ESPN Sprint Cup

INDIANAPOLIS -- Smiles were plentiful around the display outside of Indianapolis Motor Speedway on Friday as Tony Stewart pulled back a large tarp covering the No. 14 Chevrolet featuring his new sponsors for next season: Office Depot and Old Spice.

There were just as many smiles when Carl Edwards uncovered the Aflac paint scheme that will replace Office Depot as the primary sponsor of his No. 99 Ford next season.

But not everybody in the Sprint Cup, or even Nationwide Series and Truck Series, garage is smiling when it comes to sponsors.

They are feeling the same economic crunch as the fans who pay more than $4 for a gallon of gasoline. Some are trying to compete with $5 million to $15 million less in sponsorship dollars than top teams at Hendrick Motorsports, Roush Fenway Racing, Joe Gibbs Racing and Richard Childress Racing.

The No. 40 team of Chip Ganassi with Felix Sabates recently had to shut down and lay off 70 employees (not including driver Dario Franchitti) due to lack of sponsorship.

Yates Racing, which once had some of the best sponsors in the garage in UPS and M&M's, has run two blank cars while advertising for sponsorship much of the year.

And the crunch goes beyond race teams. General Motors recently announced it will not renew contracts at Bristol Motor Speedway and New Hampshire Motor Speedway as part of a $10 million cost-cutting program.

Craftsman is pulling out as sponsor of the Truck Series a year after Anheuser Busch pulled out of what is now the Nationwide Series.

"It's the worst I've seen, period," Sabates said of the climate of sponsorship in NASCAR. "The economy is bad, and the news media makes it worse than it is. Every time you read the newspaper it's gloom and doom.

"The sponsors are looking at shareholders and their return on investments. They say we paid $20 million last year. We don't want to pay $20 million this year. We actually have had sponsors ask if we could cut the cost, which we did."

The climate is so tough that some wonder if there will be enough quality sponsors to back a full field of 43 cars in the next year or so.

"I would say the climate is cautious," said Jason Garrow, the director of business development at RCR. "Costs are rising. Tracks are looking for entitlement. You have NASCAR looking for official sponsors. You've got teams pulling back a little bit.

"So everybody needs to be concerned. If we weren't in the situation we're in with our drivers [Kevin Harvick, Jeff Burton, Clint Bowyer] running well and [team owner] Richard Childress, we would be concerned beyond a doubt."

RCR actually has prospered by the growing need of sponsors seeking performance to justify an existence in the series. It signed Caterpillar away from Bill Davis Racing and General Mills from Petty Enterprises; both organizations are struggling with one or more cars to stay in the top 35.

Haas CNC Racing, in the same boat as BDR and Petty Enterprises, headed off potential sponsorship problems by giving Stewart 50 percent of the company that will become Stewart Haas Racing in 2009.

Stewart already has brought in Office Depot and Old Spice, and has been connected with UPS, Burger King and Jack Daniels for his second car that potentially could be driven by Ryan Newman.

"It's tough," said Joe Custer, the general manager at Haas. "If you look up and down the garage area, there are more cars that aren't sponsored than I'm used to seeing. That's a reflection on the economy.

"I don't think it's a statement about our sport. I just think the economy is tough right now."

Many believe the tough times will continue and that it will be at least 2010 before sponsors are willing to spend dollars in NASCAR as freely as they once did.

"The 17 years we've been in it, there's been two times in the past, and this may be the third time, that it's been bad," said J.D. Gibbs, the president of JGR. "I remember when 41 cars showed up back in the '90s and again when they announced the Sept. 11 deal.

"Those were the two times when it was pretty lean, and this will be one, too."

"Mad Money"
Jim Cramer, who recently took his high-voltage television show to Lowe's Motor Speedway in Concord, N.C., doesn't believe NASCAR will be as impacted by the economic dip as the rest of corporate America.

During his July 13 special on NBC, the host of CBNC's "Mad Money with Jim Cramer" portrayed the sport as the intersection of Wall Street and Main Street.

"He thinks companies should be running to us," said Jim Hunter, NASCAR's vice president for corporate communications. "He said, any company leaving NASCAR, I'd be critical of their balance sheet."

Geoff Smith, the president of Roush Fenway Racing, reminded that even in critical times companies aren't leaving the sport, and in some cases they are expanding their roles, as Old Spice and Aflac are.

"The significance of that is these companies have realized that NASCAR works and works very well," he said. "That means there has been some serious studying going on as to whether NASCAR works or doesn't work.

"You expect more scrutiny in these times and we have really held up against the scrutiny. That shouldn't be lost in the world at large."

Greg Towles, the motorsports marketing manager for Caterpillar since 1997, agreed.

"The economy certainly has had an impact on the sport," he said. "But those sponsors that truly see the value NASCAR has will stick with it. Right now for sponsors, there are some pretty good values out there.

"In terms of coming into the sport, now would be the time to do that."

At the same time, Towles acknowledged that sponsors want more for their dollar than ever. That's why a company such as Caterpillar ended a long relationship with BDR to partner with Jeff Burton at RCR next season.

Burton is third in the point standing this season and has made the championship chase the past two years. The last time the Caterpillar-sponsored car at BDR made the top 10 was in 2000 with Burton's brother, Ward.

"All sponsors would like to make the Chase and be more competitive," Towles said. "The more competitive you are it just raises the whole level of your program."

General Mills certainly took that approach when it announced it was leaving Petty Enterprises for a fourth team at RCR with a driver yet to be named.

HMS has taken advantage of its success with four-time Cup champion Jeff Gordon, two-time defending champion Jimmie Johnson and NASCAR's most popular driver, Dale Earnhardt Jr.

Over the past five months it has signed five new sponsors in AMP Energy, Bank of America, GoDaddy.com, Adidas and Wrangler and renewed deals with nine other sponsors.

"There's a lot of pride and confidence and maybe even arrogance among these big companies that we don't play second fiddle to anybody," Garrow said.

"Year after year they have to go to their dealers or whoever they work with in selling their race program and a lot of it becomes, 'When are we going to win races? When are we going to compete for wins? When are we going to compete for polls? When are we going to be where the media focuses on us?'

Steve Lauletta, the president of Chip Ganassi Racing, said performance has widened the gap in sponsor dollars more than ever.

And he's not even talking about the $25 million to $30 million top drivers such as Gordon and Earnhardt demand.

"Take out Gordon, Earnhardt, and even Carl Edwards," he said. "Talk about the No. 5 car at Hendrick. Casey Mears probably gets $18 million, $19 million in sponsor dollars. There's a mid-level team on the street right now that is within spitting distance of the Chase that is selling a full season for $14 million.

"So that's a tough place to play. For us, we would be in that $16 million to $18 million that we need to put a competitive car on the track."

Franchising?
Sabates has one word for how to solve NASCAR's financial inequities.

Franchising.

The system of ownership that puts a financial value to a team is engrained into almost every major sports league in North America. In NASCAR Sabates believes it could help owners and sponsors guarantee spots in the field each week and would give potential sponsors the knowledge their money won't be headed home on a hauler after qualifying.

It would mean that owners won't be left with almost nothing after a misstep or two as the legendary Bud Moore, A.J. Foyt and Ricky Rudd were when sponsorship dried up.

"From an ownership standpoint, I was pushing for franchising years ago when I had my teams because, at the end of the day, we spent millions of dollars and had an auction and got 10 cents on the dollar for all of our parts," former driver/owner Rudd said a few years ago. "It was sort of a sad situation because you work, you put all that sweat into it, but it doesn't really get you anything."

Sabates said he submitted a proposal to NASCAR chairman Brian France a few years ago on how franchising might work.

"I'm sure he looked at it for a long time, probably 30 seconds," he said sarcastically. "It can be so simple it's scary."

NASCAR has resisted the concept of franchising, reminding the sport is built around competition, not allowing teams to buy their way into races.

"The reality is that franchising closes off competition, it doesn't increase," France said. "If we thought franchising would add more owners than subtract, would that make the competition better or reward somebody that needed to be rewarded, of course we would look at that.

"It's something I've looked at personally with a dozen different takes on that, but it's something that right now we don't think is in our best interest."

But because costs are so high and sponsors can't foot the bill as they once did, many organizations have been forced to take on financial partners. Not just struggling ones such as Haas. RCR, Roush Fenway and Gillett Evernham Racing all have taken on partners over the last few years.

"If you look at it, all of the teams that have been around for more than 10 years, 80 percent of us have already sold part of it to somebody else," said Sabates, who was one of the first to sell majority interest of his team. "That's because NASCAR doesn't have a franchising system."

Gibbs has accepted that won't happen. So he's pushing for an owner's program that would have a similar result.

"Banks can look at it and see the value to that," he said. "Right now, the only hard assets you have are the building and race stuff. That's it."

Who's the driver?
Custer was among those smiling with Stewart on Friday. While he's had success in attracting sponsors to his team he wasn't able to demand the top dollar it takes to move from a third-tier team to mid-level or even the upper-tier until he landed Stewart.

"Sure, it's easier to justify more money to sponsors," he said. "They get it. They understand a value is higher for a Jeff Gordon or a Tony Stewart. They're willing to listen to a higher number typically because of that.

"If you're not winning races you just can't justify the numbers that a Tony Stewart will bring."

Stewart saw that potential as well.

"The drivers are a huge part of it," he said. "Obviously, the reputation of the whole organization is important, but the driver is the one that's doing those commercials and all that. That seems to me to be where it's kind of shifting gears from sponsorships signing up with organizations to versus now the drivers are being lined up and teamed up with sponsors.

"It's probably more critical now than it's ever been."

Franchitti was supposed to bring those dollars to Ganassi. He had a reputation as a former Indianapolis 500 winner and a famous wife in Ashley Judd.

It didn't happen.

"That shows how tough it is," Sabates said.

It showed Lauletta that sponsors are more conservative than ever in making decisions, taking 12 to 24 months to make a move when it used to take six to eight months.

"We were under the timeline to be ready for this season," he said of the decision to put Franchitti in a car. "Corporate America was not necessarily on the same timeline. They're slowing down."

That's forcing mid- to lower-level teams to be more innovative. Beyond offering deals at a discount price they have to find a driver with a story so compelling that sponsors will want to be associated with him.

They also have to find a driver with Chase potential, which is why Dale Earnhardt Inc. is so intent on re-signing Martin Truex Jr.

"We've been saying for the last three to five years the days of finding the CEO that is just enamored with a sport are long gone," Lauletta said. "The days of, 'Well, they should be here,' are gone. They have been replaced by, 'Why should I be here and how can I justify the expenditure?' "

Sponsors aren't nearly as willing to settle on a driver with a good smile and personality that sells products but doesn't win races as Michael Waltrip has made a living doing.

"You have to be competitive," Smith said.

That's why Haas offered Stewart the sun and moon to leave Joe Gibbs Racing, where he already won two titles.

"It was smart given their circumstance of competitive difficulty," Smith said. "They've made several attempts to hire really good people at really high wages from our organization without any success because it's very difficult to get people if they don't believe there are drivers in place that can do it.

"It's put them in a situation where they're able to show some blue sky."

Garrow agreed.

"You take a guy like that and sponsors are going to say, 'Oh, maybe we want to be a part of this,' " he said. "But it's still going to be important for him to have competitive cars on the track."

Or the smiles could go away quickly.

David Newton covers NASCAR for ESPN.com. He can be reached at dnewtonespn@aol.com.