NASCAR sponsor wallets are closing as the US economy slides into at least a mild recession; major teams and drivers are scrambling to find the money that they need to succeed in the expensive racing business. A bleak economic outlook is...
NASCAR sponsor wallets are closing as the US economy slides into at least a mild recession; major teams and drivers are scrambling to find the money that they need to succeed in the expensive racing business.
A bleak economic outlook is reflected at Texas Motor Speedway this weekend in more plain paint schemes on race cars, or temporary logos rather than businesses providing full-season support.
Yates Racing, for example, is looking for sponsorship for driver David Gilliland in the No. 38 and Travis Kvapil in the No. 28 Ford Fusions. They even have a Web site for their campaign: SponsorYates.com.
"As a driver who's owned his own team, I certainly realize how much money it takes and what it takes to actually get to the race track each week," said Gilliland. "It takes plenty of support, and right now we've got great support from Ford, and Roush Fenway Racing has helped us out on the technical side. But..we've yet to secure that primary sponsor, and that weighs on everybody's mind."
When companies are shedding employees and closing down production facilities, every marketing and promotion scheme gets a hard look from the cost-cutters. NASCAR may seem like a great way to promote a brand, but ultimately it has to make sense for the bottom line. Skepticism reigns when businesses must shell out $15 -$18 million dollars to be a primary sponsor of a top Cup car in a down economy.
"There's a lot of great prospects out there [for us,] but nothing is done," said Gilliland. "In this deal, the talk is the easy part and the signing on the dotted line is the hard part. Until we get that done, nothing's done."
Added Yates driver Kvapil, "Obviously, the best way to attract sponsorship and get people looking our way is if we're running up front and running in the top 10. That's Todd [Parrott, crew chief] and my number one goal right now, and our engineer and everybody on this team - trying to get that car up front. That's going to be the best resolution for all of our troubles, really."
Good team performance means more visibility for a brand; it makes problems even worse for a struggling team when a sponsor pulls the plug on an organization that isn't doing well. Even years of relationships and loyalty succumb to return on investment (ROI) demands; General Mills will leave Petty Enterprises in 2009 to go to more-successful Richard Childress Racing, after sponsoring Petty since 1972.
Dale Earnhardt, Inc., Michael Waltrip racing and Chip Ganassi with Felix Sabates have all had a hard time finding full, season-long funding for one of their cars. Shared sponsorships between major companies are becoming more common (McDonald's, Best Buy and Stanley share duties at Gillett Evernham Motorsports.) Richard Childress Racing is looking for a Jeff Burton sponsor in 2009 when AT&T leaves the sport. The second-tier Nationwide series also has numerous cars without full sponsorship.
Major changes in high-visibility sponsorships include Anheuser-Busch dropping its title sponsorship of the Busch series (and Coors Light replaced Budweiser as "the official beer of NASCAR.")
Economic news can change, busts can go back to boom, but in tough economic times the racing teams must work particularly hard to keep the accountants happy.