In 1977, when H.A. “Humpy” Wheeler was general manager of Charlotte Motor Speedway, it received its first loan from Charlotte-based NCNB Corp. The racetrack used the $2.2 million to add 10,000 seats, 17 VIP suites and a new press box — and quickly repaid the loan with ticket proceeds. “When the money started coming in, the banks smelled it,” Wheeler recalls. “They have a good way of doing that. We had managed to make enough money by then to show them that we were on the move, and they began to understand our business.”
Speed ahead nearly 30 years. Wheeler is president and chief operating officer of Speedway Motorsports Inc., the Concord-based company that owns what is now Lowe’s Motor Speedway and five other tracks that hold NASCAR races. After acquiring dozens of other banks, NCNB is now Bank of America Corp., the country’s second-largest bank in assets.
Despite its North Carolina roots and long relationship with the racetrack, Bank of America didn’t rev up its NASCAR relationship until last June. That’s when it signed a five-year deal to put its name on a 500-mile race there, beginning this October, and become an offi-cial sponsor at four of Speedway’s other five tracks. In late February, the bank inked a similar pact with Daytona Beach, Fla.-based International Speedway Corp., the other major NASCAR track owner. It also has agreed to sponsor a pre-race TV show this season on NBC and TNT.
Decades after other national companies such as Coca-Cola and Procter & Gamble plunged into NASCAR, the bank plans to spend millions using stock-car racing to attract more customers. Putting its name on what will be the Bank of America 500 is costing an estimated $2 million a year. Sources say it’s spending millions more on advertising during NASCAR races.
But some question whether BofA already has been lapped by the field. By sitting on the side-lines for 20 years, it missed the growth spurt when NASCAR-related merchandise sales increased tenfold and races were started in New Hampshire and California, among other locales. NASCAR’s new eight-year, $4 billion TV deal, announced in December, was less than analysts had expected and caused the share price of Wheeler’s company to fall.
“The question is, what took them so long?” says Larry DeGaris, director of the Center for Sports Sponsorship at James Madison University in Harrisonburg, Va. “NASCAR still has a certain amount of bigotry against it that’s not rooted in fact. There is enough demographic data about the sport that has come out that should have caught people’s attention.”
Financial-services companies have always put their primary sports-marketing focus on golf and tennis, sports favored by upscale customers. BofA had recognized part of NASCAR’s growth potential as early as 1993 when it set up a division to manage money for professional athletes such as driver Jeff Gordon. “What corporate America is waking up to is that there are a lot of people who like nothing better than to spend the weekend at a track,” says Paul Swangard, a University of Oregon professor who teaches sports marketing.
Racetrack owners for years had approached BofA and other banks about sponsorship deals without getting much interest. Wheeler thinks he knows why. “The tracks tended to be underfunded, and banks don’t like underfunded things.” In 2001, the Concord track finally struck a six-figure deal — with RBC Centura, which has a Canadian parent — to be its official bank.
Wheeler attributes BofA’s changed mindset about NASCAR to one person — corporate marketing executive Cathy Bessant, who has been leading Charlotte’s efforts to win the NASCAR Hall of Fame. A Michigan native who grew up around racing, she became the bank’s top marketing executive in 2001. “What Cathy saw is what those of us in the business knew, that those people in the grandstands are working people and they have checking accounts and borrow money and they pay it back,” Wheeler says. The bank declined to comment about its NASCAR strategy.
Also pushing BofA to understand the benefits of NASCAR marketing was its $35 billion acquisition last year of MBNA. The credit-card company has had its name on a race at the Dover, Del., track for years, sponsored a car and issued cards adorned with current and former drivers such as Dale Earnhardt, Tony Stewart and Bill Elliott.
BofA also has seen success in its other sports-marketing ventures. It is the official bank of Little League and Major League Baseball and sponsors the Bank of America Colonial golf tournament in Texas every year. It’s also an Olympic sponsor, and studies have shown that people are 33% more likely to bank with a company that supports Olympic athletes. All told, the bank spends an estimated $80 million a year on sports marketing.
According to market research, NASCAR fans are twice as likely as nonfans to purchase sponsors’ products and services — 72% do. On average, they also have a higher income than the U.S. population. For example, 22% of NASCAR fans have an annual income between $50,000 and $75,000, compared with 18% of the U.S. population.
BofA will use its sponsorship at the Concord track to set up hospitality tents and court more business, Wheeler says. He expects the bank to add brochures about the race in its local branches and install ATMs around the speedway as well. “Just their name on the event is going to take this up another step. It’s about as prestigious as you can get from a sponsor standpoint.” There will also be BofA signs throughout the track — and at the other speedways.
But just writing a check to NASCAR doesn’t guarantee a return for any sponsor. For its marketing to be successful, BofA needs to develop a unified theme focused on the experience of the fan, DeGaris says. That means coming up with promotions such as sweepstakes or coupons that will make fans want to bank at its branches. “They know that they will be successful. They are approaching the sport in a very deliberate way and creating assets.”
As for Wheeler, he believes that the banking industry fully understands the benefits of doing business with NASCAR. His company has a $250 million credit facility from a consortium of banks. The lead lender: Bank of America.