NASCAR's financial and sponsorship woes are well documented, and executives in the sport have been searching for ways to cut costs and boost revenue.
According to Sports Business Journal's Adam Stern, there might be a solution that could help teams financially next year. For the first time in 70 years, NASCAR will have a new contingency sponsor program in the Cup Series that it will take space on the race cars owned by NASCAR and transfer it to the teams.
? The move marks most significant overhaul of contingency program since first instituted during NASCAR?s founding nearly 70 years ago.
? It?s significant in that it takes space on race cars that was owned by @NASCAR and transfers it to the teams.
? https://t.co/u15h6AxQmO pic.twitter.com/HW5MKZQzdl
— Adam Stern (@A_S12) December 4, 2017
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The current contingency deal runs through 2021, though some of the new changes will take effect in 2018. By 2022, the new contingency sponsor program will have fully replaced the current one.
Stern also reported that teams will likely pool the space and sell it collectively.
Key points on the overhaul of the contingency sponsor system:
? Changes will phase in as current contingency deals expire (the last of which goes through 2021)
? Teams will likely pool the new space and sell it collectivelyhttps://t.co/u15h6AxQmO pic.twitter.com/PRJhWbreQW
— Adam Stern (@A_S12) December 4, 2017
In the past, NASCAR has used the front side panels for decals for 16 contingency sponsors. The new deal would see more brands promoted on social media as the sponsorship focal point becomes more digitally oriented.
Sponsors will have the option if they want to opt in to the new contingency plan next year, or they can wait until the deal expires in 2021.
Sponsorships account for about 75 percent of a team's revenue each year, and the hope is that this new plan will help teams earn more money each year.
If this deal is as beneficial to a team's revenue as it seems, then this will be a big win for NASCAR. And the sport is in need of a win right now when it comes to finances.