Commentary

Sponsorships getting harder to come by as economic downturn threatens

Cup team sponsorships are hard enough to get in good economic times. If the economy does hit a recession, the implications for NASCAR are serious, writes Terry Blount.

Updated: January 29, 2008, 3:08 PM ET
By Terry Blount | ESPN.com

Securing sponsorship for a Sprint Cup team is a difficult proposition in the best of financial times.

[+] EnlargeDavid Gilliland
Todd Warshaw/Getty Images for NASCARDavid Gilliland's car is sporting plenty of paint during testing. Unfortunately, the Yates Racing entry is painted up in Yates Racing livery and not that of a high-dollar sponsor.

These are not the best of financial times. Most indicators show the economy might be headed for a recession. If corporate profits take a downturn, NASCAR teams will feel their pain.

No sport is affected more by changing economic conditions than racing. Spending millions of dollars to place a logo on a race car becomes an unnecessary extravagance instead of a marketing opportunity.

Sprint Cup could take the biggest hit. Cup is the most expensive form of racing in the country. It takes $15 million to $20 million a year to run a competitive car at NASCAR's top level.

One year ago, NASCAR had more fully sponsored Cup cars than it could get in each race. Toyota's debut meant major sponsors were failing to qualify every week.

By the middle of this season, sponsorship woes could bring back the field-filler predicament of a few years ago at certain events. Teams might show up to make sure 43 cars are in the race -- and draw the guaranteed check for being in the race.

It hasn't reached that point yet. About 35 cars are fully sponsored for this season, but at least 10 teams hoping to run the full 2008 schedule still are looking for enough sponsorship backing to get through the year.

All teams have employees who constantly work the phones and make sales pitches to companies for sponsorship dollars. The tougher the economic times, the harder that job becomes.

It's bad news for a struggling team such as Yates Racing, which doesn't have sponsorship on either of its Cup cars for 2008. Finding a full-time sponsor now is almost impossible.

And for teams with sponsors, keeping those companies around also takes an increased effort. If the contract is up and the team didn't do well, the original investment might seem less appealing than it did when the agreement began.

There are no easy answers, but multiple sponsorships will continue to increase. Split sponsorships are becoming the norm, including Dale Earnhardt Jr.'s new deal at Hendrick Motorsports with Amp Energy drink and the National Guard.

Earnhardt's situation is a little different. These two groups are paying as much for half a season with Earnhardt as they would for a full season with most drivers.

But many teams are forced to accept partial sponsorship deals for a portion of the season because that's all many companies are willing to buy.

For example, a company might agree to a six-race deal as the primary sponsor for $3 million, with the option to pick races that appeal to its demographic. But a team needs five or six of those agreements to get through a season.

Multisponsor arrangements also have an impact on how casual fans identify with a driver. This is especially true for children, who often relate to a driver by recognizing the paint scheme of his car. If the car colors are changing constantly, it's hard to find your guy.

Fans also build up a loyalty to products that have a long association with their favorite drivers. A race sponsorship here and another one there a few weeks later doesn't build that loyalty as easily.

Those are problems a team can live with if it finds enough sponsors to get through a full season. Some teams won't be so lucky.

It's tough in the NHRA, too
Some NHRA teams also are having sponsorship problems heading into the 2008 season.

Pro Stock racer Dave Connolly, who won eight events last year and has finished in the top five in the standings for three consecutive seasons, might not race this year because he doesn't have sponsorship.

Connolly's team is one of several affected by Torco Racing Fuels' suspending its sponsorship program because of health problems for company president Evan Knoll.

But is Ganassi going drag racing?
Indy cars, stock cars and sports cars. Chip Ganassi has made his mark in all three auto racing disciplines, but he may add another one soon.

Ganassi said Tuesday that he is considering making a move into drag racing.

"If I expand to any other form of racing, it will be drag racing," Ganassi said. "I don't have any concrete plans right now. We haven't talked a lot about it lately. I need to look at getting some things off my desk here first, but I'll probably get involved down the road one way or another."

Ganassi praised Speedway Motorsports Inc. mogul Bruton Smith on his plans for the new drag racing facility at Lowe's Motor Speedway. The new track is expected to be completed in time to host an NHRA event in September.

Having a state-of-the-art drag racing facility where most of the NASCAR teams are located in suburban Charlotte could encourage other NASCAR team owners to get involved in the NHRA.

Moving ahead
Petty Enterprises did more to improve itself in the offseason than any other team in Sprint Cup.

First came the difficult decision to leave the historic team headquarters in Level Cross, N.C., and move to the heart of NASCAR's business district in Mooresville, N.C.

The 70-mile relocation to the former Robert Yates Racing shop gives Petty Enterprises a chance to hire more quality personnel.

The biggest new hire was Jeff Meendering, one of the rising stars in the Cup garage. Meendering left Hendrick Motorsports to become Bobby Labonte's crew chief on the No. 43 Dodge.

The team also has a new car chief, Ray Fox Jr. He was working at Yates but elected to stay in the building and work for Petty Enterprises, a clear example of how the move can benefit the Petty operation.

Indy 500 excitement for every IndyCar Series race?
The IndyCar Series will try to add some excitement to qualifying this year by switching to Indy 500-style four-lap average at every oval-track event.

One gut-check flying lap isn't good enough to earn the pole. You have to push it four trips around the speedway.

It's a nice idea that will add a little drama to qualifying, but there's a flaw. In a 20-car field for a 200-lap race, it doesn't make much difference where you start. If your car is fast enough, you'll get to the front quickly, so what's the incentive to risk damaging the car in a four-lap sprint?

Terry Blount covers motorsports for ESPN.com. He can be reached at terry@blountspeak.com.

Terry Blount

ESPN Seattle Seahawks reporter