NASCAR Economics 101: Sponsors Struggle In Economic Crisis

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NASCAR Economics 101: Sponsors Struggle In Economic Crisis

According to the U.S. Department of Labor, all fifty states reported a rise in unemployment- in fact, it was the first time since 1976 that every state saw a rise.

With sponsors like Sprint, Home Deport and Catepillar laying off people, will they be forced to leave NASCAR?

More NASCAR supporters have recently announced impending layoffs.

Best Buy, sponsor of Elliot Sadler's No. 19 Dodge, is expected to announce an unknown number of layoffs, after a buyout last year didn't have enough takers.

Juan Pablo Montoya's sponsor Target is also expected to cut 600 people, and 400 more could be let go or suffer a paycut.

Today, the United Auto Workers (UAW) announced that they will end their "job bank", which pays workers even if they aren't working. This is a government provision for General Motor's government bailout.

AT&T, Jeff Burton's former sponsor, announced that net income has fallen a whopping 23%.

Things are equally bad for NASCAR's home state of North Carolina. With over 600 NASCAR crew and shop members being released, unemployment in the state has reached 8.7%, and paying unemployment benefits is set to add to a growing $2 billion deficit.

“Shocking and sobering is the way I would describe today’s news,” North Carolina State University economist Mike Walden said.

In better news for NASCAR, Craftsman has resigned to be the "Official Tool of NASCAR". This agreement will last through 2013.

We’ve enjoyed a long and successful association and we look forward to building on the heritage of Craftsman in NASCAR," said Mike Cassar, Craftsman brand manager. "NASCAR shows trust in our tools and that parallels the loyalty our customers have shown in making Craftsman their trusted brand of choice."

In light of the severe economic situation, NASCAR CEO Brian France has issues a hiring freeze and has suspended bonuses for executives.

"We're trying to do more with less. That's the difficult part of this economy," France said following his state-of-the-sport address to media at NASCAR's Research and Development Center. "It's internal, but we've instituted some things that we're trying to be responsible with our financial issues."

NASCAR is also helping teams develop better business models, and a four person "industry marketing" team is helping teams secure sponsorship.

"They're out in the marketplace trying to help the teams secure sponsorship," chief marketing officer Steve Phelps said. "They're out trying to help the teams create packages that will be meaningful for sponsors that are looking to get into our sport. And they try to create meaningful points of difference from team to team, driver to driver, that create something special that that sponsor might look for. It's more important what they do now more so than any time in its history based on the difficulty in the economy."

Currently, several teams are without full time sponsorship, including Martin Truex, Jr., Aric Almirola, and Ryan Newman.*

Thanks to MSNBC, The Business Review, Jayski, WRAL 5 out of North Carolina, and CNN for the statistics and quotes used in this article.

*These are based on JaysAccording to the U.S. Department of Labor, all 50 states reported a rise in unemployment. In fact, it was the first time since 1976 that every state saw a rise.

With sponsors like Sprint, Home Deport and Catepillar laying off people, will they be forced to leave NASCAR? More NASCAR supporters have recently announced impending layoffs.

Best Buy, sponsor of Elliot Sadler's No. 19 Dodge, is expected to announce an unknown number of layoffs after a buyout last year didn't have enough takers. Juan Pablo Montoya's sponsor, Target, is also expected to cut 600 people, and 400 more could be let go or suffer a pay cut.

Today, the United Auto Workers (UAW) announced that they will end their job bank, which pays workers even if they aren't working. This is a government provision for General Motor's government bailout.

AT&T, Jeff Burton's former sponsor, announced that net income has fallen a whopping 23 percent.

Things are equally bad for NASCAR's home state of North Carolina. With over 600 NASCAR crew and shop members being released, unemployment in the state has reached 8.7 percent, and paying unemployment benefits is set to add to a growing $2 billion deficit.

“Shocking and sobering is the way I would describe today’s news,” said North Carolina State University economist Mike Walden.

In better news for NASCAR, Craftsman has resigned to be the "Official Tool of NASCAR.” This agreement will last through 2013.

We’ve enjoyed a long and successful association and we look forward to building on the heritage of Craftsman in NASCAR," said Mike Cassar, Craftsman brand manager. "NASCAR shows trust in our tools and that parallels the loyalty our customers have shown in making Craftsman their trusted brand of choice."

In light of the severe economic situation, NASCAR CEO Brian France has issues a hiring freeze and has suspended bonuses for executives.

"We're trying to do more with less. That's the difficult part of this economy," France said following his state-of-the-sport address to media at NASCAR's Research and Development Center. "It's internal, but we've instituted some things that we're trying to be responsible with our financial issues."

NASCAR is also helping teams develop better business models, and a four-person "industry marketing" team is helping teams secure sponsorship.

"They're out in the marketplace trying to help the teams secure sponsorship," chief marketing officer Steve Phelps said. "They're out trying to help the teams create packages that will be meaningful for sponsors that are looking to get into our sport. And they try to create meaningful points of difference from team to team, driver to driver, that create something special that that sponsor might look for. It's more important what they do now more so than any time in its history based on the difficulty in the economy."

Currently, several teams are without full time sponsorship, including Martin Truex, Jr., Aric Almirola, and Ryan Newman.*

Thanks to MSNBC, The Business Review, Jayski, WRAL 5 out of North Carolina, and CNN for the statistics and quotes used in this article.

*These are based on Jayski's Silly Season chart. For more, go to http://www.jayski.com/pages/2009teams.htm
ki's Silly Season chart. For more, go to http://www.jayski.com/pages/2009teams.htm

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