Posted on 12/09/2008 10:53:03 AM PST by BurbankKarl
Once-unstoppable Nascar is hitting a wall as its fan base erodes, race attendance declines, TV ratings slip, the auto industry implodes and economically stressed marketers slam the brakes on sponsorships. The pileup is so big that Nascar, long held up as the gold standard in sports marketing due to its followers -- fiercely loyal to the sport and its sponsoring brands -- had to lay off 1,000 employees and is fretting over whether it could actually lose money next year.
CEO Brian France, speaking last week in New York at its big year-end promotional event, Champions Week, said Nascar won't see increased sponsorship revenue in 2009 -- a seemingly unthinkable turn of events for a sport that added $150 million in sponsorship dollars last year. "Next year, we will not obviously make that kind of a gain," he warned, then added, "The question is, are we going to back up?"
Of Nascar's 42 full-time drivers, 12 currently do not have primary sponsors for the 2009 season, which begins in less than 10 weeks with the Daytona 500. Primary sponsors pay $18 million to $20 million to be featured as the main logo for all 38 races on a driver's car, such as DuPont does with Jeff Gordon. Running nearly a third of its cars without a major sponsor is a huge problem, since under its team business model, at least 75% of the budget comes from sponsors.
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Old friends And two Nascar marketing staples have left. Eastman Kodak ended a 22-year relationship, while Sears Roebuck, hard hit by the economic downturn and anemic retail sales, decided to end its 13-year title sponsorship of the Craftsman Truck Series after this year.
(Excerpt) Read more at adage.com ...
You simplify the sport too much. You need to go to a race to understand the thrill of 600 screaming horses roaring at you. There’s really nothing that compares to it for a spectator.
You have to remember that NASCAR started as a criminal activity in the South back in the day. Moonshiners were trying to skip the law, so they souped up their Dodges and Chevys to run from the law!
I stand by my statement.
Same thing happens on soccer threads. I've been to a couple of races, but NASCAR is not my thing. But, I don't feel the need to disparage it or its fans. Hobbies and interests are a personal thing, don't know why others feel the need to bag on an interest that does them no harm.
I like NASCAR, but I liked it better before it was a big business. Have you ever read Tom Wolfe’s novel about NASCAR? The same guy who wrote BONFIRE OF THE VANITIES, A MAN IN FULL, ELECTRIC KOOL AID ACID TEST, THE RIGHT STUFF, I AM CHARLOTTE SIMMONS and many other great books, also wrote The Kandy-Kolored Tangerine-Flake Streamline Baby, which has some really great stuff on NASCAR back in the 1960s.
I got into Tom Wolfe when I read the Electric Kool Aid Acid Test (what good acid head did NOT read that book?), and loved it so much I read most of his other stuff.
That part of the article is incorrect since Jeff now has National Guard [Jr's 50% sponsor along with Amp] for 10 races since Nicorette and the other sponsor I can't think of at the moment bailed.
December 7, 2008
By Reid Spencer
Sporting News NASCAR Wire Service
Back in the early 1990s, California-born Jeff Gordon caught a wave.
The four-time Sprint Cup champion has ridden the surge of NASCAR’s popularity to a 37th-place ranking in this year’s Celebrity 100 as selected by Forbes magazine, which lists Gordon’s annual income, including endorsements, at $32 million, a figure Gordon says is overblown.
“Don’t pay attention to what Forbes puts in there,” Gordon quipped after Friday night’s formal Sprint Cup awards banquet at New York’s Waldorf Astoria Hotel. “They add a lot of extra numbers.”
What happens, however, when the currents of fortune turn awry? What happens when a driver with Gordon’s savoir faire, “Q” rating and crossover popularity can’t sustain the upward trend line that has carried him throughout his career.
If you’re Jeff Gordon, you embrace the notion of shared sacrifice, even if that means rebating part of your annual salary to keep your team competing at the highest level. In his willingness to entertain that idea, Gordon is not alone in the Cup garage.
Gordon, who drives the No. 24 Chevrolet for Hendrick Motorsports, understands that the economic problems confronting big-time stock car racing are far more generalized than the specific troubles that have beset U.S. automakers General Motors, Ford and Chrysler and have forced the Big Three to go hat-in-hand to Congress.
“I’m taking a hit regardless of what happens with GM, through some other sponsors and personal endorsements,” Gordon said. “It’s affecting all of us in some way, somehow. •
“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 to raising money and finding companies out there to do that with, but we also have to watch our costs as well and not be exuberant.”
Nicorette, which sponsored Gordon’s car for eight of 36 Cup races, won’t be back in 2009. National Guard, currently on teammate Dale Earnhardt Jr.’s No. 88 Chevy, is rumored to be moving to Gordon.
“We have replaced them,” Gordon acknowledged in response to a question about Nicorette. “I still don’t know why we haven’t announced it yet.”
So, is it National Guard?
“We have replaced them,” Gordon deadpanned, ducking the direct question.
Gordon, however, hasn’t replaced his lucrative endorsement deal with manufacturing giant Georgia Pacific, an indication that times are tough all over, even for the NASCAR millionaires who actor Kevin Costner said at the banquet should send a vote of thanks to Richard Petty, the seven-time champion who pioneered NASCAR’s popularity.
“Georgia Pacific was a personal endorsement of mine, and they were on the car as well, but they were a big endorser, and they’re not coming back,” Gordon said. “I’m one of those millionaires that Kevin Costner talked about, so I’ll thank Richard Petty. But ... it doesn’t matter if you’re making millions or making thousands — it’s all perspective.
“When it’s been escalating going up, and then you get to a year when it’s going to take a dip, it gets your attention — and it’s going to get all of our attention.”
Sponsors, clearly, are critical to the successful operation of a top-echelon Cup team. Gordon acknowledged Friday that his annual salary is roughly a third of the No. 24 team’s annual budget. It takes somewhere near $30 million to operate a championship-caliber team for a year. Do the math.
Gordon is willing to sacrifice salary in lieu of sacrificing performance, if it comes to that.
“The way I look at is that I always say to (team owner) 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.”
Gordon doesn’t apologize for the lifestyle he has earned, but he does admit to pangs of guilt dating to his first purchase of an expensive motor home, an accessory that’s almost a requirement in the Cup garage.
“It’s stupid what we spend on motor homes and planes and all this,” he said. “Do we need that? No. But things have been good for us. The sport’s been good. I’m living this way because things have been very good. Now, obviously, we’re having to cut back, and I have to cut back, too. ...
“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. Listen, I never (got into) this to make millions of dollars. I never dreamed in a million years I was going to make this kind of money. This is ridiculous.
comment from CNBC talking head...
“do you relize that Nascar has a super bowl EVERY WEEKEND?!”
no BIG NAME sponsors but small sponsors still abound.
There’s actually very few drivers that can make money for sponsors........
Dale Earnhardt Jr.’s team change was one of NASCAR’s top stories entering 2008. How did things turn out?
For the year, Earnhardt generated $26.15 million in value for his three sponsors — Amp Energy, the National Guard and Mountain Dew. That’s five percent more than what he delivered in 2007 for his former primary marketing partner, Budweiser.
With Earnhardt’s move, Budweiser put its support (and dollars) behind Kasey Kahne in 2008. It ended up with $11.75 million in exposure value, less than half of what it received with Earnhardt in 2007.....
And the story that may become sad re: Petty Enterprises
http://www.freerepublic.com/focus/chat/2136272/posts?page=193
Sounds like he wants to see the sport continue. He is sharp enough to realize how lucky he has been and he is wiling to make cuts also.
I find a bit of satisfaction in the fact that Richard Petty sold the majority interest in Petty Enterprises to Boston Ventures back in June. Can’t tell me that the Boston folks didn’t have ideas of getting a track built up north so they wouldn’t have to make all those trips to podunk Salisubury, NC which is a big city compared to the crossroads Petty moved out of last year.
I doubt there’s a lender left willing to sink money into a new track at this point in our financial situation.
Yes, I think many of them know they will have to give up a little to continue this sport. It would be a travesty to lose Nascar with all it’s history for so many years.
Besides that, what in the heck will we do on Sunday afternoons or the occasional Saturday night?
I guess I have all my 1000’s of pics to look at, but somehow that’s not quite the same. :(
I’m not a NASCAR super fan. I love IRL racing, because the true skill is passing 4 wide at 200+ mph.
Simply, as a racing fan, I can appreciate it. It’s apples and oranges. IRL has ovals mostly, and like NASCAR, has some road courses.
Ironically, it will be IRL that will survive. I always advocated that we need to return to our IRL roots, that NASCAR is still a neat side show.
This just isn’t the way I wanted it to occur. MORE IRL fans, not less racing fans and less support.
The skill in IRL is as much off the track as it is on. NASCAR, in most cases, has an average full pit of about 17 sec., where IRL is about 8 sec.
It took me years to appreciate racing as a sport. I grew up becoming an NFL fan. I worked on Dolphins stadium when it was built. I knew fellow employees that worked on Danny Marino’s house. I lived to watch Marino do his magic.
My Dad did small time auto racing in Hialeah, FL, back before the Mariel boatlift. He was born in the 20’s, and loved automobiles. I never appreciated racing back then.
It wasn’t until many years later, that I reacquainted with former fellow employees at a company where both my Dad and I worked at, that revived old memories of my Dad’s love of the sport. My Dad had passed on by then, and I began to realize how good a sport it really is.
While our other 3 big sports in America are populated at times with some real questionable characters, auto racing has many commendable athletes, that live a family lifestyle, and are true role models. This mostly is why I advocate the sport. Many of us that don’t like it should give it a second try.
The Obamanation claims another victim.
Thanks Dems; thanks Fannie and Freddie.
There's no business like show business!
Agree! - And most of the "fans" have their own car.
It's the nature of Free Republic. You should have seen the Tour De France threads. It's a sport that I and few other FReepers are passionate about, but the threads were dominated by drive bys who thought they should comment about how silly bicycles are.
I have no interest in soccer, but check those threads sometime. The derision is never ending.
Same reason we pull over to watch car wrecks, I guess.
Not nearly as quickly or as much or as many as the last five years.
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