Sports Biz with Darren Rovell

Dale Earnhardt Jr.: "Drinking Up" As Coke, Pepsi Trade Places?

Dale Earnhardt Jr.'s Budweiser Racecar

This week, Pepsi  is expected to give way to Coke  as the official beverage of most of NASCAR’s tracks and speculation is that Pepsi will be putting some of the money they would have used for the tracks, to getting its Mountain Dew brand onDale Earnhardt Jr's, racing car hood next year.

If that trade-off really happens, it’s a cinch for Pepsi and a dumb move for Coke. The bottom line is people aren’t fans of tracks or fans of the organization itself (NASCAR). They watch races to see their favorite drivers and they are much more likely to support the brand of their favorite drivers than what they are required to drink at the track.

There is a little issue I have though if the Mountain Dew deal goes through. Since Mountain Dew, like Budweiser , is already such a big brand (it's the nation's fourth best selling soda behind Coke Classic, Pepsi and Diet Coke) if the deal is consummated it's going to be nearly impossible to figure out if Earnhardt will have any effect on sales.

Part of me hoped that if a soft drink brand were going to sign Earnhardt, it would have been Coke. And that Coke would unveil a blast from the past that hasn't been on shelves. That way you could really tell if “Little E” was making a difference.

Like how about Mello Yello? The drink was introduced as a competitor to Mountain Dew 28

Mello Yello

years ago and had a great racing tradition. Its motto was "The World's Fastest Soft Drink" and used a race car driver in its ads. Kyle Petty of course was sponsored by the brand in the early 90s, as was Tom Cruise's character Cole Trickle in "Days of Thunder" had it on his No. 51 car.

On a related note, I'm pretty sure that Earnhardt is going to set the record next year for the most merchandise ever sold by a single athlete in the history of sport. His popularity combined with a potential sponsor and number change will be part of it (and trust me, Mello Yello would sell more than Mountain Dew). The other part is that--for the first time ever--a mainstream shoe and apparel brand (adidas) is going to make a driver's outfit and sell it at retail. Reebok looked into getting into the sport in the late 90s, but passed. Puma sponsors Kasey Kahne, but aside from ads doesn't have much of a retail presence and Nike has a deal to make shoes with Joe Gibbs drivers for its low cost Tailwind brand.

It’s easy to see why all the big brands were scared off with NASCAR. Unlike the traditional sports, the shoes aren't really shown since they're in the car with the driver. With no opportunity to display anything, they shied away.

What Adidas will do that no one has done in the past is give NASCAR fans what they really deserve: An authentic firesuit. For too long, fans have had to buy replicas, but I expect adidas to give fans the real thing (it might be $200, but so are authentics from other sports). The alliance will also benefit Earnhardt Jr. plenty because a NASCAR driver has never really had the marketing force of a big apparel brand behind him. He'll now have a greater distribution channel than ever before.

I expect a new wave to come from this as Adidas will prove this to be the next frontier. Unlike the hundreds of millions it has cost adidas and Reebok to have the rights to make the apparel of all the teams in the NBA and NFL, respectively, a shoe and apparel company will can outfit a race team for a fraction of the cost. By 2009, I expect to see more Adidas, Nike and Under Armour logos on firesuits and also expect that, with these deals, NASCAR merchandising will leap into the stores that carry the licensed apparel from traditional sports.

While we're on the subject of what could sell more--Mello Yello over Mountain Dew, for example--I truly believe that Earnhardt Jr. would be best served by starting over with a new number next year. He has had No. 8 long enough so that a move wouldn't alienate fans and a change of number--like Kobe Bryantwhen he changed from No. 8 to No. 24--would serve to prove just how big he is in the sport.

Questions?  Comments?