The Dale Earnhardt Jr. effect is dead-red in NASCAR
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By Marty Smith
Jul 13, 2007
CIA Stock
Junior carries 30 percent of the total merchandising market. That percentage escalates dramatically in some specific merchandising areas.
This is just the latest testament to the Junior phenomenon, which seems to have infinite depth. The true indicator, it seems, is the annual Joyce Julius report, which measures return on investment for sponsors by applying the cost of a 30-second commercial spot to the total focused broadcast time the sponsor receives.
Get this: Earnhardt won just one race in 2006, yet according to the year-end Joyce Julius report, he garnered more than $183 million in clear, focused broadcast time for Budweiser.
When Earnhardt said he was heading elsewhere, retailers of NASCAR merchandise began canceling orders for Junior gear for fear of being saddled with excess inventory at the end of the year—inventory for which they’d eat the cost if not sold.
Therefore, the production cost from those canceled orders filters back to Motorsports Authentics, which has manufactured umpteen million hats, T-shirts, die-cast replica cars, pup tents, flags, coffee mugs, trash cans, Aunt Betty’s poker visor, toilet paper—whatever it is they make.
Motorsports Authentics, the chief manufacturer of NASCAR merchandise, said Tuesday that it stands to lose between $15 million and $20 million this year, and Junior’s pending defection from Dale Earnhardt Inc. to Hendrick Motorsports is cited as partially responsible.
