Hard Times Show at Tracks, On Cars
With less fans packing the track and fewer sponsors in the game, NASCAR feels the effects of the United States economic downturn.
Teams with four cars have become the rule, and many are striving to reach that goal. Hendrick and Roush already achieved that, and have for a long time. Dale Earnhardt, Inc. merged with Ginn Motorsports to get there. Other teams are moving to that point, with Richard Childress Racing expanding to a fourth team.
However, the sponsorship on the cars doesn't cover all the costs. And even with the supposed reduced cost of the Car of Today, costs continue to skyrocket. Teams invest in five-post shakers, rolling wind tunnels, and other costly R&D efforts.
Teams first went to collaboration, such as engine deals like the Roush-Yates or DEI-RCR. Then came technological partnerships, where teams like Hendrick Motorsports sold their technology to smaller two and three-car teams.
The newest technique to pay for the cost of ownership is to sell it. Gillete-Evernham Motorsports, Roush-Fenway Racing, and Michael Waltrip Racing have all sold stakes of their company to outside investors. Petty Enterprises is rumored to announce their new partner next week, while Yates Racing last year rejected a partnership with Newman-Haas-Lanigan Racing.
These cash infusions are not enough, though.
Looking at the field this year, you may notice that sponsorship is at a premium.
Yates Racing has only partial sponsorship after shedding Mars Brands at the end of the 2007 season. Championship contenders like Carl Edwards and Greg Biffle have three to five primary sponsors throughout the year. In the case of Ganassi Racing, they are placing Target on the #40 until they are able to find a full-time sponsor.
The fourth team at DEI, the #01, has been racing without a full-time sponsor. They occassionally have the Principal Financial Group on the car, and have signed some one-off deals.
When you look at the fields from this year to last, you will notice a large gap. Where the top 35 was crucial in many situations last year, we are now entering a stage where only one to two cars are axed after qualifying due to the sponsorship crunch.
Sponsors are moving from smaller teams to bigger teams, as we have seen with M&M's, and will be seeing with General Mills. Yates and Petty get left out, and are forced to scrounge for a combination of partial sponsorships.
In the end, this is what has led to the rise in the super-teams. But its not just the teams that are suffering.
ISC and SMI are buying while property is cheap. Kentucky's track was sold to SMI, joining a previously purchased New Hampshire Speedway. Only Pocono and Dover remain independently owned.
The consolidation of track ownership has helped reduce the cost of running races by reducing overhead and raising advertising dollars. Bigger sponsors are able to be brought in through the relationships they hold.
But ticket and gas prices have not come down, and the numbers have shown it. More fans are staying home and watching their TV.
Ratings for Fox were slightly up from last year, while more empty seats have appeared on the screen during broadcasts. Dover seemed to be the biggest loser here, but even large events like the All-Star Race at Lowe's have suffered from lackluster crowds.
Just like 5-6 years ago, all is not lost. As the economic downturn begins to reverse itself, more companies looking to join the fun will sign deals. The current look of the sport will include more investor buyouts and more technological partnerships. More sponsors will rise as others fall. Fans will return to the track when prices lower back down.
Most importantly, the sport will be stronger than ever. Just stick through this.
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