Hotmail
Even drivers are suffering from economic downturn
From the sanctioning body to the track operators, manufacturers, sponsors — or lack thereof — teams have had to slash their budgets.
Even the drivers are susceptible.
Economic fallout
As one of NASCAR's premier drivers, Greg Biffle isn't hurting for cash, but he considers himself frugal. As a result of the recent financial downfall, he unloaded his personal helicopter a few months ago, going back to making the one-hour drive from his home to Charlotte, N.C.
That's a sacrifice Biffle can make. But there are expenses that he and others in NASCAR have to incur because of their jobs.
"It seems like the more money you make the more things you have, so it takes more to operate it," Biffle said. "There are other expenses that we're forced into because of the business. A driver has to go see his sponsor or go to the race shop or go to Sprint. He might have an appearance, then want to visit soldiers at Walter Reed (Hospital), then have to go to (another track). We have to have a plane to make this work. It's no different than the guy that needs a shovel to landscape a yard.
"I'm a small-business owner. I have a motorcoach driver, two pilots and a secretary. We've been affected by the gas crunch like everyone else. And a lot of things you have are financed. I'm dealing with a lot more volatility."
For the show that is NASCAR to go on, fiscal responsibility and collaboration are needed among the sanctioning body, the tracks and the teams.
"The industry needs the cooperation of all that have vested interests in the health of the sport," said Andrew Campagnone, vice president of motorsports for Wunderman, a sports marketing firm that counts NASCAR sponsors Office Depot, Goodyear and Sears Craftsman among its roster of clients.
Fewer conveniences for drivers is just one way in which the economy is affecting NASCAR. Here are some others:
1. Sponsorship money drying up: According to an analysis by The Associated Press, the current business model teams follow calls for sponsors to contribute at least 75 percent of the budget. Getting sponsors to pony up money in the $15 million-$30 million range is difficult even when the economy is great, but during rough times it becomes downright frightening for teams.
"It's a scary time right now," Jeff Gordon said. "We see strong teams struggling to get sponsorship."
Two-time Cup champion Tony Stewart this year signed a deal with Haas CNC Racing which will put him behind the wheel of one of their cars starting next season and make him an owner in the organization.
Previously, the two-car outfit could rely on parent company Haas Automation as a sponsor if necessary, but no team owner enjoys spending his or her own money. Stewart's name recognition certainly helped bring in sponsorship, but if he had been able to forecast how volatile the economy would become, would he do it again?
Around the track
 |
Follow the action:
Watch:
Picture perfect:
Read all about it:
- Dale Jr. would consider racing Indy 500
- Eury Jr.: Split with Junior was needed
- Mayfield won't race at Chicagoland
Analysis:
"Obviously, from the financial side and from the standpoint of attracting sponsors to come into the sport, it probably wasn't the best time," Stewart said. "But at the same time, I think for me, personally, it's perfect timing. I think this is a shot in the arm that I needed. I think the opportunities and timing of being able to get Ryan (Newman) on board and being able to get guys like Darian (Grubb, crew chief) and to be able to get sponsors like the U.S. Army, Office Depot and Old Spice on board, that timing is good.
"A year from now, or a year ago, these opportunities may not have been here. So, as far as getting these ingredients in place, when you look at the big picture and you look at the economic picture, it may not be the best-case scenario. But as far as timing for all these pieces, in particular, it is good timing right now."
2. Partnerships forming: Several team owners have already brought in business partners to help shoulder the financial load. Jack Roush brought in the owners of the Boston Red Sox to transform Roush Racing into Roush Fenway Racing. Ray Evernham brought in Montreal Canadiens owner George Gillett to form Gillett Evernham Motorsports.
Another trend that is emerging is teams combining their operations. One such example is the recently announced marriage between Chip Ganassi Racing and Dale Earnhardt Inc.
The merging of engine shops, which reduces the number of employees needed, is well-established in NASCAR. Richard Childress' connection with DEI dates to shared aerodynamic projects more than a decade ago. The companies merged their engine programs last May and two months ago, Childress lent his 20-year general, Bobby Hutchens, to oversee the competition side of DEI, which was founded by his late friend Dale Earnhardt.
Hutchens left DEI at the end of the season to join Stewart-Haas Racing.
3. Possibility of reduced fields: As the economy eats away at teams' budgets, it becomes increasingly difficult to fill the 43-car fields in the Cup and Nationwide Series and 36-truck fields in the Camping World Truck Series. A number of times this season, Truck Series races have been an entry shy of a full field. Still, NASCAR insists it will not reduce the size of the fields.
4. Job cuts within the NASCAR community: The day after the season-ending Ford 400 at Homestead-Miami Speedway was "Black Monday" in NASCAR. Even before the final race began, some teams notified crewmen that they would lose their jobs.
Before that, more than 100 employees were let go by DEI in preparation for its merger with Chip Ganassi Racing.
Teams that reorganized their rosters at season's end included the Wood Brothers and Petty Enterprises — the two oldest competitors in NASCAR. Roush Fenway Racing, which boasts the only five-car Sprint Cup stable, streamlined its operation. And although Bill Davis won the Craftsman Truck title, he cleaned out his Cup shop.
5. Increased cost-savings measures put in place by NASCAR: NASCAR has maintained that safety and cost reduction are the two biggest reasons for developing the "Car of Tomorrow."
"We believe very strongly that this car will deliver cost savings in the long run for sure," NASCAR chairman and CEO Brian France said before the Homestead race. "In some cases in the short run. We're very comfortable with that, and it will allow us in the future to continue to take cost out of the system, which is what everyone in our industry is trying to do."
NASCAR also announced a conditional ban on testing next season as a cost-saving measure, including elimination of the traditional preseason testing at Daytona.
France said NASCAR is not considering shortening races or contracting the schedule.
6. Loss of support from manufacturers: Let's face it, one of the hardest hit sectors in the economic downturn is the automotive field — particularly the "Big Three" American car manufacturers, all of which are currently involved in NASCAR racing.
Of course, that raises the question: Can Ford, General Motors and Dodge (Chrysler) afford to go racing? Sure, all three manufacturers, along with the fourth car maker in NASCAR — Toyota — say their investment pays off, but will there be a time when manufacturers simply can't afford to race any longer? It happened once before back in the late 1950s.
The manufacturers remained adamant recently that as long as racing is beneficial for them they will stay racing, but it wouldn't be entirely unchartered territory if teams were left with little to no factory support.
7. Slowing ticket sales: Perhaps the No. 1 indicator that the economy is hitting all walks of life — the increase in empty seats during race weekends.
Part of the reason for empty seats was the rise in oil prices during the summer months. While that has changed for the better in recent weeks, other factors such as overall weekend costs have kept some race fans from making the pilgrimage to races.
While the economy and the loss of testing, which helped generate ticket buzz in January, have created big obstacles for track owners, none is going to concede. In fact, some are getting even more creative than usual.
Daytona International Speedway president Robin Braig admitted that ticket sales for the 2009 Daytona 500 are soft. But in order to boost those sales, he expects to put on a preseason festival in January, which drivers will attend, to create buzz for his races. Should Braig's plan succeed, expect to see similar programs at a NASCAR track near you in the future.
The Associated Press contributed to this report
Add a comment
advertisement
