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Posted on Fri, Jul. 18, 2008 10:15 PM

Economy not helping NASCAR when it comes to attracting sponsors

About a week after becoming a former Sprint Cup driver when his team was shut down, Dario Franchitti was asked how things were going.

“Not great,” Franchitti said. “It was a big shock that it happened.”

That shock, some around NASCAR are saying, could soon be spreading like crabgrass. Tough economic times have descended upon the American economy, and that spells bad news for a sport that is joined at the hip, shoulders and ankles to the business community.

Sponsorship money for teams, cars and drivers appears to be thinning significantly, some are saying.

Asked last week what he thinks the sponsorship picture looks like right now, Jeff Burton — one of the headier drivers in NASCAR — said, “It’s lean. It’s very lean.”

The finding and mining of sponsorship money has been a race within the racing in NASCAR for decades. Speed, as the saying goes, costs money.

But things are different these days. Money supplies are down for potential sponsors, and the cost of racing is up — way up. It is estimated that the successful teams are spending $25 million a year per car to race in Sprint Cup.

And the situation with Franchitti was different. Having won last year’s Indianapolis 500 and IndyCar championship, and being married to movie star Ashley Judd, Franchitti would appear to be marketable in the extreme.

He also was hired to drive in Cup this year with a high-profile team, Chip Ganassi Racing with Felix Sabates.

Clearly, Franchitti, Ganassi and Sabates didn’t anticipate financing problems when the deal was struck.

“It was a big surprise,” Franchitti said of his team going under. “I mean, I knew the situation and the sponsorship wasn’t there, but it was a surprise to me. I think it was probably a surprise to Chip as well, judging by his tone of voice.”

Sponsorship is, basically, advertising. And during tough economic times, advertising is viewed by business as a place to cut costs.

And that can put NASCAR teams on the spot.

In addition to the problems at Ganassi, some other high-profile teams have had problems attracting sponsorship this year. Teams such as Yates Racing, whose two cars have raced at times this year without corporate support.

Other teams are facing tough sponsorship fights in the coming months as they make plans for next year and beyond. Some very prominent sponsors are rumored to be pondering exit strategies.

The Navy announced recently that it would not be back as sponsor of the Nationwide team owned by Dale Earnhardt Jr.

“I’m not aware of a new major sponsor coming in, and I am aware of a few that are leaving,” Burton said. “That means it’s going to be tough. The economy is down.”

Don Hinchey, vice president of communications for the Bonham Group, a Denver-based sports and entertainment marketing firm, said yes, it is the economy that is reaching down into the NASCAR world.

“The NASCAR (phenomenon) appears to have hit a wall,” Hinchey said.

He said that companies are taking looks at all of their advertising outlays. “They are facing scrutiny from their shareholders,” Hinchey said. “They are looking at justifying their corporate investments.”

NASCAR has been through economic downturns before. Burton mentioned earlier in the decade, when it appeared that there would not be enough entrants to fill 43-car fields.

“I see something similar to that,” Burton said. “I see less full-time teams involved next year. I may be wrong about that, but I know teams are unsponsored and I have a hard way of understanding how they can exist without sponsorship.”


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To reach Jim Pedley, motorsports writer for The Star, call 816-234-4860 or send e-mail to jpedley@kcstar.com

 

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