NASCAR

GM to cut sponsorship of NASCAR

8/28/08 in NASCAR   |   badsam1956   |   0 respect

 On August 19, 2008, General Motors announced that it was going to drop its relationship with NASCAR and other racing venues as a cost cutting measure.1 This leads me to believe that the other manufacturers are also looking to end their relationship with NASCAR. Rumor has it that Ford and Chrysler was waiting on GM to take the initial step. GM is currently spending millions on associated advertisement with NASCAR and isn’t seeing the return on the money spent. The old adage of “Win on Sunday, Sell on Monday,” seems to be completely lost at NASCAR with the new “Car of Tomorrow,” (COT). In a quote from an Adweek.com article by Steve Miller, Auto Ad Executive Peter DeLorenzo said, “I don't think [a cutback in Nascar affiliation] will make a damn bit of difference.” He added that the NASCAR's "Cars of Tomorrow" initiative -- which GM took part in along with Chrysler, Ford and Toyota -- "reduced its brand recognition with the sport to the point that NASCAR is irrelevant."2Does this mean the end of American manufacturers’ involvement with NASCAR? If you’re an advent of racing a true “Stock,” bodied car, you hope the manufacturers will stay with them. So how can NASCAR become relevant again? How will this affect the NASCAR fan? NASCAR has options, but the first thing they need to do is admit they have made a serious error in judgment in a few cases.
 
First on GM’s cutback list with NASCAR is their affiliation with race sponsorships. GM is the official sponsor at 12 of the 22 tracks that Cup races take place. This amounts to millions of dollars each season and would affect the tracks more than it actually would NASCAR. Here we have the Chicken and the Egg problem. What affects the tracks has to affect NASCAR since they require the tracks to run their events. In addition, NASCAR through the France family owns 67% of International Speedway Corp (ISC) and six of those tracks on the cutback list. Such a blow to the track management will be felt all the way to the front office of NASCAR. Items such as race advertising signage, courtesy vehicles for participants and mostly prize money will be affected. So what will be the final outcome of GM’s pullout? On its own, it is a major blow to NASCAR. So what will happen if the other American manufactures drop their sponsorships? NASCAR will have to find other sources of revenue to make up the differences. Toyota has come into NASCAR with a huge presence. Does this mean other foreign manufacturers might be encouraged to participate? It might, as we’ve seen NASCAR is willing to do anything to further filling their pocketbooks, or to admit they made a mistake, at the expense of tradition. So if Honda, Nissan, Kia, Hyundai, BMW, Mercedes, or any other foreign manufacturer shows up with a fistful of money, do you think NASCAR will turn it down? NASCAR’s track record says they will not. So how does this in any way have to do will GM leaving? The loss of brand recognition has a lot to do with it. When a fan looks at the COT, he notices certain parts of the body are the same from car to car, and the only way to tell them apart is the decal on the front that simulates a grill. NASCAR’s attempt to even out the field has destroyed any of the brand recognition the American manufacturers’ desire. It has always been that brand recognition that has kept the manufacturers interested in NASCAR.
 
So how can NASCAR win back the lost sponsorship revenues? NASCAR has made a huge mistake with the COT in deciding what the manufacturers want. It seems very simple to me, go back to what made NASCAR so unique, stock factory bodies. Can NASCAR reinvent itself? I can’t see that happening with the current management and the wayward road they are currently taking. New rules need to be considered, not only attempt in reducing the cost to the race teams, but attempt to modernize the engine rules as well. The out dated mandate to use carburetors and exempt overhead cam engines should be scraped in this era where most manufacturers use fuel injection and overhead cams. The use of pure race engines with no resemblance to current factory offered engines goes completely against the main mantra aimed at the manufacturers, “Win on Sunday, Sell on Monday.” NASCAR had three main goals when they developed the COT. First was the safety aspect over the previous car. In that, respects the COT has been a complete winner and no fan can complain about safety for the driver. The second was cost reduction. By requiring the same body for all venues theoretically, teams can use the same car on a road course, short track, or super speedway. Good idea, but one that hasn’t been realized. Even with the COT, the teams are building multiple cars, each built to compete on one style of track along with a twin backup. This hasn’t reduced the cost much if any. The last goal was to reduce the speed at the super speedways by using a larger, flatter upright nose and windshield. Sadly, this hasn’t worked either. Using tricks learned from racing the larger trucks in the Craftsman Truck Series, and lessons racing the earlier cars, aerodynamic drag is reduced enough to allow speeds as high and in some cases higher than the old car. So, will NASCAR hurriedly build a new car to placate the manufacturers? I doubt NASCAR can, as the first thing NASCAR has to do is admit the COT isn’t completely what they originally envisioned. I have an idea NASCAR. Use the technology learned about safety and put it in a factory body skin. Don’t allow an 850 hp race engine when a closer to factory STOCK 500 to 600 hp engine will suffice. Then the speeds would be back to a manageable range and the manufacturers would have a reason to sponsor you.
 
I’ve found out over the past few years and especially since the advent of the COT that there are NASCAR fans that do not care what car is raced as long as they can cheer for their favorite driver. This is sad for me as I was raised in a brand loyal time of NASCAR history. In those wonderful days, the fans cheered their drivers on to victory, along with their cars. A Dodge or Plymouth fan would find it hard to cheer for a Ford or Chevy driver. Ask Richard Petty what it means to move to another brand. After having a near perfect record with Plymouth, Petty moved to Ford in 1969 in protest over the Plymouth Superbird. Petty was told by Chrysler that Plymouth wouldn’t manufacture a winged warrior like the upcoming Dodge Daytona and that he wouldn’t be allowed to pilot a Dodge the next season since he was contracted to drive a Plymouth. Petty was angered to the point that he left Chrysler all together and switched to a new Ford Talladega. The fans sent Chrysler a ton of mail, encouraging them to do whatever they could to get “King” Richard back. The next season Petty was back in a Plymouth, a newly designed Superbird. Manufacturers pay attention to the fans and how NASCAR is viewed. Now, the fan that doesn’t care about what car their driver is in is part of the sad truth as to why GM is leaving. Brand loyalty is a major contributing factor for NASCAR loosing GM. In the past, a driver moving into the upper echelon of race teams were required to sign an agreement not to race another brand of car just like Petty. Even today all the manufacturers have development programs with the leading teams to groom a young driver before he eventually races in Cup. Ford sued Kasey Kahne a few years back when he decided to drive for Evernham Racing instead of joining a Ford team. Development programs will be one of the next NASCAR item cut. What will that mean to the fan? Presently it will have little effect, but in a few years, it might mean that a promising high quality young driver might not be there to replace a retiring driver. Many young drivers will not get the boost they need to make the big show or even make a career of racing.

GM leaving will have a negative effect on all aspects NASCAR. Next on the budget-cutting chopping block will be actual team sponsorships. GM is co-sponsor on many of the Chevy teams and this will be the deathblow to many just barely hanging on. Traditionally Chevrolet has been the least expensive to race as parts were always less expensive. When GM leaves, this will not be the case and most of the small teams are Chevy teams. It is not a big leap to predict seeing much smaller fields in future races. Many of the teams are having financial difficulty and with sponsors going elsewhere with their advertising dollar, those teams will most likely close up shop. Some might try another racing series where the costs aren’t as high, but sadly, many will just cease to exist. GM’s leaving will leave a huge hole that NASCAR might not be able to fill and only time will tell and only the fan will suffer.
 
1: http://www.reuters.com/article/ousivMolt/idUSN1530555620080715?pageNumber=1&virtualBrandChannel=0
 
2: http://www.adweek.com/aw/content_display/news/client/e3ie74041aeb86526bbf1afc93a098d71ff?imw=Y
 
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