This season certainly has been entertaining from a competition standpoint in all forms of motorsports-from big time to minor league-at racetracks all across the country. But the business end of auto racing has indeed been intriguing and controversial.
Bill vs. BrutonThe ongoing lawsuit between NASCAR [International Speedway Corp. (ISC); NASDAQ: ISCA] and a Speedway Motorsports Inc. (SMI; NYSE: TRK) stockholder over a race date at Texas has plenty of intrigue. SMI CEO Bruton Smith and NASCAR must have more Texas and D.C. lawyers working on this than worked on the tobacco settlement.
What's at stake? At the very least dirty laundry will be aired more publicly than NASCAR could ever have envisioned; at the most, perhaps, a billion dollars.
Barbs have been flying for months. Bill France Jr. dropped the realignment bomb in January, saying race dates may be shifted from tracks that aren't selling all of their tickets to tracks that can (i.e. California, Kansas, and Chicagoland). France says Smith can take a date from Atlanta-usually plagued by bad weather-and shift it to Texas or Las Vegas. Smith says the idea is ludicrous. Meanwhile, legal fees pile up like spent ammunition from the war.
Economics 101Motorsports industry stakeholders are finding out just how the economy can affect the sport. Ticket buyers' disposable income has dwindled since the summer of 2000-along with $7 trillion in stockholder wealth. The middle class 401(k) stockpile was raided by unscrupulous Wall Street analysts who propped up stock prices of companies that either didn't have a balance sheet at all, or faked the one they did have. That, plus the loss of millions of jobs across the country, has slowed ticket sales. But more importantly, corporations have either drastically cut back or no longer dole out tons of cash for race tickets to give to employees.
Companies have scaled back their sports marketing programs to such an extent that the value of a Winston Cup sponsorship will likely diminish. And the Busch Series is indeed in a whole new league. The series has struggled with dwindling fields and escalating costs. Several teams are running the majority of the year on no sponsorship, and on a shoestring budget. This isn't good for the sport, and it's not like this issue hasn't been on the radar screen for some time. Busch feeds Cup. And if you don't believe that then just ask any Cup driver. Over 50 percent of the top 40 drivers in Winston Cup came from the Busch Series.
And where do we get Busch drivers?
Grassroots vs. Prime TimeBusch Series racing is generally fed new talent directly by weekly racing series across the country. Many U.S. tracks are struggling this season with lower fan attendance, declining fields, and higher costs for racers to put on the show. What is unhealthy for Saturday night racing cannot be healthy for Busch or Cup. And the alarm bell is ringing in bullrings across the country as the major television networks are pushing NASCAR to schedule more Cup races in prime time on Saturday nights.