Patrick, I think your question was answered fairly well by Mike Larson.
With so many other opportunities available there’s very little incentive for someone to take NHRA to court over the exclusivity situation. As I wrote, someone would have to REALLY want the NHRA audience to go through the expense and time of a legal action.
There’s also no particular reason to believe a court would find in the plaintiff’s favor. They could just as easily side with NHRA.
Unless someone like Red Bull wasn’t satisfied with the bang for the buck they’re getting from NASCAR and F-1, the only incentive they’d have for taking on NHRA over this would their desire to go toe-to-toe with Full Throttle.
There’s one situation that probably precludes that kind of action by Red Bull, and that’s their massive market share compared to Full Throttle’s much smaller position in the marketplace. If Red Bull were to successfully challenge the exclusivity clause and sponsor a car or cars in drag racing, would that expenditure of sponsorship dollars result in an increase in product sales large enough to have justified the effort? Probably not, so why go through all the trouble?
It’s sort of like the situation with POWERade and Gatorade. The latter was, and continues to be, umpteen times larger in terms of total product sales than is the former, so they had little incentive to try and overcome the exclusivity clause. They were already so far ahead of POWERade that it probably wasn’t worth their time and energy.
It took less than five minutes to uncover a list of over 55 beverages (not including coffee) that are considered energy drinks by the beverage industry. Many of them, including names like Shark Stimulation and Powerking, I’d never even heard of. Interestingly, some of the brands that used to sponsor cars in drag racing are no longer even listed, which, if nothing else, is an indication of how small those deals, and those companies, must have been.
There’s another issue at play, and that’s how NHRA might handle the forced acceptance of a rival energy drink sponsor. It might not be overt, but I can’t see them going overboard in providing exposure in National Dragster or on nhra.com. While what makes the race telecasts is an ESPN and not NHRA decision, I would think it likely that NHRA would be “suggesting” to the network that the less coverage they provided the new energy drink sponsor, the better.
Of course, if the energy drink in question were to combine their sponsorship with strong advertising support, say on the NHRA race telecasts and even in the pages of National Dragster, all bets are off. There is no way NHRA would turn down advertising revenue in this kind of economy. Count the pages of Dragster now and compare it with two or three years ago. Ad pages are significantly down, and revenue is revenue. Look at NHRA’s recent attempt at raising fees on the Midway and the backlash that resulted. They appear to be desperate for additional money. Ads in Dragster from Red Bull? We’ll take ‘em!
The only scenario I can envision under which someone takes legal action over the exclusivity clause is if a big-name, successful, media-magnet racer comes up with an energy drink sponsor, and that prospective sponsor likes the racer and his program so much that they decide a suit is called for.
BUT, here’s the other side of that. I do know of a racer who fits all the criteria outlined in the paragraph above, but when the racer explained the situation regarding the exclusivity clause, the prospective sponsor walked away instead of fighting. In the corporate world they had to measure the value and costs of that fight against their prospective gains through the exposure that would have been generated, and they obviously felt that the costs outweighed the potential gains.
Jon Asher
Senior Editor
CompetitionPlus.com
