NASCAR Nextel Press Conference New York City, New York June 19, 2003 Part 3 of 3 Q: I wanted to ask if you could talk about your target demographic for your audience as far as expanding the Nextel community. TOM KELLY: : Let me start with...
NASCAR Nextel Press Conference
New York City, New York
June 19, 2003
Part 3 of 3
Q: I wanted to ask if you could talk about your target demographic for your audience as far as expanding the Nextel community.
TOM KELLY: : Let me start with the fact that primarily our focus has always been business. Over the years we have understood that people in their daily lives, they have a business life, they used to have a personal life. Today it seems that business lives and personal lives are completely intertwined 24 hours a day.
When we looked at our business demographics, we see those as demographics that reflect everything in people's lives. Our high value individual segment, one of the fastest growing segments, is clearly an important new demographic for us.
As many of you may know, we're testing a product targeted specifically to the youth today in California and Nevada, which is going extremely well. We're also expanding our opportunities, looking at ethnic markets, especially the Hispanic market, where we will be doing pilots this year.
While our primary focus is on business, the reality is that businesses are composed of people who take our technology and use it in business and their personal lives and find the value to be driven all across that.
We see lots of families using Nextel. In fact, when you think of Nextel and our Direct Connect product as being something that holds teams together, the next best thing to a great team that I can think of is a great family and their ability to communication each other.
Q: Did you set out to get a technology company? Was it a sector you were completely focused on or were you just waiting out for the highest bidder?
BRIAN FRANCE: We identified the technology category as an untapped market. Although we didn't want to limit ourselves, we looked at all kinds of different opportunities and companies that could help us grow the sport, grow the franchise.
In the end, it became pretty clear to us that if we could find the right partnership with a technology company, it would be a home run. All the stars have to sort of line up. You have to have somebody that sees things the way you see them.
Much has been said today about the cultural fit. That's got to be there. The passion's got to be there. All those things happened at once, and that's why we're sitting here today.
Q: Are there any specific markets that were previously not open to the NASCAR franchise that might be open now with the partnership with Nextel?
BRIAN FRANCE: I think certainly the youth market is going to be a market that we're going to go after more aggressively. Talked a lot today about families. I think just the nature of the platform of wireless technology, the word used is "unlimited". I don't want to throw a bunch of cliches out, you would sort of say we're sizing this up and we'd like everybody in this country to be a NASCAR fan. That's our goal. The Nextel team's going to help us gain object that proposition.
GEORGE PYNE: I think when you look at the challenges RJR had with restrictions on advertising, in the future the ability to bring to life Jeff Gordon and Dale Earnhardt, Jr., Tell that story on national TV, national radio, outdoor signage, and as Tom said to children, 15 -, 16-year- olds put on their 24 car telephone, they're going to find out how Jeff qualified on Friday, what Dale has up his sleeve for him on Sunday.
I think Nextel is going to be able to bring to life NASCAR in ways that have never been done before. It's a very exciting time for the sport. That would have happened with any company that didn't have the restrictions, but now it's even more exciting, the whole aspect of technology. It will invigorate our hard core fans, when we look back at our TV deal, 25 to 40 million, because people had better access to America's greatest athletes. What Nextel is going to do is continue to give the hard core fans more access to America's greatest athletes, and it's also going to expose our athletes and cars to new fans, and we think this is a great opportunity to grow the franchise.
MARK SCHWEITZER: We're in great company as a company and a sport. The Fortune 1000 commitment to the sport, whether it be through partnerships or hospitality, we think it really balances targeting all the way up and down the spectrum, from the very high end to the Fortune 1000 all the way down to youth demographics that we discussed today.
But from a Nextel perspective, in terms of breaking new ground from a segment perspective, this is just -- we're delighted to be able to join the parade, if you will, of a great many companies who understand where and how to find customers.
Q: With Nextel's presence in the Winston Cup, how will that affect other wireless companies coming into the NASCAR scene, companies that are already there, the Texas race has Samsung?
TIM DONOHUE: You're right. There are other telecommunications, and specifically wireless companies involved in NASCAR today. Those companies such as All-Tel and Cingular are grandfathered into the deal. We have the exclusive rights in terms of wireless and other pieces of telecommunications. Anyone trying to come in over the next 10 years, that won't happen because it will be our exclusive right.
But in terms of the current players at NASCAR, we welcome them. We hope they stay in. They are a very, very important part of the success of NASCAR.
Q: Dale, even though you said you have to be willing to accept change, being from NASCAR's core demographic, the southeast, how willing or do you think the traditional fans will accept this change? Also moving races out of the southeast?
DALE EARNHARDT, JR.: I think that they'll accept the new title sponsor rather well. I can't see anybody not getting excited about such a great opportunity, such a huge step forward for the sport.
It solidifies a lot of credibility in the sport, so it's a grand move. I think a lot of even the core, core fans are going to accept and be excited about this.
As far as the schedule change, I think the schedule change is probably most important to the drivers and NASCAR and sales. I was pretty excited about the new changes we've had or the past couple of weeks. I look forward to more changes. Look forward to a couple weekends off. We can all be wishful (laughter).
You know, just as a young driver, I'm really excited about this time and this place for the sport and where it's -- everybody was commenting about where the peak was, whether we had reached that or whether there was more to have or more to do. And I think it's not even in sight yet.
So, you know, there's so much. We're not spread evenly across the country, and I think that's an advance for us in the next couple years, is to try to move into new markets and to try to frequent the ones that we have now, you know, more often.
So, you know, things are going to have to be sacrificed. Unfortunately, the sport was started corely in North Carolina, that area, the southeast. We'll have to sacrifice a little bit to see the sport move into new venues and move further up the chain.
But, you know, not to toot my own horn, but the In-Demand thing, which is where fans can sign on, view like a camera on the roof of my car, had more viewers than possibly Game 6 of the NHL finals. I think that says a lot about where the sport's at and a lot about the decisions that Nextel has made and a lot about the future, so I'm excited.
Q: What new license product categories are opened up as a result of the partnership with Nextel that were not available with Winston?
BRIAN FRANCE: Obviously any of the products that we try to move into the youth market, games, video games, different toys, all the restrictions that the RJR group always wanted to steer clear of, that won't be the case today.
We'll be able to bring Nextel into our family of great licensees to make a lot of the merchandise that our race fans enjoy buying thankfully every year. You know, I would say primarily the youth market. George may have another view on that.
Q: I want to ask about the heritage of our sport, where you see Nextel going. How many years? You're taking something that's been around for a very long time and doing great things with it. I'm sure that means a great deal to you.
TIM DONOHUE: It does. As we said earlier in the comments, it's a 10- year agreement. What we really hope and we think we can make this happen along with NASCAR. This is a long-term relationship, one that you've seen for the last I believe 31 or 32 years at RJR. As I said in my comments, and Brian has made note of it up on the podium here, we think of the chemistry between the two companies is just wonderful. We think the cultures match extremely well. We're both young, aggressive, we're committed, and that's the attitude that we come into the NASCAR family with.
You know, I take a look at these arrangements and say it's a 10-year arrangement, that's terrific. But my view is I hope this is a lifetime arrangement with Nextel and NASCAR. We think we're going to be able to demonstrate to NASCAR and its fans that we're going to be a great partner.
Q: Becoming title sponsor of NASCAR, what does this do with your involvement in other sports and other ventures, sponsorships?
TIM DONOHUE: We have always, always been on the forefront in terms of sports marketing and sports sponsorship. This to us is probably the most significant sports sponsorship that we have ever had. We will continue to be very active, as well, with the NHL as an example. We do some work with Major League Baseball. We do some work with the National Football League.
In terms of sports sponsorship, this is going to be key to us. We have no intention, though, of not looking at other sponsorships as we move down the road, and we're going to give NASCAR an awful lot of attention.
Q: Can you talk in percentage terms about how much of the money from this deal goes to the drivers, to NASCAR, to television, anybody else?
BRIAN FRANCE: We never get into specifics of a contract. I will tell you the investment is strong on all fronts. Our championship point run has been the largest in professional motorsports. We anticipate that growing. The tracks are going to be -- it's a big investment across the board. It's all going the right way, and it's very significant. We just don't disclose every detail.
Q: Reynolds sponsorship included not only a financial agreement with NASCAR but also with the speedways. Does your contract include direct payments to the speedways themselves?
MARK SCHWEITZER: It absolutely does. Earlier this week I signed over 30 agreements, and we look forward to building a strong relationship with all of the venues and the folks who operate the sport so successfully. We understand you have to make investments at another level to make this work and we're prepared to do that.
MODERATOR: Thank you. That ends the formal Q&A session. We thank our panelists.