Chuck E. Cheese Signs First Sports Partnership with Hendrick Motorsport
Chuck E. Cheese is entering its first sports partnership with NASCAR team Hendrick Motorsports, as the entities look to combine their IP to grow their businesses. The partnership will be announced later this morning with terms undisclosed aside from the length being two years, but the agreement includes sharing IP for licensing opportunities with both sides able to benefit from the upside, CEC Entertainment President & CEO David McKillips told SBJ. For now, the restaurant operator has bought no on-track paint schemes — though there will be show cars used in store — but both sides expressed a desire to eventually grow the partnership if the initial results are encouraging. The deal was set up by Hendrick Motorsports’s Peter Landman, who previously worked at NASCAR for 16 years and knew McKillips from McKillips’ prior stints at DC Comics and Six Flags, two companies that either looked at doing, or did, activations with NASCAR in prior years. Activation details include co-branded merchandise, show car appearances at stores and at Charlotte Motor Speedway, integrating the team’s IP within the “Chuck E. Cheese Racing World” mobile smartphone game, digital/social content and promotional contests.
STRATEGIC ALLIANCE: Chuck E. Cheese still has 460 locations in 47 states and 19 foreign countries and territories — and it is spending tens of millions of dollars to newly remodel all of its stores, including one near Charlotte, where the sides will host an event next week. That has provided the impetus for it to increase marketing around its stores again. The show car will also appear at HMS’ fan fest the weekend of the Coca-Cola 600 at CMS. McKillips: “We’ve seen many one-off paint schemes come and go, but this is interesting because it’s looking at a strategic alliance that combines licensing, entertainment and content all together to bring racing not only to a new generation of kids but a different audience makeup; we have such diversity at Chuck E. Cheese and over-index in Hispanics and African-Americans, so it’s a brilliant move by (Hendrick Motorsports Vice Chair Jeff Gordon) in fully understanding where the sport needs to go and introducing it into our world. We have the size, scope and scale where we can do this on a national level in every single major market with over 30 million people every single year coming into our locations.” Dallas-based CEC Entertainment will handle this partnership in-house. Chuck E. Cheese also recently started its own licensing division to better take advantage of its IP and brand equity that it has built up since its founding in 1977.
NEW OPPORTUNITY: Gordon, the NASCAR HOFer, has made it a priority to try to add more consumer sponsors to complement the team’s B2B brands since he took on the Vice Chair role last year. Gordon: “To think of the themed birthday parties in there that will have Hendrick Motorsports-branded stuff and tied to our race team and know that kids are going to be having a good time at the stores like that all over the country, it’s just another way of how you promote and build your brand, relationships and your fanbase, and grow the sport and your company for the future.” McKillips noted that this is the first sports deal in the company’s history and that it could look to strike others in the future but that it’s focused on the HMS deal for now. The ROI will be judged by how many people sign up for national promotions, sales of licensed products and impressions.