Dale Earnhardt Jr.'s endorsement dollars don't compare to Tiger's and Peyton's, but his new sponsorships are a big deal for NASCAR.
NEW YORK (CNNMoney.com) -- In dollar value, the sponsorship deals for NASCAR driver Dale Earnhardt Jr. announced this week might seem like nothing special for the world of sports.
Dale Jr.'s deal to have a split sponsorship with Mountain Dew's Amp energy drink and the Army National Guard is believed to be worth about $25 million a year, although the money from that deal is for his new race team and won't all go to him.
LeBron James inked a bigger deal with Nike (Charts, Fortune 500) before he signed his first NBA contract. Phil Mickelson is estimated by SI.com, which like CNNMoney.com is owned by Time Warner, to quietly be making $47 million a year from endorsements even though you rarely see him on a commercial outside of a golf broadcast. Teenager Michelle Wie is pulling in an estimated $19.5 million in endorsement dollars -- and she has yet to win a tournament against either men or women.
But I'd argue that Dale Jr.'s sponsorships are more significant than those for almost any other athlete. And that's great news for soft drink giant Pepsico (Charts, Fortune 500), which makes Mountain Dew Amp. Here's why.
Fans of NASCAR drivers are far more loyal to sponsors than they are in any other sport.
About 277,000 tuned in to watch the press conference for Dale Jr.'s sponsorship announcement on the Speed Channel. That's almost as big an audience as the network got for its recent coverage of a NASCAR truck race on Sept. 15. More than 200,000 more logged on to watch the streaming video of the announcement on NASCAR.com.
It's tough to imagine even the most devoted fans of Tiger or Peyton taking time to watch a press conference for their next endorsement deal. But for NASCAR fans, the sponsor becomes a big part of their favorite driver's identity.
Dale Jr.'s deal got so much attention not only because he's the sport's most popular driver, with roughly a third NASCAR fans to call his own by some estimates, but because it's rare for a marketing superstar to essentially become a free agent this way.
When he announced earlier this year he was leaving the team started by his late father, it opened the door for him to end his relationship with Budweiser.
Anheuser-Busch (Charts, Fortune 500) could have followed him to his new race team. But the price tag got so great, the company decided to go in another direction and spread their sponsorship dollars around the sport more widely. It announced Tuesday that it will be the sponsor for Kasey Kahne.
But Pepsi, which already had a secondary sponsorship with Dale Jr.'s new team, was thrilled to step up with the dollars.
"Six months ago, it seemed like there was no possibility something like this could happen," said Ralph Santana, vice president of sports media and interactive marketing for Pepsi. "Then all those dominos began to fall. It was like hitting the lottery."
One soft drink industry expert predicted that the sponsorship could give a big boost to Pepsi.
John Sicher, editor and publisher of trade publication Beverage Digest estimated that Amp has about 5 percent of the rapidly growing $5 billion energy drink market. That puts it far behind Red Bull, Monster and Rockstar.
This sponsorship could help lift the Pepsi product to the next level, and also give a lift to its Mountain Dew brand as well.
"I think that using Dale Jr. is likely to create a great deal of consumer attention and from the right kind of consumer," Sicher said, referring to the mostly younger audience that drinks energy beverages..
That's also good news for Dale Jr. and NASCAR. His fan base skews a bit older than the traditional driver, partly because he essentially inherited an overwhelming percentage of his father's fans after Dale Earnhardt, Sr. was killed at the Daytona 500 in 2001. Given Dale Sr.'s age and time in the sport, it was natural that he had an older fan base than his son.
But for Dale Jr. to increase his popularity, it's going to be by attracting younger fans. And that'll be good not just for him, but for his sport, which despite being a television ratings powerhouse, is having trouble getting teens to tune in.
Only 3 percent of NASCAR's audience is between the ages of 12 and 17, according to Nielsen Sports Marketing, an arm of the television rating service.
"For all the good things that Budweiser was for Dale Jr., it absolutely handicapped him in the way he could be marketed to youth," said Mike Bartelli, senior vice president of motorsports for sports marketing firm Millsports. "There is no more youth friendly brand than the Pepsi. Both directly and indirectly, this will help him build his brand among the younger consumer."
Finally, Dale Jr.'s deal with his new team, Hendricks Motorsports, is giving him a bigger slice of the sponsorship pie than he was able to get from the team started by his father and controlled by his stepmother. That was the reason for his switch, and it's a lesson not being lost on the sport's other marketing superstars, for sure.