As automakers face their first major test of the 21st century NASCAR is struggling to recoup from the losses afflicting the Big Three, according to DigitialJournal.com.
Ford, General Motors (through its Chevrolet division) and Chrysler (Dodge) comprised around 75% of the cars in the field in the premier Cup circuit last season, but these days bad news are hitting the stock car market: Chevy says it will cut its motor sports spending (eliminating NASCAR track sponsorships), and Ford will stop commitments next year to the lower-tier Camping World Truck and Nationwide series.
Also, Dodge is dialing back its teams (Chip Ganassi Racing with Felix Sabates’ two cars move to Chevy) and promotions. The spending cuts will reduce each company’s NASCAR outlays by at least 20%.
If companies like GM downsize their commitment to NASCAR, the executives behind the sport will have to woo other manufacturers or welcome independent shops to make an impression on the circuit.
NASCAR is also facing a pinch at the sponsor level. It recently announced that four official sponsors decided to not renew their contract for the 2009 season. Home Depot, Enterprise, Domino’s Pizza and Kodak are decided to leave NASCAR amid budget constraints.
Jim O’Connell, NASCAR’s vice president of corporate marketing, characterized the departures as “companies that are leaving the sport entirely. They all had bad years, earnings-wise, and they’re looking at tighter budgets.”
The reduction going into 2009 leaves NASCAR with 38 official partners (including the four auto manufacturers), about 10 fewer than three years ago.
According to recent news reports, International Speedway, which runs NASCAR, projects revenue to drop from between $780 million and $785 million in 2008 to between $745 million and $765 million in 2009.
But NASCAR shouldn’t be completely down in the dumps this holiday season. It remains on solid footing thanks to its $1 billion-plus TV contract that brings its races to Fox and ESPN, among others. People still want to watch drivers make a never-ending left-turn. And if the auto industry recovers from their recession, expect NASCAR to truly the win the tightest race it’s ever endured.