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NASCAR ANNOUNCEMENT

December 1, 2016

THE MODERATOR: Good afternoon, everyone. Thanks for joining us today for what is a landmark business announcement for NASCAR. Welcome to all our fans on NASCAR.com and Facebook Live. Appreciate you tuning in here with us today. Joining us at the front will be Vice President of Sports Marketing for Monster Energy, Mitch Covington, Chief Marketing Officer for Monster Energy, Mark Hall, NASCAR's Executive Vice President and Chief Global Sales and Marketing Officer, Steve Phelps, and NASCAR Chairman and CEO Brian France.
Brian, I thought we'd kick it off with you in terms of making this announcement.
BRIAN FRANCE: Well, not only is it one of the most important announcements that we get a chance to make every once in a while, it's particularly nice to have our whole industry together because this is a partnership with Monster that is going to affect us all, and they're going to be a partner that can really‑‑ it's a global brand that we took a long time to figure out. It's one of the few sales calls that I actually personally made because of how important it was to align ourselves with a dynamic brand that reaches different places and different audiences, and they made us feel very comfortable over time on a couple things. One was motorsports is their DNA, and when you walk through their lobby in California, you see that. You see the motorcycles and NASCAR memorabilia and all kinds of things, and that's who they are, so they understand motorsports. They understand NASCAR. They understand how to reach across and excite our core audience and help us deliver on a new audience, and that was very exciting for us.
And then when we got to know the team, we understood that they understand how to execute, too, and you're going to see that at the tracks, every track, all over the place, and they are going to do things that are going to be fun. They're going to be impactful. They're going to be exciting for our drivers and our teams. They're going to do things for our related sponsor agreements from a business to business standpoint, and then we're going to do some things for them, too, because we're going to give them a platform that they've never had before, and they're very excited about that.
Needless to say, this is a partnership that we want to build on over time. It's a very difficult agreement to come to because of the complexities of it, the track component, very important, media component is very important, all had to be sorted out, but nonetheless, we have reached a great spot, and I couldn't be more pleased to share this important day with all of you.
THE MODERATOR: Thank you, Brian, and I'll turn it over now to Mark Hall, if you could give us your thoughts on the new partnership as the entitlement of the NASCAR premier series, the naming rights for the NASCAR All‑Star Race and the official energy drink of NASCAR.
MARK HALL: First off, I'd just like to thank everyone on the NASCAR team. Whenever you get involved in this process, in the negotiations, they can be trying on both sides, and I just have nothing but respect for Brian and the entire NASCAR team for their perseverance and their flexibility in working with what can only be described as a non‑traditional marketing company. They did a great job of meeting some of the requests that we made, and couldn't be happier that we got the deal done.
On behalf of all the employees of Monster Energy Company, I again want to thank you guys. We're really looking forward to a great future together.
I want to assure all of our current fans, our current athletes, the other people that we endorse and have worked with for all these many years, that this doesn't change anything. We're still going to be the same company we've always been. We're not going to look to cut or get rid of people. Kurt, you're still going to drive. (Laughter.)
We view this as a rare opportunity that doesn't come along every day. It's not‑‑ it's two sponsors in 30‑plus years that have been in this position, and if you would have asked me five years ago if I've ever contemplated something like this, the answer would be never in a million years, but it's a rare and unique opportunity to be associated with a premier professional sport, to be closely partnered with that sport, and to work together to build both of our brands, and that's what we‑‑ that's our intent, and we're going to work very hard to do that.
Thank you very much.
THE MODERATOR: Thanks, Mark. We'll open it up to the media now. Just raise your hand and let me know if you want to ask a question of any of these four, directed at them, or at anyone specifically.

Q. For Brian, the R. J. Reynolds relationship was about marketing the sport and get it in places where it had not been before. Sprint was the technology that they could bring. What is it about Monster Energy that makes this the right fit, and also, how does this impact current relationships with like Kurt Busch, who has Monster for a sponsorship and NOS with Kyle and those guys?
BRIAN FRANCE: Well, the last part of your question first, and Mark just said that they're making their relationship bigger, and so that continues. That's been a relationship and a position that they've enjoyed, and that's going to continue.
The reality for how impactful they are and what they can do differently is obviously they're an edgy brand. They're a fun brand. They get at a millenial audience in a different way clearly than we've ever been associated with, particularly at this level, and they know what they're doing. This is their DNA. This is not something they're rolling into, and frankly even Sprint and Nextel before them, this is motorsports and the level of commitment, that was all new to them. That took a while for them to get sorted out, how do you interact with a fan base, how do you activate at the track, how do you do media, how do you do all those things. They ended up being very good at it, but these guys are ready on day one, and even though it's December and a bit late in the game, you know, they have the activation tools, the plans and the people. They do it all in house. They were very impressive when they laid out how they go about these positions in motorsports. So they're ready on day one. They're a fun brand that's going to interact with our core fans in kind of a cool, neat way actually, and we've seen some of the plans, and they'll get bigger and more robust as we go along.
But we're very confident that this is the right partner for us, and we're looking forward to having some fun with it. By the way, we're in the fun business. We're racing cars. We're crowning champions. We're‑‑ this is where people come to have fun, right? Our speedways and watch us on television, what better brand to have associated with us than the people who understand that.
So we couldn't be more excited.

Q. A little twist on‑‑ two different twists on the same question; Brian, how do you believe that Monster‑‑ you called them an edgy image, might change the culture of NASCAR, and Mark, with the other involvements that Monster has had in action sports over the years and so on, how do you plan to distinguish your involvement with NASCAR from those others?
BRIAN FRANCE: Well, let me take that first and then Mark can comment. When I say edgy, I mean fun. I don't mean anything other than that. They're fun. They know how to make a lot of plans, and when you see this unfold, they're going to interact with our fan base differently, at the speedways in particular but all over the place. In market, they've got some robust plans, depending on that. They're going to be the host of the All‑Star Race along with obviously the Charlotte Motor Speedway, and they're going to bring a lot to that particular event as an example.
So they'll do a lot of things in a fun way.
MARK HALL: Yeah, I think, you know, it's not like we're doing anything different. We've been in NASCAR for a while. You know, I was thinking back on the day we got started and how long we've thought about the sport and how we view it for a while. I think it's been nine or 10 years since Robby Gordon was our first foray in there, and I remember it was a great day for me when Robby threw his helmet at some guy because that was the only time I ever got it on camera. I actually called him up and said, Robby, can you do that some more?
From there, we took one of the athletes that have been with us many years, and we have a history of sticking with people. We have athletes that have been with us for 10, 15 and more years. Ricky Carmichael, who had aspirations to drive in the Truck Series, we supported Ricky on that. A lot of people said it wasn't a good idea, that we were not being disloyal to our current fan, and I said, I don't think so. Obviously we found our way into what was then the Nationwide Series with Kyle Busch, and we went at it in a systematic way, and we were able to see the results.
It's gratifying when you spend marketing dollars and you can actually relate them back to revenue, and we think that we have enough experience in the sport to know that when we invest a dollar here that we're going to get some of that dollar back in sales.
Of course we have Kurt driving our Cup car now, and we're excited about that. He made it into the Chase, did a great job for us this year, and so I see this as the logical extension and a rare opportunity, as I said earlier, that happens not too often. And this is no different than some of the other sports we got into. We started in a small way. We learned how to do it correctly and how to make it work in our way, and then we ended up as either the principal sponsor or a primary team sponsor like in MotoGP or something of that nature. We're with Mercedes in Formula1.
To us, this isn't unusual, it's a logical extension of what we started nine years ago, and we're fortunate that this opportunity came around and that NASCAR considered us and that we were able to get the deal done.

Q. Can someone address the terms of the deal, specifically how many years do we anticipate Monster will be the premier series sponsor, and secondly, with the activation you all have done towards millenials at motocross, other entities, what other types of events are you looking at having at the track that are going to bring the kids to the racetrack?
BRIAN FRANCE: Oh, it's a multiyear agreement with some options. We never get into the specifics of contracts, but beyond contracts, our most important thing is to build a good partnership, and that transcends most partnerships. Every partnership we've ever had in this category, which is only two, we always extended and always went on for a long time, and that's our hope here.
MARK HALL: In regard to the activation, we have sort of a unique way of doing things that we've learned over time. The guys managing the company are the same guys ‑‑ that we've all been here 20 years, Rodney Sacks, Hilton Schlosberg and myself have been around since 1997 selling energy drinks. Monster has been around 15 years, and we're still there taking advantage of what we learned.
You know, when you go into a competition, the other team sort of knows what you're going to do, but it wouldn't be smart of me to give them my playbook. We do have some ideas about how we can make NASCAR more attractive to what I would call a different audience than is currently there without detracting from what is already a great audience and a great fan base. Like I said earlier, we have experience with that, and those fans do relate to our brand, and we think there's an opportunity to bring some new ones in, as well.

Q. Have you determined the name for the series yet? Is there an actual name?
BRIAN FRANCE: We are working on the exact composite logo and otherwise, and we'll be back shortly on that. It won't be long, but we've got some real good options on that. Not today.

Q. Mark, since the NASCAR audience is a little bit of an older audience perhaps compared to what you're usually marketing toward, do you see yourself going for those people, as well? I know you talked about bringing the young fan into NASCAR, but will you go after sort of the existing fan base as it is?
MARK HALL: Well, when you say old, you've got to think about who you're talking to. They don't seem that old to me. (Laughter.)
There's really‑‑ there's two answers to that question. Young people set trends in fashion, and then older people adapt, and I don't want to say old. Fashion is set by a small group of influencers. The challenge is to make your product relevant to that group and then have them influence the others. If we've been successful in the past, we've followed that model.
I think we have a lot of drinkers in the current NASCAR fan base. I think we can make the sport more interesting to some younger consumers, as well.

Q. Brian, there have already been reports that this deal is much less than what you were getting from Sprint. Is there any significant adjustments that you'll have to make as far as operating the series if that's true?
BRIAN FRANCE: No, it's a different kind of agreement for sure in that it's got activation in different ways and media in different ways. But we're quite pleased with the agreement, and no, there will be no changes at all. As a matter of fact, I think you're going to see some additional activation, additional things that will occur, so this is a more, not less, in that regard.

Q. Brian and Mark, I'm not sure who wants to take it, but how does this impact any sort of marketing toward youth, and do you have any limitations on what you can and can't do?
BRIAN FRANCE: Well, we don't have obligations in that regard per se. I mean, obviously there's a certain approach that we're comfortable with, and we wouldn't be partners with Mark and his team without an understanding of that, and they feel the same way. They're very respectful, by the way, because they know the heritage of this sport, and they know things that we would feel comfortable with and things we wouldn't, and we've actually had no disagreements on that whatsoever. Mark, I don't think we've had one.
MARK HALL: I'm hoping you're going to ask that question one more time.

Q. Do you have any restrictions on what you do as far as marketing because you're an energy drink?
MARK HALL: I mean, our company has standard guidelines about the bottom age at which we market, and that's not inconsistent with what we're hoping to do with our involvement here. It's just really being responsible.

Q. Mr.Hall, in the courtship of this agreement with NASCAR, Monster has such a reach with so many other properties. Can you talk about why NASCAR was the sport you chose to continue to grow your company with, and what benefits do you think in the long run all of the fans of NASCAR will receive?
MARK HALL: Well, you know, because we do market in a non‑traditional way, we do count on our athletes and our endorsers and to a certain extent our fans to do our marketing. One component that our primary competitor utilizes that we haven't is media. They routinely buy traditional television and traditional media, and we never have. We have never created a commercial or an ad. We've done different things that we've been successful getting a lot of eyeballs on, but I think looking at this opportunity and this close partnership to where our names are linked so synonymously, we're thinking that this for us is a way to do traditional media, the reach of the connection and the partnership is going to be unique for us because our names will be closely associated, and every time you say NASCAR, we hope we're going to say Monster Energy.

Q. You just mentioned a couple of minutes ago that outside the NASCAR world you're involved in Formula1. As a title sponsor, your company is heavily involved with the world championship of rallycross. Through this involvement in Europe and also last weekend I saw at the final rallycross world championship Rosario Argentina, you easily kicked Red Bull out of the market. Are you planning to do the same here in America? (Laughter.)
MARK HALL: Are you available for employment? (Laughter.)
I like your attitude about Red Bull.
We're in a competitive industry. To the extent we can get a leg up on our competition, of course we like that. You look at what Red Bull does in Formula1, and I'm not going to say anything negative about a really good competitor, by the way, but clearly they're heavily, heavily invested in that sport. We're doing it in a slightly different way. Happy to have our driver Nico Rosberg win the championship this year. He succeeded our prior champion, Lewis Hamilton. So yes, we like to win and we like to beat our competition.
Do I think this will help? Yes, I think it will.
THE MODERATOR: I'll wrap it up because I'd like to have Mitch comment. Obviously very closely involved in this relationship‑‑
BRIAN FRANCE: David, one thing if I may. I also should have done this in my opening remarks. I want to thank members of the tracks that are here in Marcus, Lesa and John Saunders and many others who are with us today because they rallied to help make this partnership work the way it needs to work, and so did many of the teams, team owners and drivers behind the scenes were helping us try to figure this out together, and as I said earlier, it's a complicated agreement. I wanted to thank all them because without all that, it doesn't matter what NASCAR thinks is important, they have to believe it's important, and they did, and I wanted to personally thank each and every one of them that played a role in that. Thank you, guys.
MARK HALL: I'm going to second that and make one final point. I told my boss I would, and he's probably listening.
There's been some confusion in the media about the ownership of our company. I just want to reiterate that we're an independent company. We have been from the beginning. We're publicly traded. Our symbol is MNST. The Coca‑Cola Company has an investment in our company that any other investor could make. They have actually no day‑to‑day management, the decision to get involved in the NASCAR program and to do this sponsorship was solely ours, and certainly we respect them as our distribution partner, but it's not‑‑ it wasn't them, it was us.
THE MODERATOR: I'm going to draft off of Brian's comments for you, Mitch, in thanking the tracks and teams and the industry. How do you see the activation spreading beyond NASCAR itself to the wider industry?
MITCH COVINGTON: Well, you know, my grandmother told me that it's a sad rooster that won't crow, and we've got some unbelievable athletes that we're going to expose to NASCAR and bring over, worldwide and globally, and we want to make all of our athletes a part of our NASCAR effort and our activation.
We also want to bring some good shows and entertainment for NASCAR fans so they can interact with our brand and understand what our culture is all about, so when they leave the racetrack on Sunday they've had an experience. Of course they will have met the fabulous Monster Energy girls. We're going to have a lot of fun at NASCAR, both in the parking lot and inside the oval.
I too need to thank some people that's done an unbelievable job for our team. Many of you have seen them around, but Cari Cellini has kind of headed up our NASCAR activation ever since the last five years. Probably wouldn't be here if she hadn't done such a good job. Stand up, Cari. I want you to stand up (applause). And Kurt Busch is here today, and I'm going to say it right now, Kurt Busch is absolutely one of the top athletes of any kind that we've worked with ever, and we want Kurt to be around for a long time. I want to thank Kurt. He's done an unbelievable job as a brand ambassador, and he's a pretty good wheel man, as well.
Again, we're really thankful to have the opportunity. We can't wait to hit the red button and see what happens and go hard.
THE MODERATOR: Thank you, Mitch. Steve, obviously you talked to a lot of different brands getting to this one. Give us a little bit of a sense of how you ended up here today with this brand.
STEVE PHELPS: Sure. You know, we had the opportunity to go out and talk to hundreds of brands, actually, and the great thing about having this opportunity which we haven't had in 13 years after our wonderful partners from Sprint and Nextel before them, we got to go out in the marketplace and talk about NASCAR and tell our story, tell the successful things that are happening with our sport, and our sport has changed a lot in that 13 years, and so it gave us an opportunity to speak to great companies. Many of those companies are going to be new to NASCAR, and they're going to bring their dollars to NASCAR, their activation to NASCAR, their brands to NASCAR, to tracks, to teams, to drivers, to our media partners. So that's been a really important thing for us.
I know that the industry was starting to get a little bit nervous about the timing of this. I think the timing is actually perfect. We didn't step on our championship, and what happened, crowning a seven‑time champion. We didn't step on our existing partner, and we were very, very patient to find the right partner, and that right partner is Monster Energy. We couldn't be any happier to have them as part of our team, extend the relationship they have with Stewart‑Haas and Joe Gibbs Racing, so welcome, gentlemen.

FastScripts Transcript by ASAP Sports

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