Visiting my in-laws for Thanksgiving, I had an entirely new experience from the dozen other times we drove past the Lowes Motor Speedway in Concord, N.C., just outside the Charlotte city limits. Usually, I’m fascinated by all the flashy sponsor ads, a hallmark of the successful NASCAR brand. Now I was seeing these ads with new eyes, the same eyes that had been reading about these megabrands’ huge cutbacks and layoffs. It made me wonder how a NASCAR, so dependent on outside sponsors and the big three automakers, could survive in a recession.
Last week in New York City, the word recession was far from the minds of NASCAR executives as they hosted “Champions Week,” a marketing extravaganza. However, it was there that NASCAR President Mike Helton humbly appealed to its loyal fans to support the sponsors that support this sport. According to Ad Age, there’s not much confidence in the sports marketing arena that this will happen:
- NASCAR added $150 million in sponsorship dollars last year, but does not plan to add any more in 2009.
- 12 out of 42 drivers do not have primary sponsors for the 2009 season, which begins in Daytona in 10 weeks. Sponsors account for 75% of the budget for teams’ business models.
- Longtime sponsors like Eastman Kodak and Sears Roebuck have bailed for the 2009 season.
- TV ratings and third straight year track attendance has fallen 9% from last season.
- 32 of the 42 full-time teams for 2009 drive Chevys, Fords or Dodges. General Motors reduced sponsorship from 12 tracks last year to seven in 2008. Ad Age reports that Ford Motor Co. canceled its pre-banquet party in New York last week, GM canceled its post-banquet party and representatives from Chrysler weren’t even in attendance at the celebration.
NASCAR does have an ace in the hole. As a private, family-owned company, it has more flexibility and control over its future. And just like real estate three years ago, it probably grew too big, too fast and too soon. Some scaling back is not out of order. If it can work with brands and negotiate the astronomical costs of sponsorships, while demonstrating the value of a sponsorship in the changing market, then it has a shot at the same kind of sustainable future the NFL enjoys.
