2009 NASCAR Season In Trouble As Financial Crisis Deepens
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Oct 15, 2008
Sponsors of Nascar, the No. 2 sport on U.S. television after professional football, are slamming on the brakes because of the world’s financial crisis.
General Motors Corp., Chrysler Corp., Sears Holdings Corp. and Chevron Corp. will cut or drop sponsorships next season. Dario Franchitti, the 2007 Indianapolis 500 winner was forced out of the stock-car series by a lack of sponsors.
Teams with family names revered in stock-car racing like Petty, Waltrip and Earnhardt may enter 2009 with unfunded cars. The circuit might even have trouble filling 43-car fields.
“There’s maybe 26 teams that have sponsorship for next year, and five or six that have partial,’’ said Michael Waltrip, an owner and driver who shored up his finances by selling a stake to Fortress Investment Group LLC founder Robert Kauffman a year ago. Waltrip, 45, faces 2009 with only one of three cars fully sponsored. He said he might have to shut down one team.
Waltrip, two-time winner of the Daytona 500, isn’t alone. Dale Earnhardt Inc., founded by the seven-time Nascar champion and now run by his widow, has secured a backer next season for only one of four cars. Financial, automotive and consumer goods companies are balking at paying as much as $25 million to support a top team amid job cuts, seized credit markets and slow spending.
Earnhardt’s 34-year-old son, Dale Earnhardt Jr., faces the prospect of a season without sponsorship for the team he owns in the second-tier Nationwide Series. Nascar’s most recognizable driver hasn’t yet found a company to replace the U.S. Navy as sponsor for his car, driven by Brad Keselowski.
He said he wouldn’t run the car without a backer because of the estimated $7 million it takes to compete in Nationwide’s 35 races.
“The economy is the way it is, there isn’t much you can do about it,’’ Earnhardt said after qualifying for Nascar’s Talladega, Alabama, Oct. 5 race. “A lot of these guys are going to walk around empty-handed next year.’’
Nascar has some support from its $4.5 billion in television contracts that run though 2014, said Dennis McAlpine, president of researcher McAlpine Associates in Scarsdale, New York. Nascar and the tracks split the money from the contract, which is in its second year, McAlpine said. Teams get a share of the television money in race purses.
TV contracts won’t be enough to keep some racing teams on the track as the crisis deepens, he said.
“It may show up in the cars,’’ McAlpine said. “They may not be able to get full fields next season.’’
Cuts in consumer spending caused by the slowdown will make all sports advertising more difficult to sell next year, said Don Hinchey of the Bonham Group, a sports marketing consultant in Denver. That means the top teams are going to have the most success drawing money.
Nascar is looking for a backer for its third-tier truck races after Sears departs next month, and Dodge said in September it will no longer support teams in the series. The racing league still expects to have full 43-car fields in its top Sprint Cup Series races next season.
“We know it’s more challenging than ever,’’ said spokesman Kerry Tharp in Charlotte. “At this point we still anticipate having full fields for next year.’’
