Cost vs. return key factor in series title sponsorship

According to published reports, the Busch Series is still seeking a title sponsor to replace longtime backer Anheuser-Busch for 2008 and beyond, and while there are still several suitors from which NASCAR can choose, at least one of them said the price was too high.

According to The Sporting News, KFC bowed out of the running to replace Busch beer after emerging as a strong candidate. Company spokesman Rick Maynard said KFC had completed a review of the proposed deal and "while it might have been attractive, it didn't fit into the company's 'spending priorities over the next several years.'"

That's corporate-speak for the price is too high.

While companies like Subway, Dish Network, Dunkin' Donuts and Wal-Mart have reportedly been interested in replacing Busch, there is the little matter of the $30 million price tag NASCAR is asking for the series, second only to Nextel Cup in popularity among U.S. race fans.

What makes it more intriguing, besides the fact that KFC was pretty open about its reasoning, is that it was acting on the advice of Octagon Racing Group, the same company that advised Nextel when it stepped in to take over from R.J. Reynolds' Winston brand in 2003.

When you think about it, $30 million to a company like KFC is really not all that much money. A primary team sponsorship in Cup these days is creeping ever closer to that level right now, and that's just for one car on a top-flight team.

The sticking point seems to be what the company will get for its investment. There's the outlay for the rights to the sponsorship, and then there are related costs like marketing, personnel, signage and more.

There's a difference between series sponsorship and team sponsorship, mostly in scale. KFC has sponsored cars before, most recently in 2004 when the company funded a one-off deal with Dale Earnhardt Jr. in the Busch Series that included KFC partners Long John Silver's and Taco Bell.

Interestingly enough, KFC, Taco Bell and Long John Silver's are part of the Pepsico umbrella.

To help understand why this is a difficult process, you must first apply the economics against the potential for return. (Continued)