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Nascar Facing Sponsor Trouble And A Declining Fan Base

Posted in auto industry, Chevrolet, Chrysler, Detroit, Dodge, Fast Cars, Ford, GM, Newsworthy, Politics, Pro Athlete Cars, Racing by Vito Rispo | December 10th, 2008 | 2 Responses |

Nascar, once thought of as bullet-proof in any economic climate, is showing signs of weakness. Its race attendance is starting to decline, ratings are slipping, and most frighting, its sponsors are starting to drop out. Out of Nascar’s 42 full-time drivers, 12 don’t have primary sponsors for the 2009 season, which is only 10 weeks away.

The primary sponsors are the companies with the most prominently displayed logo – on the hood of the car among other places. They pay around $20 million dollars for the whole season. Having one third of its drivers without primary sponsors is a huge problem to say the least, since around 75% of the budget comes from sponsorship.

And on top of the sponsor trouble, Nascar’s losing fans. This is the third season in a row with declining TV ratings and dropping race attendance, the latter of which is down almost 9% from last season.

Despite the recent economic troubles, Nascar itself is flush with cash from previous years. Still, just recently, at Nascar’s marketing extravaganza “Champions Week“, company president Mike Helton directly asked the fans there to purchase more products of Nascar’s sponsors, “I want to ask you, in the time that we’re going through right now, that when you’re out shopping and you’re on a mission to purchase something, consider the sponsors that are involved in the sport if you would, because they’re here because of you and they also play a huge roll in supporting our sport.”

Nascar is the number one sport in the country in terms of sponsorship revenue. Their $3 billion dollars a year is twice the amount that the entire NFL brings in. That’s pretty big, but what happens if the Detroit automakers go under, despite a bailout? It doesn’t matter how much sponsorship revenue Nascar brings in if there are no cars to slap stickers on. In 2009, 32 of the 42 full-time teams drive Chevys, Fords or Dodges. If they go, will Nascar just start racing a field of Toyotas? Will the fans turn to Formula 1 or Rally racing?

Stock car racing is a uniquely American sport, with an American heritage and American cars, so it’d be a kick in the groin to see an oval full of Hondas at the Sprint Cup.

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2 Responses

  1. You know things are bad, when the Toyota teams are also having a tough time with sponsorship. The problem with NASCAR is the people going to the races are the ones who are, by and large, now struggling to keep their mortgages and jobs. These are rock solid middle class folks; and their concerns are coming back to Christmas presents, short term, and school clothes and other family related issues, long term.

    As for the Big Three continuing to race, as what are now being referred to as “bridge loans” go over to the guy on Pennsylvania Avenue, it seems unlikely that the new partners in Detroit’s endeavors will allow racing as part of the program. It happened before, for different reasons.

    In the early Sixties, when people in the Federal government were afraid that GM had too much market share – GM had about 60 percent of the market and one division, Chevrolet, accounted for 75 percent of GM’s sales – GM voluntarily “withdrew from racing.” That last statement has quote marks, since the public stance didn’t stop Chevrolet engineering from helping Texan Jim Hall with his Chapparal race cars; through a skunk works similar to the way the USAF used to build top secret planes.

    Even Chrysler, who did so well with the return of the Hemi in 1964, when it went into Richard Petty’s cars, had to make less of the Hemi engine and make certain to install it in a certain amount of dowdy Plymouth Belvederes, so as to not raise the ire of the Federal government.

    But the insurance companies did in most of the fact, big cars, at least on the street, in the early Seventies.

    Detroit has stayed involved with NASCAR since, mainly to keep a certain profile. It’s why Chrysler put Dodge back in the fray, about 7 years ago.

    But again, sad as it is, the days of the Big Three going neck-to-neck on the NASCAR tracks, may indeed be over. But the Nissan Maxima is pretty hot, right out of the box, and the Honda Accord could be made to race NASCAR.

    This might be the surest sign of economics affecting racing in the classic Austrian School of Economics mold, in the sense that what goes away, will indeed be replaced. Will it be better racing? Maybe not. But it will be different, with one constant: steering in one direction only.

  2. Ernie Blakey says:

    That is because NASCAR has become a traveling weekly show and not a sport any more. Since the good old boys of racing are gone and money got in the way, what did you expect!