affects other things we have done in the past or will do in the future, we have the luxury of RJR and Winston doing a great job for this season, and we'll take our time to make the best decisions working with NASCAR and those broadcast partners.
Q: Dale Earnhardt, Jr., Jeff Gordon, your names are known nationwide. They're known in by this younger generation. What is it going to take for mom and dad in the New York City market to embrace NASCAR the way the?
JEFF GORDON: Check out the Meadowlands. I mean, I don't consider myself a New Yorker, but I've become very fond of this city and this area, and I've spent a lot of time here over the last couple years. I would love to see something, you know, happen up here.
But I think by Nextel being a part of our sport now, it just broadens -- Mr. Donovan mentioned now he can go out and go to all the fans. I think that's really impressive about this team of Nextel and NASCAR being put together. I think, who knows where they can take it now going forward in the future.
Unfortunately, RJ 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.
DALE EARNHARDT, JR.: I agree. Every time I step out of a car in New York, I see a few moms and dads asking for autographs. I'm really excited about the new relationship with Nextel. Aside from being a Nextel customer for two years, I've been really excited about the new announcement here, just looking forward to it. It opens up a lot of doors and a lot of opportunities.
I've been around the sport for many, many years. We appreciate what RJR has done. It's been a huge, huge catalyst for where we are now, but a lot of things change and you have to be mindful and willing to accept that.
We're looking forward to the new steps we're taking. As a young driver, this solidifies a lot of the future for myself, and Jeff included, and a lot of the drivers coming into the sport in the future. So real excited about it.
Q: Considering the vast news coverage in the past couple years of the volatility in the telecom market, sector, the sort of shake-out in the wireless industry, do each of you feel a need to sort of reassure the public that Nextel is as solid and as stable in its market as RJR was in its market at the time that agreement started?
TIM DONOHUE: If you take a look at Nextel's performance today, it is clearly the best performing wireless company among the six national carriers. If you look at almost any network. In terms of our business, it has never been stronger. Our balance sheet continues to strengthen day over day, month over month, quarter over quarter. I think the future of wireless is clear that it's going to be the No. 1 area in telecommunications, and we are going to be No. 1 in that area if it's up to this management team, and it will be.
So we feel very, very good about our future. We feel very good about the industry itself. We intend to continue to play a leadership role in this industry, both from a customer perspective and from a financial perspective.
GEORGE PYNE: I might also add that Nextel has the highest profit margin in the category, very strong balance sheet, as Tim said. It was recognized this week by BusinessWeek as the No. 1 technology company out of 100 technology companies in America.
When you look at this, as we assess the opportunities out there, there are a number of opportunities in consumer package goods, but we have a very strong presence because of a lot of the great partnerships that we have. What we're excited about today is this a strategic decision to go into the technology category. We think that Nextel in partner with us can bring our content, the world's greatest drivers, to our fans, our hard core fans through many creative and exciting ways.
As Dale and Jeff said earlier, they'll be able to use print, radio and be able to market to children and families in a category that's untapped for us. So we see this much like the broadcast deal where we're able to grow the sport. We see this as another vehicle basically because they have the assets at their disposal and they're in a category that, quite frankly, the opportunity for both of us is limitless, and that combined with the outstanding financial performance and management give us a lot of confidence moving forward.
Q: Mr. Donahue, you mentioned Nextel's desire to continue some of the traditions and commitment that Winston has done over the years. Can you be more specific about that in terms of the series championship and also in terms of what you guys may do for fans as far as interactive programs?
TIM DONOHUE: Let me ask Tom to address all the plans that we're looking at in terms of the fan base, then we'll come back to the championship series.
TOM KELLY: When you take a look at Nextel's technology, I'll back up to the youth market. The youth market is one of the most aggressive adapters of new technology. 16- 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.
In terms of how we look at our technology integrating with NASCAR, we have an opportunity to integrate at almost every level, whether or not it's helping the drivers communicate with their pits, whether or not it's helping the track operations people communicate better, or frankly how we take the action that's on the racetrack and make that available to people both at the race, whether it's on a phone, a laptop or whatever, or to fans who are not attending the race.
It allows us for viewers watching TV to use their wireless devices to interact with the sport on a number of levels, it can be in casting votes for who they think is the best-performing driver, it could be providing opportunities about various aspects of the race, it could give them the opportunity to track a particular driver just uniquely in terms of information specific to them or potentially listening in to pit and drivers talking to each other.
All of those things are the realities of the possibilities. Obviously our friends at NASCAR are going to provide guidance to us in what makes true sense to them.
When you take a look at how wireless works today, the possibilities to take information or activities and extend that to any customer anywhere in our coverage areas across this entire United States is really there.
So we feel that we have an opportunity to actually deepen the fan base as well as to expand it. We think that's attractive to NASCAR and it's attractive to us.
TIM DONOHUE: In terms of the championship, all I can say is we will work with NASCAR to decide, develop what the best strategy is for that particular issue, and move on from there.
Q: I was interested to know if part of the deal is if Nextel will be the title sponsor for the annual all-star race.
BRIAN FRANCE: Yes, they will, that will continue on. They will be the proud sponsor of the all-star event.