What Affect Is The Economy Having On NASCAR?

Jen PrestonSenior Analyst IOctober 19, 2008

Remember a few years ago when we had 54 or so racecars showing up for a typical NASCAR Cup event?

Those days seem to be very much over, thanks to America's poor economy.

"It's a scary time right now," said four time champion Jeff Gordon.  "We see strong teams struggling to get sponsorship.

In fact several teams like Gillett-Evernham, Dale Earnhardt Inc. and Stewart-Haas are having a hard time finding sponsorship for next season, in a land where it costs anywhere from $25 to $30 million to sponsor a NASCAR Spring Cup Car.

About a decade ago, it only cost $4.5 million.

The lack of sponsors has also affected legendary team Yates Racing, who struggled all throughout 2008 to find full time sponsorship.

"The people involved in this from last fall on, we knew what we were going to be up against, and we knew we had the personnel and equipment to go out there and get the job done," former Craftsman Truck Series champion Travis Kvapil told NASCAR.com earlier this season. 

"To an outsider looking in, it might have looked bleak.  But we knew what we had going on inside.  This isn't the Yates Racing team of last year.  This is kind of like a new team.  We've gone through a lot of changes, and it's definitely showing up on the racetrack."

NASCAR's most popular driver, Dale Earnhardt, Jr., is also suffering from the economic crunch.  His JR Motorsports Nationwide Series entry will lose sponsor NAVY at the end of the 2008 season.  Earnhardt says if he doesn't find sponsorship, he'll only enter races he can afford too.  This will hurt driver Brad Keselowski, who will be moving to Cup in 2010.

"You have to be thankful for whatever you get," Earnhardt said.  "A lot of these guys are going to walk around empty-handed next year."

Despite the tough times for the race teams, NASCAR is looking forward, acknowledging the rough patches ahead.

"NASCAR is still the best place to get the most for your investment," NASCAR spokesman Randy Poston said.

"But just like everyone else, we recognize the next eight, 12, 18 months, all companies are going to have to tighten belts and make serious decisions about where they spend their budget and ad money."

Earlier this month, NASCAR tracks were included as a "sweetner" in the 450-page, $700 billion bailout plan signed by President Bush.  It allows motorsports complexes to be treated like entertainment complexes, such as amusement parks, for tax purposes.

That's great, for NASCAR—err, I mean International Speedway Corp.—and Speedway Motorsports Inc. (SMI), but the car owners are still struggling to find those corporate dollars.

With that being said, with so many teams without money- or continuing to search for it- are smaller fields in NASCAR's future?  NASCAR says no.

When NASCAR President Mike Helton was asked about a report this week speculating at a 36 car Cup field and 28 truck Crafstman Truck Series field, Helton had a stern answer.

"First of all it wasn't a report, it was somebody's opinion in the garage area and it was not a NASCAR opinion.  We're not looking at reducing the fields.  If circumstances warranted it, then a field less than 43 cars...a reasonable size field under 43 cars does not, I think, impair the quality of a NASCAR race.  But there is no thought process today to shorten the field of a Cup or Nationwide series or Truck series."

Felix Sabates, minority owner in Chip Ganassi Racing with Felix Sabates, feels differently.

"There is a possibility that eight cars could be gone a year from now," Sabates told Sports Illustrated.  "I've done the math.  And you know what, in the old days we only had 36 Cup cars starting in the field any way, so we'll just go back to a 36-car field.  The only reason NASCAR went to 43 cars is because so many of us want multi-car teams.

"I think by 2010 there could be eight cars here today that won't be replaced.  And you may be shocked who those are.  With all the venture capital companies coming into the sport, they are looking for a return, and if they don't see a return, they will close the doors and write it off."

Whatever happens in NASCAR's future they—like the rest of us at home—will just have to wait and weather the financial storm.

Thanks to the Associated Press, New York Times, Roanoke Times, NASCAR.com, Sports Illustrated and McClatchy for the quotes and stats used in this article.