NASCAR's growth over the last decade, bringing more fans to events, has created new concer
Big crowds, a fat television contract, record revenues, and unparalleled equality in the professional sports world all paint a rosy picture for NASCAR this year and beyond. Without a doubt, NASCAR has positioned itself to be the standard to which all other forms of motorsports-including Formula 1-compare themselves.
But NASCAR's continued rise could just as easily stall if a number of issues just below the veneered surface gain momentum. Sponsorship and safety concerns, a new television contract, and driver and societal matters are all simmering issues NASCAR faces as it races full-throttle toward its goals of remaining a major sports entertainment entity and achieving mass cultural acceptance.
Here's a look at five issues on the NASCAR radar-some starting to gain in NASCAR's rearview mirror, others tucked right up under its rear spoiler. A slip in any of these areas could mean a freight train ride to the back.
A study of starting fields for most NASCAR races, whether it's a Nextel Cup, Busch, or Craftsman Truck Series race, indicates a lack of sponsorship among the divisions. The number of cars and trucks with no decals or limited funding is increasing, and that is having an eroding effect on the races.
While the sport has attracted major sponsors in recent years, such as DeWalt and Nextel, s
Unlike organizations in other sports, NASCAR race teams are almost totally dependent upon corporate sponsorship to survive financially. While race purses contribute to the kitty, the fact is even the winning team doesn't break even most of the time when it competes at a NASCAR event. If you finish 43rd in the Cup race at Richmond, for instance, your take is $34,398, including the TV money. If you're a team owner and you look at your annual operating budget for a year and the breakout is $200,000 a race, you just took a big hit if you don't have sponsorship.
The underfunded teams either fold or try to press on as best they can. That leads to sub-par efforts at the racetrack with the bottom third of the field not competing at full strength. Even worse, many teams now work the provisional starting position rules to gain entry into the field and then park after the first couple of laps. These "start and parks" or "field fillers" are taking what money they can to try to get by while not abusing what little equipment they have. NASCAR has pledged to review the provisional rules as well as the possibility of adjusting down the number of cars or trucks that start each race for 2005. The second of these possibilities means even more race teams will shut down.
So how did this sponsorship crisis come about? The spiraling cost of competition has, over the past decade, drastically increased the sponsorship dollars required by Cup teams-from $3-$5 million in 1994, to $15-$20 million in 2004. While the sponsorship dollars are up, some teams have experienced more than a 20-fold increase in the cost of operation in that same decade. More events, more travel, and exotic, high-cost aerodynamic wind tunnel and engine development programs all have contributed to this increase.
Ten years ago, when NASCAR wasn't a marketing machine, "gentlemen owners" annually ponied up three million or so to own a Cup team. There were a lot of teams with sponsorship, but it was still affordable enough that someone could run a team without it. As the cost of competition skyrocketed in the last decade, independent owners went under or sold out as the five- and six-car teams used multiple sponsors and economy of scale to survive.
Meanwhile, the news in the Busch Series isn't much better as sponsorships there have swelled to the range of $3-$6 million. In the Truck Series, a 25-race schedule pares the numbers down to $1.5-$4 million.
Crowded garages and pit roads, particularly at small tracks like Bristol, pose safety conc
Simply stated, the number of companies, or individuals, capable of spending this kind of money for team sponsorship, as well as making the investment in an equal amount or more to promote the association, is shrinking. Simple math reveals that the number of available opportunities decreases exponentially as the cost of sponsoring a team increases.
Many teams this season are employing a "revolving primary sponsor" association in an effort to apportion the rising cost of sponsorship. DEI, Richard Childress, Roush Racing, Joe Gibbs, and Hendrick Motorsports are all running rotating primary sponsors on several of their cars as they try to make ends meet.
Another sponsor-related issue, the new 10-race playoff format instituted this season, has many companies rethinking their strategies. While the playoff might be an interesting twist for the fans and give television ratings a boost, sponsors who have paid millions of dollars for a 36-race season only to see their message get lost when their teams miss the final 10-race title chase are not going to be happy with the new system.
Some sponsors have already hinted they will reassess their sponsorship agreements, focusing on a 26-race campaign, as they become renewable. Future contracts would be structured to provide additional funding only if the team in question makes the playoffs. Beginning in the '05 season, this could result in teams pulling the plug on their efforts because of lack of funding after 26 races, leaving NASCAR with starting fields of 30 or fewer cars.
Some of these sponsorship concerns already impact the quality of events and the teams that fill them. Without more cost-effective competition rules and more sponsor considerations, NASCAR could be ripe for a financial crisis from within that could ultimately cripple the sport regardless of current economic fluctuations.
Since the death of Dale Earnhardt at Daytona in 2001, NASCAR has elevated safety to priority status. In part driven by the demise of the sport's biggest star, and also by heightened scrutiny from the media, NASCAR has made several strides to protect drivers in crash situations. Soft walls, along with new cockpit design and materials, have made race cars safer than ever. On the crew side, however, the safety of the participants in the garage area sometimes falls short.
Practice days at many Nextel Cup, Busch, and Truck Series venues reveal overcrowded garage stalls, as well as narrow and sometimes blocked walkways and drive-through areas. This is especially true when the cars are in long, slow-moving lines for technical inspection prior to the events.
Crewmen are casually dressed, many without gloves or safety eyewear, as they grind, cut, weld, and perform other dangerous duties. Smoking in highly flammable areas has always been and still is permitted in the NASCAR garage area. It is almost unfathomable to think what toll a major fire-in both human and financial loss-would exact at a place like Bristol or Martinsville, where everything is packed together like cordwood, and moving big pieces of equipment out of harm's way would be virtually impossible.
Eliminating smoking may not stop a major fire in a pit area full of flammable liquids and solids. It is, however, a good place to start looking at overall conditions in relation to worker and participant safety.
A more proactive approach in advancing the safety of all the participants, and not just the drivers, throughout the entire weekend is needed. NASCAR and its associated racetracks need to make those decisions now-before a government agency like the Occupational Safety and Health Association (OSHA) decides for them.
Did television and greater sponsor exposure push the Labor Day date for the storied Southe
NASCAR hit the airwaves in 1961 when a filmed segment of the Firecracker 400 at Daytona was shown on ABC's Wide World of Sports. CBS did the first live, flag-to-flag coverage of the Daytona 500 in 1979, and the advent of ESPN gave NASCAR a platform to regularly broadcast its events, beginning in the early '80s. Cable television became a reality for millions of Americans, and by the middle of the decade, NASCAR races could be seen on ESPN, TNN, and WTBS. Along with the network telecasts, the entire NASCAR schedule was on television each week, fueling a growth curve that propels NASCAR today.
Television deals during that time were handled as an independent contract between the track and the network. NASCAR allowed this arrangement to exist until the late '90s when it saw television revenue-sharing models were making tons of money for Major League Baseball, the NFL, NHL, and NBA. NASCAR hit the television jackpot in 1999 when it convinced all the tracks to sell their rights together in a single package. The result was a new television deal with Fox, NBC, FX, and TBS reported to be worth $2.4 billion. Old partners ESPN, ABC, and CBS were left behind. Meanwhile, NASCAR launched its own channel, Speed, which is run in conjunction with Fox Sports.
While the Fox/NBC television association tilted the register for NASCAR and its track owners, it has also changed the sport in multiple ways. The television networks, most notably Fox, were and are determined to get a return on their investments. To do that, NASCAR had to become more sellable.
The first thing out the door was the country music connection. NASCAR has always been proud of its Southern, country roots. The new generation of NASCAR fans that Fox, NBC, and NASCAR wanted to reach, however, were national and global in scope.
The look and feel of race telecasts quickly changed. Telecasts are now spiced with video game-like graphics, MTV-style cuts, and videos driven by rock music and personality profiles. NASCAR programming skyrocketed and is now broadcast in more than 150 countries worldwide in 23 different languages each week. That's a lot of juice pointed squarely at the youth market.
An on-track youth movement, powered in large part by companies looking for young drivers to market products to their customers, has team owners scrambling to hire young, marketable drivers. Meanwhile, experienced, veteran drivers have shuffled off for limited financial and competitive opportunities in the Busch and Truck Series ranks.
The new television accord also changed things for sponsors and potential marketers. Previous NASCAR television associations were considered partnerships, and as such, the announcers and producers would go to great lengths to make sure everyone in the race got multiple sponsor plugs. Acknowledgments and in-focus television were golden to the sponsors.
When Fox became a NASCAR television partner, it served notice immediately that the practice of mentioning sponsors during race telecasts was going to stop. Only companies who purchased advertising time in the telecasts would receive appropriate recognition. On its first event telecast, Fox blurred the sponsors' logos on the hoods of the cars in the pre-race intro package. There would no longer be any glib sponsor mentions from the booth. This was all valuable advertising time, and someone was going to pay.
Fortunately, this nonsense was quickly struck down, but it did lead to some companies-Home Depot, NAPA, Budweiser, and several others-purchasing large blocks of commercial time in the telecasts. That has led some to use the term plugola for the type of sponsor mentions used in today's shows.
Other in-telecast ad ploys, such as in-car cameras, framing the screen, and having an announcer do a VO (voice-over) to the pictures touting the latest sponsor product, are employed to add commercial value to the race. Between the long cautions and the promotions, some televised NASCAR events today seem at times to be little more than wall-to-wall ads with some racing sprinkled in.
Most importantly, television has also changed the landscape of where and when NASCAR races will be run. Television fueled the drive to take an iconic event like the Southern 500-a Labor Day tradition at NASCAR's oldest speedway-and switch it to a Saturday night, prime-time television event at California Speedway. Bright lights and Los Angeles, or rebel flags and Darlington, South Carolina? An easy choice from a marketing standpoint.
When politicians look at a NASCAR crowd, they see votes.
To what extent television will use its influence to shape NASCAR races, schedules, events, and demographics remains to be seen. When NASCAR officials and Fox ended the 2003 Daytona 500 after just 109 laps, some media suggested the network pressured NASCAR into stopping the race out of fear it would delay Fox's heavily promoted 300th episode of The Simpsons. If television ever gets to the point where it is wielding that kind of influence, call home the dogs-the hunt is over.
You can be sure there is already discussion about renewing the current television agreement with Fox and NBC. One recent scenario has ABC and ESPN joining forces with the current players. Ratings, which in the first quarter of this season were flirting with a double-digit decrease from a year ago, will play a big part in who gets what. Whatever the numbers, NASCAR and the television networks are going to be looking to get more exposure and more money for their efforts. There's no going back. It will be an interesting negotiation.
Unlike most professional sports, NASCAR drivers do not have an association (union) representing their interests with their employers. In this case, their employers are the teams for which they drive. Each driver is treated as an independent contractor to his respective team, which then competes in NASCAR-sanctioned events.
Unionization of NASCAR drivers wouldn't be a new concept. In the early 1960s, Curtis Turner led a group of competitors in a push for a driver's union with NASCAR. NASCAR pressure broke the ranks within the group, and the plot failed. Turner was banished from competition by NASCAR, and talk of unionization is rarely, if ever, discussed, at least openly.
After all, convention says NASCAR isn't like other sports, and the drivers don't need a union. Top drivers are wealthy beyond their wildest expectations, with multiple homes, cars, yachts, million-dollar motor coaches, private jets, and helicopters among their personal possessions. Most everything else they need they get for free because of who they are. You can be sure Earnhardt Jr. never picks up a check.
But, for every Earnhardt, Wallace, Martin, and Stewart, there are a couple dozen guys in Cup who don't have all the trappings. Ditto in Busch, and probably more in Trucks. Those are the guys who have noticed where other professional sports performers with representation have leveraged themselves as much as 55 percent of the pie. NASCAR drivers get about a third of that.
In reality, mid-level NASCAR drivers are underpaid by millions of dollars in comparison to their counterparts in professional mid-level football, baseball, basketball, golf, and hockey. A middle-of-the-pack Cup performer with no souvenir income can make $750,000 to $1 million a year. That's not hay, but it's also not $7 million for batting seventh and hitting .231 for the season, either. The comparisons to pro golf, hockey, and basketball are even worse.
Some maintain, rightly or wrongly, that a union would offer all drivers a bigger piece of the financial pie, and an active voice in issues involving competition, scheduling, safety, and retirement funding. As the money in the sport continues to get bigger and NASCAR is treated more as an equal to stick-and-ball sports entertainment venues, the possibility of a professional drivers' association is an issue that looms on NASCAR's horizon.
NASCAR team owner Richard Childress appeared on a live morning pre-race show from California Speedway and spent most of the interview discussing how NASCAR needed to slow the rising costs of competition. He ended a long response on how difficult it is to land sponsorship by saying our economy is turning the corner, thanks in large part to President Bush.
Welcome to an election year, NASCAR style. NASCAR and politics have been interesting bedfellows for some time. Jimmy Carter, a former governor of Georgia, was probably the first president to actually be interested in NASCAR. Ronald Reagan was the first president to actively woo NASCAR voters in large numbers. As fate and fortune would have it, NASCAR's most famous Republican, Richard Petty, won his 200th race on July 4, 1984, at Daytona with President Reagan in attendance. It couldn't have been planned better. They even had a clambake in the garage area after the race, and the following day, NASCAR and President Reagan were on the front page of nearly every major newspaper in the country.
Every president since Reagan, including the current president, George W. Bush, has mined NASCAR for votes, money, and support. Like most major corporations, NASCAR and its participants contribute time and money to supporting friendly candidates. As Americans, it's their right.
This year, however, the stakes are much higher as not only the organization and its hierarchy are a valued target, but "NASCAR dads" have become part of a cherished voter demographic. That's right, everyone-from the corporate types in the suites to Bubba throwing chicken bones and beer cans at Talladega-is a potential vote, and the candidates want every last one of them.
While NASCAR has showcased various politicians and presidents at its events, other major professional sports have preferred to publicly downplay their political affiliations. Aside from the president throwing out the ceremonial first pitch at a Major League Baseball game, most politicians are seen viewing sporting events from a private box, conducting business in private. Few are ever on display for the media as President Bush was at Daytona earlier this year.
The election media, quick to adapt any buzzword, have NASCAR dads at full throttle this year. They have also put NASCAR's politics-mostly Republican and conservative-on full view. Depending upon who wins the election, which is projected to be close, they could have an impact on NASCAR's growth and public perception.
In this presidential year, the politicians are selling to the same people NASCAR does. Given there are 100,000-plus fans (votes) to be influenced at the track and millions at home in front of the television each week, this NASCAR dads euphoria is a pretty big deal. It's also an issue, like several others, that NASCAR will be dealing with as it moves toward 2005 and beyond.