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Non-Tech : The Children's Beverage Group (TCBG) -- Ignore unavailable to you. Want to Upgrade?

To: Chief who wrote (1963)	10/13/1998 2:55:00 PM
From: KSully	Respond to of 2452

"...did we spend over a million dollars already sponsoring a race car..." Calvary Terms of the Wal-Mart/TCBG co-sponsorship of Team Cheever, to my knowledge, has never been disclosed. As stated in the press release "...announced that in recognition of the Children's Beverage Group's commitment to produce its unique no-spil, patent pending straw in the pouch fruit drinks for Wal-Mart...under the Great Value brand, it will co-sponsor the team Cheever race car for all Indy Race league events for the 1998-99 season, currently driven by Robby Unser." My read of the Press Release is that TCBG was extended co-sponsorship on behalf of Wal-Mart and at the expense of Wal-Mart in a undisclosed agreement to use the TCBG package. I'm not aware of any out of pocket expenditures in regards to TCBG with respect to the co-sponsorship. This does not mean to imply that there are no expenditures. So let me inquire - does anyone have hard evidence of TCBG expending monies on any co-sponsorship with Wal-Mart? Was anything stated in the Conference Call? Was anything ever stated by IR? Other sources? The Unser comments do not surprise me. Although the Press Release stated "1998-99 season", it should be noted that "season" is singular - not plural. My read of the sponsorship is the 1998 racing season up to the first of the year. In the area of IRL sponsorship - a closer look at the IRL reveals some serious underlying concerns/problems. Outside of the Indy 500, the IRL is suffering big time. Attendance is very low. Another aspect of Indy Car's is the hard to see logo's on television broadcasts. NASCAR has logo's on the hoods that are much more visiable. A camera on top of the grandstands can pan down over the field and one can still make out the logo's. With Indy Car's, logo's are much smaller and more difficult to make out "unless" a camera is focusing down on one or two cars. Indy Car's are also mechanical nightmares. They have the speed and I find open wheel racing exciting. The engines, however, are temperamental. Very sensitive machines where a lot more can go wrong and where a lot more does go wrong. Engines blown and DNF's in the IRL compared to NASCAR are factors sponsors look at closely. If the car is in the garage, than there is no air time on the logo. In regards to Nascar, DNF's are usually the result of accidents. Although no true racing fan/driver wants to see and or have accidents. The bottom line is that this does result in added air time as those segments are usually repeated on the local news. Once again, compare an indy car crashing to that of a stock car crashing. One can still make out the logo most of the time on a stock car. TCBG was able to garnish a co-sponsorship out of Wal-Mart in whatever deal they agreed upon to use the TCBG package. There too the terms are undiscosed. In the Atlanta race, Wal-Mart was painted on the fin. In the Vegas Race, BrainForest was painting on the fin (fins and or tails). The word on Wal-Mart from many stock analysts is that they are cutting costs across the board. If there was a co-sponsorship agreement originally embarked upon for the 1999 season - it would not surprise me one bit if this was under review for possible cost cutting. In addition, lets think about this. We know that TCBG had no product on the shelves during the 1998 IRL Season. As such, there was no product promotions that could take place. Think about it. Wal-Mart didn't have any product on the shelves either. As such, there was no product they could promote either. This was from the get go when one considers that the Great Value Brand wasn't to be introduced until the Fall after the end of the IRL season. As such, TCBG was promoting the package - not a product. Should a co-sponsorship extend into the 1999 IRL Season - it is my best guess that it will no longer be the TCBG car. Instead, it will be the Great Value car. As for TCBG, they will get the spots Wal-Mart got during the 1998 season. All things said, the co-sponsorship made no sense. Why would either Company embark upon a sponsorship when neither had a product to promote? Someone flipped the bill. As such, one can only conclude that this was Wal-Mart and that doing so was a part of the agreement to use the TCBG package. Given that no other accounts have been announced outside of Winn-Dixie that was agreed upon prior to Wal-Mart (can someone correct me on this) - then one must conclude that this was an exclusive agreement. If exclusive - for how long? Must TCBG wait until Wal-Mart is on the shelves where they are the first to introduce the package before TCBG is able to embark upon other manufacturing agreements - competing drinks? Evidence points to this. One, there have been no new manufacturing agreements embarked upon/reported. Instead, there has been BrainForest (TCBG Brand) and a unsolicited offer to buy Juicy Juice (ie: potential other TCBG Brand). Under the Wal-Mart agreement - is TCBG only able to pursue Company Brands for the time being? In regards to Winn-Dixie, did not this agreement take place prior to Wal-Mart and as such, is excluded from any exclusive agreements drawn? Anyone else with some thoughts? I'm getting the impression that Wal-Mart and TCBG enterered into an Exclusive Agreement. If so, for how long? KSully