Nextel Communications made history June 19 when it signed on to be the title sponsor of what will be known as the NASCAR Nextel Cup, starting with the 2004 season. Nextel replaces the current sponsor, Winston, which has been the title sponsor for 33 years. The 10-year contract for a reported $700 million to $750 million is the largest sponsorship deal in the history of sports, dwarfing other pacts like Nike’s 13-year deal for $440 million with English soccer club Manchester United and Winston’s current $200 million five-year agreement with NASCAR. Nextel beat out other companies like McDonald’s, Coca-Cola and Visa, which were all reportedly interested in signing on as the title sponsor. But the question that investors must ask is this: Can Nextel make a profit on this deal? At the press conference announcing the agreement, Nextel stated that the deal would not negatively affect its bottom line. A closer look at the numbers shows in fact there could be a tremendous upside to the deal for Nextel. In the first quarter of this year, Nextel generated an average of $67 in revenue per customer. Its 11.1 million customers produced $2.2 billion in service revenue for the quarter. See full article at Forbes.com: Nextel’s Push To Talk Profits and see past news on the deal, announcment and other things on my NASCAR Sponsors page .(8-14-2003)
