Even more than your typical professional sports league, Nascar’s official roster of corporate sponsorships reads like a no-brainer: motor oils like Mobil 1, auto manufacturers including General Motors (GM) and Ford (F), and Bank of America (BAC), whose global headquarters in Charlotte is near the sport’s gleaming new hall of fame. On Monday, however, Nascar announced a new partner that doesn’t seem quite a fit for racing fans: Hewlett-Packard (HPQ).
Officially, in the terms of the press release, the multiyear agreement “designates HP as an Official Technology Partner” that will spearhead “innovations” in the sport. Charles Salameh, a Hewlett-Packard vice president, says that “Nascar needs to stay on the cutting edge of technology to innovate and deliver an engaging, fulfilling experience for its fans around the world.” For the Palo Alto (Calif.)-based tech giant, meanwhile, “Nascar will be a powerful platform” for “state-of-the-art products, services, and solutions,” said Steve Phelps, the sport’s chief marketing officer. Neither the company nor Nascar elaborated on these “innovations.”
One of the biggest problems auto racing faces is a drop in attendance. The giant grandstands at tracks such as Dover International Speedway hold upwards of 135,000 spectators. But when the Sprint Cup rolled through town for the FedEx 400 on June 1, an estimated 75,000 showed up. According to USA Today, overall attendance fell 8.5 percent from 2009 to 2011. “On TV it’s a resilient sport, but as a spectator event, Nascar faces the same problem as the NFL,” says Craig Depken, a Nascar expert and professor of business at the University of North Carolina-Charlotte. “Watching a race at home is much different than being there, where there is no replay. Races are loud, smelly, and if you don’t have the scanner headset, you really don’t know what’s going on. Just like the NFL is trying to get people away from 65-inch plasmas to come into the stadium, Nascar is doing the same.”
Depken believes that Nascar cultivated a partnership with HP to bring its tracks into the 21st century. “It’s likely that they’ve teamed with HP to bring in wireless technology,” he says. “Right now the question is: What else can you do at your seat? What else can Nascar bring to you to improve the experience? All over we’re seeing stadiums being outfitted with wireless technology, and in some cases computer-type devices in the backs of seats, where you can order concessions and check stats.”
If this is the case, some of the potential upsides for HP are more obvious than others. There is, of course, the rabidly loyal fan base of 70 million unique TV viewers that avidly embraces the cross section of speed and in-your-face consumerism—and that can’t be a bad thing for of HP’s products. But according to Jon Ackley, who teaches a business of Nascar class at Virginia Commonwealth University, there are other benefits to becoming a Nascar partner. “Nascar has the Fuel for Business Council, which began with four or maybe eight major sponsors more than a dozen years ago,” he says. “It would meet, and Nascar would tell them what they’re doing and the sponsors would strike up relationships” with each other, in a sort of high-level networking.
Ackley says these companies would strike deals. For instance, UPS (UPS), a Nascar sponsor, would become the exclusive shipping service for Best Western, also a Nascar sponsor at the time, which would then provide traveling UPS employees with discount rates. “What’s in it for Nascar? It builds and fosters relationships with their sponsors and keeps them happy, and gets them something for the dollars they’re spending,” he says.
The Fuel for Business Council is currently 60 sponsors strong, according to Nascar, and meets four times per year.