September 10, 2010 / 1:09 PM / 9 years ago

EXCLUSIVE-3M signs 5-year extension for NASCAR sponsorship

* Multimillion-dollar sponsorship deal runs through 2015

* Adds 3M’s medical and labeling products to agreement

* 3M increasing its marketing of NASCAR sponsorship

By Ben Klayman

DETROIT, Sept 10 (Reuters) - U.S. manufacturer 3M Co (MMM.N) has extended its sponsorship relationship with the NASCAR racing circuit, adding new brands to market under a five-year, multimillion-dollar deal.

The agreement runs through 2015 and follows a five-year deal that ends after this year, said 3M, which makes products ranging from Post-It notes to films used in flat-panel televisions.

“It’s an extension and an expansion to cover a broader range of product categories,” 3M Vice President Mark Fenner said in a telephone interview.

“We see this as an area of opportunity,” he added. “There’s a lot more we can leverage out of our NASCAR involvement.”

The past year has been difficult for the National Association for Stock Car Racing, one of the most popular U.S. sports with an estimated base of 75 million fans, as track attendance and TV ratings have fallen, and companies have in some cases trimmed sponsorship spending.

NASCAR’s TV audience has slipped 1.6 percent this year, according to Nielsen Co, and declining attendance has hurt such track owners as International Speedway CorpISCA.O and Speedway Motorsports IncTRK.N.

The average value of NASCAR race teams fell 10 percent last year, according to Forbes magazine. But sponsorship spending by North American companies on motorsports is expected to rise 2.1 percent in 2010, after the segment’s first decline in 25 years last year, according to IEG, a unit of advertising company WPP Plc (WPP.L).

3M declined to reveal the financial details of the new agreement other than to say it was worth several million dollars a year. NASCAR officials said it was slightly larger in size on an annual basis than the current deal.

“It’s a good deal for NASCAR and a fantastic deal for 3M or they wouldn’t be involved with us in this day and age,” said Odis Lloyd, managing director of NASCAR’s automotive group. “NASCAR is still relevant.”

NASCAR’s auto group has seen sponsorship revenue rise about 5 percent from last year with a higher number of sponsors, although Lloyd acknowledged the number of new deals signed has slowed from five years ago.

NASCAR is 3M’s main sports marketing property and the relationship dates back about 15 years. Its first sponsorship deal was signed in 1999.

In addition to holding numerous officially licensed product categories in the sport, 3M sponsors driver Greg Biffle’s car in the top Sprint Cup series and supports the racing organization’s prize money program.

NASCAR is increasingly important to the company as a way to reach consumers, Fenner said. 3M has seen “incremental increases” in sales of products sold through NASCAR-related promotions, coupons and websites, he said.

The St. Paul, Minnesota-based company plans to increase the amount it spends on marketing the NASCAR sponsorship, although Fenner declined to reveal financial details of that budget. Companies typically spend about 1.4 to twice the amount they do on signing a sponsorship agreement to market that deal, according to executives who track the sponsorship industry.

Types of 3M products covered under the NASCAR deal include auto refinishing supplies, sandpaper, tapes and adhesives, sealants, paint spray products and Post-It notes. It is adding medical products, including bandages, and labeling supplies under the new deal, Fenner said. (Reporting by Ben Klayman; Editing by Steve Orlofsky)

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