Even the best economists and top business people can’t predict with certainty where the economy is going – except they all agree “down” is a very safe bet. Nearly every business in the world is re-thinking their long-term strategies, saving cash, putting off investments, and hunkering down for a long storm, even if they are not sure how the storm will look and when it will get here. NASCAR, unlike most other companies, has the luxury of an annual 10-week winter vacation to re-evaluate their business plans but, simultaneously, is in the unenviable position of having few options for cutting costs that don’t cause irreparable damage to the sport.
Unlike previous “bad times,” such as 35 years ago when manufacturers temporarily pulled out, this time the problems will surely be compounded by the sheer size of NASCAR’s footprint and inability to quickly reel-in contracts and commitments. As Dale Earnhardt Jr. told Yahoo Sports this week:
“We have saturated the market with race after race after race. We’re driven by the ability to go make another dollar and make more money and there’s no way we would ever trim it down. I don’t think [NASCAR’s current problems are] all our fault. I think it has a lot to do with a lot of other things going on, like the temperature of the world out there and the economy.”
Maybe Junior was trying to say that NASCAR’s leadership is dealing with the fact that the bubble economy of the last 8 years produced too much of everything we consume from 747’s to strip malls and everything in-between. It has also probably produced too many seats at too many NASCAR races. So while airlines buy fewer airplanes and real estate developers build fewer strip malls, NASCAR too will need to search the toolbox for places to cut back because sponsors, advertisers, manufacturers and most of all, attendance, will very likely drop precipitously.
NASCAR’s leadership has always been respected for making good business decisions and all their moves seemed to always be the right ones – who could argue with near constant growth of sponsors, venues, TV numbers, and fans. But the 2009 NASCAR season might just test the true business acumen of those at the helm of the NASCAR ship because, for the first time in many years, the stars are not aligned in NASCAR’s favor. The sport had already, though recently, stopped growing and, in the coming months, there is a good chance that multiple pieces of the US financial system that directly affect NASCAR’s bottom line are all going to unwind at the same time. The “everything we touch turns to gold” days are over and with such limited choices the best way forward might just be the only way forward.
