Lowe’s has decided not to renew its naming-rights deal at Lowe’s Motor Speedway after this year, ending an 11-year relationship that began as the first racetrack naming-rights sponsorship. After more than a year of renewal talks, the home improvement retailer informed Speedway Motorsports Inc., the track’s parent company, of its decision within the last two weeks, industry sources said. The initial 10-year, $35 million deal ran through 2008 and last year the two sides agreed on a one-year extension through 2009 when they could not finalize a long-term deal. Talks continued this year, but the two sides have not been able to reach an agreement. Sources said it’s not inconceivable for Lowe’s to change its mind, given that five months remain on the current deal and the unpredictable nature of the economy, but such a change of heart is considered unlikely. Barring a late agreement with Lowe’s or the signing of a new corporate partner, the track is expected to go back to its former name, Charlotte Motor Speedway, in 2010. Industry sources say that SMI initially came to the table asking for close to $9 million annually, and while that number dropped over the course of their discussions, the two sides could not come together. There were other factors. Lowe’s must also consider its future with driver Jimmie Johnson, who has won three straight Cup championships and stands as the sport’s most dominant figure. The Lowe’s deal with Johnson and Hendrick Motorsports expires at the end of 2010 and those renewal talks are expected to begin later this year. Industry sources say that Lowe’s will be expected to pay a hefty increase to maintain its position as the only primary sponsor on Johnson’s #48 car, which is uncommon in this time of co-primary and “tri-mary” sponsorships on a car. The most expensive sponsorships go for the mid-$20 million range annually. Lowe’s also is navigating the recession, which has struck the home improvement and building sector especially hard. Lowe’s earnings fell 22% in 2008 and 60% in the final quarter of the year.(Sports Business Journal)(7-31-2009)
UPDATE: Officials from Speedway Motorsports Inc. and Lowe’s insist they are still talking in the wake of a report that the home improvement chain is ending its sponsorship of SMI’s flagship track. SMI president and CEO Marcus Smith said both sides are still negotiating and that he remains confident a deal will be completed soon. “We’re still working on and discussing the components of another extension to continue our relationship,” Smith said. “Those components have not been finalized, but the process is moving along.” Lowe’s spokeswoman Chris Ahern said there was “nothing to report” about the nature of the company’s talks with the track. SMI owner Bruton Smith, in Kentucky for this weekend’s IndyCar race at Kentucky Speedway — which is owned by SMI — could not be reached for comment.(Associated Press)(8-1-2009)
