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Economy affects NASCAR's big night and bottom line
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When accepting the manufacturer's trophy, Chevrolet GM Ed Peeper described that the current economic situation as "the toughest fight of our lives." Chevrolet teams have already felt the pinch. According to sources, budgets for NASCAR's bowtie brigade were cut by 20 percent across the board. Personal service agreements have also taken a hit from drivers that don't connect with the fan base.
Both Chevrolet and Ford cancelled the annual grand receptions traditionally held on awards night and opted for a more fiscally responsible approach.
And the message was clear behind the scenes as well.
"Have you driven a Focus lately?" Greg Biffle asked in the makeshift media room off stage right from the awards show. "I liked driving it better than I liked my Lincoln. It was a small car, light. It doesn't have a big engine but it goes good. It gets great gas mileage and these are all premium products."
Still, talk is cheap and in this economy, devaluing by the second. As much as Joe the fan needs the diversion that sports provide, particularly during tough times, there's very little sympathy for all-star athletes pulling down major coin. But even drivers at the Sprint Cup level are scaling back — within reason. Due to commitments and tight schedules, sometimes flying private planes is a necessity.
Biffle, who sold his helicopter earlier this year, defended the auto CEOs for traveling by private planes, citing the argument that time is money. Biffle did the math. First class round-trip from Detroit to Washington D.C.: $1,000. Making an appointment with Congress on time: priceless.
But seriously, multiply that ticket by eight or so staff members and the price of jet fuel is covered. Anyone that has experienced airport delays completely understands that when Congress calls, one simply can't just pick up the phone and say "my flight was cancelled." And factor into the equation the potential security risks as well.
"It's not fair to crucify someone when they already have the equipment," Biffle said.
Four-time Cup champion Jeff Gordon has enjoyed the NASCAR boon more than any driver in the series. His ascendancy coincided with the sport's popularity. But even in the last year, Gordon has watched sponsors Nicorette and Georgia Pacific slip away. Although National Guard is expected to replace Nicorette, GP was a personal backer. In the 16 years that he's competed on the circuit, this is the first time he's ever witnessed a decline in the economy and the direct result on sponsorship.
"The sport and my career and sponsorships and everything have been on a pretty steep rise for a number of years," Gordon said. "But I'm the type of person that came from very little and can survive on very little.
"This is not a laughing matter. It's tough times. It's something to be very serious about. We not only have to pay attention about raising money and finding companies to do that with, we also have to watch our costs as well and not be exuberant. What happens with everybody, it doesn't matter if you're making millions or thousands, it's all perspective. When it's been escalating up and you get to a year when it's going to take a dip, it gets your attention."
Gordon has discussed the manufacturer's plight and the subsequent effects on the company with his owner Rick Hendrick. He feels that Hendrick Motorsports is strategically diversified enough to continue racing even if that meant moving forward without the assistance of Chevrolet. NASCAR's evolution from common templates to the Car of Tomorrow has provided teams with a vehicle that's generic enough to run the tour with an IROC style platform. But Gordon doesn't blame the loss of cars' identities for the problems facing Detroit.
"That has nothing to do with what's going on with their business and the economy and their customers and their pension plans that have gotten them into the situation they're in, had that not happened," Gordon said. "I really credit NASCAR right now because we have a series that can operate without the manufacturers. We don't want to, but this sport could survive without them.
"I hate to even say that because I know they don't want to hear that and I don't ever want to see that. But where they do play a crucial role is in the engine program and the technology and the parts and pieces.
"What NASCAR did — and I don't think they were looking to the future, I think they were just looking at competition — but right now if we just relied on the manufacturers more so, we would be really, and I'm nervous now and I think I can speak for Rick, we'd be very, very nervous because that would be a huge amount of our income and the stability of the teams."
So what examples are the drivers setting?
While the days of expecting athletes to be role models are waning, the garage can still rely on champions and Chase drivers to provide leadership during dire times.
Unlike other sports, NASCAR drivers are not adopting a "stick your head in the sand" philosophy. Kevin Harvick has already reached out to his owner Richard Childress and offered to take a pay cut if it means maintaining the current level of competition. Richard Childress Racing, unlike most of the organizations in the garage, escaped the layoffs that plagued other companies in November.
"We already had that conversation with him," Harvick said. "I'm sure that Jeff (Burton) and Clint (Bowyer) told him the same thing. If that's what it takes to make it all go around, I think we're all willing to do whatever we have to do. We've had that conversation and that's just the way it is.
"The drivers have been on top of the world for the past several years because there haven't been enough drivers to go around and the teams have had to do whatever they had to do to get the drivers. The owners are back in charge in my opinion."
As a championship owner in the Craftsman Truck Series garage and a driver-operator in the Nationwide Series, Harvick understands the complexities of a racing balance sheet. Harvick the pragmatist jokes that he drives for himself for free "because that's what makes it work."
"I don't think I'm the only that would be in that category," Harvick said. "I think that 90 percent of the drivers are savvy enough unlike other sports to understand from a business standpoint where the world is.
"Sometimes you have to tighten the belt and you have to make sure everything is equally distributed so everyone survives. It can't be all about you because it if is sometimes you'll get left on the boat."
Jeff Gordon, who is listed as the owner of record on the championship winning No. 48 team, agrees with Harvick. It's better to make the sacrifice now rather than go down with the ship.
"The way I look at is that I always say to Rick Hendrick, 'I'll do whatever it takes for us to have the best team we can possibly have,'" Gordon said. "If that means take part of my salary to keep certain people on or to hire certain people, I'll do it.
"Saying that and doing it are two different things. If me and Rick Hendrick sit down and we talk about the position that we're in — obviously I'm not the only one — but I would be open to it."
From a young age, racers are conditioned to understand the importance of sponsorship in racing. Many get a crash course in economics and marketing long before their first NASCAR start. Sponsor relations off the track can sustain a driver long after he's at the top of his game. But there's not another sport that relies on manufacturers to the degree of auto racing.
"You don't see NFL players or baseball players or whatever the case may be standing up and saying we have to help our auto manufacturers do what they need to do or going to their sponsors and saying, hey, what can we do from a business standpoint to make sure that everything is good on your side," Harvick said. "I think our sport is very business savvy and the drivers understand it better."
And a "back to basics" approach is being felt in the motorcoach lot. Starting with the million dollar houses on wheels that drivers call home three nights a week. Jeff Gordon says he felt guilty over the first he bought one. Despite these gas guzzlers averaging around four miles to the gallon, it's become a necessity. For a driver as in demand as Gordon, particularly with a wife and toddler, it would be impossible to maintain essential family time without it.
Greg Biffle says the life of the average motorcoach is four years but he's extending the use of his bus to five seasons. He also switched his high-power gasoline fueled golf-kart to an electric model. Biffle cut back further by using a car instead of a helicopter service to fly out of the track following a race to get to the airport and will forego traveling over the holidays.
When NASCAR decided to hold a fan fest in lieu of testing in January to promote the Daytona 500, he gathered his fellow Roush Fenway Racing drivers and suggested a jet-pool. Spending $5,000 on fuel to fly solo just didn't make sense. Fly commercial? Biffle believes he might be able to get away with that but for a guy like Dale Earnhardt Jr., it would be impossible.
And what about Gordon? When was the last time he flew commercial?
"Last week to Brazil," Gordon laughed and added. "It was first class. I've been waiting for someone to ask me that. Before that it was about 18 months."
Gordon flew commercial to Brazil for International Challenge of Go-Kart Champs, a fundraiser hosted by Ferrari Formula One driver Felipe Massa. Between Gordon's racing, sponsorship commitments and philanthropic endeavors the convenience factor is undeniable.
"I don't have to have jets and all those things but it's something that's been nice," Gordon said. "I'm going to enjoy it as long as I can. I hope the sport and the economy can get through this tough time."
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