Sponsor Exodus From Troubled Nascar Nation
Cash King Hits the Skids as Ad Dollars, Viewership Fall and Fans Stay Home

Rich Thomaselli

NEW YORK (AdAge.com) -- Once-unstoppable Nascar is hitting a wall as its fan base erodes, race attendance declines, TV ratings slip, the auto industry implodes and economically stressed marketers slam the brakes on sponsorships. The pileup is so big that Nascar, long held up as the gold standard in sports marketing due to its followers -- fiercely loyal to the sport and its sponsoring brands -- had to lay off 1,000 employees and is fretting over whether it could actually lose money next year.

Race relations: Almost one-third of Nascar's cars lack sponsors.

CEO Brian France, speaking last week in New York at its big year-end promotional event, Champions Week, said Nascar won't see increased sponsorship revenue in 2009 -- a seemingly unthinkable turn of events for a sport that added $150 million in sponsorship dollars last year. "Next year, we will not obviously make that kind of a gain," he warned, then added, "The question is, are we going to back up [and lose money]?"

Of Nascar's 42 full-time drivers, 12 currently do not have primary sponsors for the 2009 season, which begins in less than 10 weeks with the Daytona 500. Primary sponsors pay $18 million to $20 million to be featured as the main logo for all 38 races on a driver's car, such as DuPont does with Jeff Gordon. Running nearly a third of its cars without a major sponsor is a huge problem, since under its team business model, at least 75% of the budget comes from sponsors.

"I don't think it's necessarily an indictment of the value of a Nascar sponsorship as much as it is the fact that it's more expensive than ever to do business with Nascar," said Mel Poole, president of SponsorLogic, a sports consultancy in Charlotte, N.C. "Primary sponsors who spend $20 million to put the sticker on the car are spending just as much, if not double or triple that, in media support to leverage that."

According to an Advertising Age analysis of TNS Media Intelligence figures, advertisers spent $538.8 million on TV ads surrounding Nascar programming from January through September of this year, down from $567.2 million in the same time period in 2007.

"Old friends"
And two Nascar marketing staples have left. Eastman Kodak ended a 22-year relationship, while Sears Roebuck, hard hit by the economic downturn and anemic retail sales, decided to end its 13-year title sponsorship of the Craftsman Truck Series after this year.

"Just as we have transformed our company, we are transforming our marketing," said Kodak's Betty Noonan, VP-corporate marketing and branding. Kodak said it is concentrating most of its business on digital cameras, and is putting more of its sports marketing dollars into golf, whose audience demographic is far more lucrative than Nascar's.

"Nobody appreciates sponsors more than us," said the VP-business development of a Nascar team who asked not to be identified. (Indeed, the sport did sign on a number of sponsors in 2008, among them Wrigley and Best Buy.) "But you look around as you're trying to form partnerships, and you look at who's leaving, and it's just disheartening."

"It's not only sponsors that are abandoning Nascar; fans are too". This is the third consecutive season it has suffered from declining TV ratings and third straight year track attendance has fallen -- down some 9% from last season.

According to a Sports Business Journal report, even Nascar's legendary brand loyalty among fans is down. Of more than 400 race fans who were surveyed by the publication, only 42% said they were "much more likely" or "somewhat more likely" to trust a particular product or service that is an official sponsor of Nascar, down nearly 13 percentage points from the responses to the same question in 2007.

No downshift?
For its part, Nascar maintains it's still on track. "While we're not immune to the downturn, by many measures and just about every important metric, we are in a strong position," said Andrew Giangola, VP-business communications. "We're still the second-highest- rated sports programming on TV, and while attendance is down, we still average about 120,000 fans per race."

Indeed, Nascar is No. 2 to the National Football League by most measures, except for sponsorship revenue. The NFL pulls in about $1.2 to 1.5 billion per year compared with Nascar's $3 billion; in third place is Major League Baseball, followed by the National Basketball Association and the National Hockey League.

As for the layoffs, Mr. Giangola said to "consider the context," noting, "You had several years of very strong growth. Then Nascar made some changes with the new car [introducing the more efficient Car of Tomorrow]. We believe some of [the layoffs] would have happened anyway. With the [Car of Tomorrow] you need fewer fabricators, fewer engineers, there's less labor costs. ... But, certainly, it's been exacerbated by the [economic] situation."

Moreover, the death throes of the Big Three domestic automakers could have drastic consequences for Nascar: 32 of the 42 full-time teams for 2009 drive Chevys, Fords or Dodges. (The other 10 are Toyota, which saw unit sales fall 34% in November). General Motors Corp. already reduced sponsorship at 12 tracks last year to seven in 2008. According to reports, 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.

GM has already publicly said everything is on the table when it comes to cuts. "We're obviously watching the situation very closely," Mr. Giangola said. "We're hopeful and optimistic that Congress will help the automakers. The domestic automakers have been a part of our tradition and history."

But if the Big Three disintegrate or scale back on Nascar, there doesn't appear to be another foreign company ready to jump in. Honda announced last week that it is pulling out of Formula 1 racing, a shocking development.

Tough shit for the schmucks !

Somebody here, give me ONE GOOD F'ing reason any US Taxpayers should be on the hook to fund one cent to Detroit's Broke Three. ( Cerberus is NOT broke )

The likes of a nasty Nancy Pelosi, or a fatassed Barney Frank,....what do they know about manufacturing, other than constructing lies and more debt ?

Our tax dollars for another new bureaucrat, monikered - Car Czar ?

http://www.charter.net/news/read.php?ps=1018&rip_id=%3CD94UQTB80%40news.ap.org%3E&_LT=HOME_LARSDCCLM_UNEWS

What a joke.

Let them shrink to size.

Too many redundant products...

Buick, Pontiac, Hummer, and GMC autos definitely need to be shut down.

Same doubled-up fat needs to be trimmed within Ford/Mercury/Lincoln and Chrysler/Dodge/Jeep.

Most of Detroit's plastic junk vehicles are dated, bloated looking, and are simply inefficient boxes pushing wind while carrying long-winded cellphone yakkers complaining about nothing.

The NYC/Wash.,DC/Jewish-run Fed Bankers have inflated us into the greatest over-supply logjam in history.

THE Banksters/Brokers all made many millions & billions while inflating the credit for idiotic, gimme more 'meric*nts, and now, the money moguls want to skim & scam the frugal for future payment.

That RACING is involved/included in the begging for bucks proves the depths to which we have fallen.

FACTS :

Most helpless folks have more pride than our current crop of cry babies.

It is when one loses dignity that one becomes a " bum " .

LOL

But Buick is huge in China!

I like NASCAR but they're gonna have to suck it up like everyone else. Plenty of fat they can trim.

I always had a bad feeling about the Army and National Guard spending so much money on race teams. It is taxpayer money, and there are certainly a lot of military families that deserve the money. I called my congressional offices about it, and they said that race sponsorship resulted in recruiting gains...I call bullshit on that, seems to me that recruiting would be bolstered more by offering better pay and benefits to recruits.
But, I'm just crazy, I guess...

Fall Of The US Auto Industry:

The reckoning

Twenty years ago I read said book.
The predictions have proven to be alarmingly accurate.

Excerpt:
As everyone knows, The Reckoning is about the rise of the Japanese auto industry and the simultaneous decline of Detroit. Halberstam concentrates on the number-two manufacturer in each country, Nissan in Japan and Ford in the U.S., rather than the giants, Toyota and GM. (Halberstam has said that if he had descended into GM, he might never have come back up. The book took six years as is.)

Dale

Rowdy Racer wrote:

QUOTE:
I always had a bad feeling about the Army and National Guard spending so much money on race teams. It is taxpayer money, and there are certainly a lot of military families that deserve the money. I called my congressional offices about it, and they said that race sponsorship resulted in recruiting gains...I call bullshit on that, seems to me that recruiting would be bolstered more by offering better pay and benefits to recruits.
But, I'm just crazy, I guess...:huh:

I dunno,
"Top Gun" certainly boosted enlistment.

Such being said and considering we are currently engaged:
"NASCAR will simply need to make Humvee the spec. vehicle"

/////////////////// HUMVEE

Marketing, marketing, marketing...........

Dale

CORRECTION:
When Nascar CEO Brian France was quoted as saying "The question is, are we going to back up" he was referring to whether the sport was going to be able to reach the gains it made in 2008 sponsorship dollars; he was not referring to whether it could lose money this year. Also, the 1,000 layoffs referenced in the story refer to the teams, not Nascar's governing body. And though Sears did end its 13-year title sponsorship of the Craftsman Truck Series after this year, Craftsman remains the "official tool" of Nascar.

Dale

If we are lucky Speed TV will get the message and put something on other then NASCAR, oops they have Unique Whips Wrecked,

Some where in it all Speed TV missed the "Speed" in their own title.. Next they'll be doing the NFL or NBA????

DM* wrote:

QUOTE:
Tough shit for the schmucks !

Somebody here, give me ONE GOOD F'ing reason any US Taxpayers should be on the hook to fund one cent to Detroit's Broke Three. ( Cerberus is NOT broke )

The likes of a nasty Nancy Pelosi, or a fatassed Barney Frank,....what do they know about manufacturing, other than constructing lies and more debt ?

Our tax dollars for another new bureaucrat, monikered - Car Czar ?


What a joke.

Let them shrink to size.

Too many redundant products...

Buick, Pontiac, Hummer, and GMC autos definitely need to be shut down.

Same doubled-up fat needs to be trimmed within Ford/Mercury/Lincoln and Chrysler/Dodge/Jeep.

Most of Detroit's plastic junk vehicles are dated, bloated looking, and are simply inefficient boxes pushing wind while carrying long-winded cellphone yakkers complaining about nothing.

The NYC/Wash.,DC/Jewish-run Fed Bankers have inflated us into the greatest over-supply logjam in history.

THE Banksters/Brokers all made many millions & billions while inflating the credit for idiotic, gimme more 'meric*nts, and now, the money moguls want to skim & scam the frugal for future payment.

That RACING is involved/included in the begging for bucks proves the depths to which we have fallen.

FACTS :

Most helpless folks have more pride than our current crop of cry babies.

It is when one loses dignity that one becomes a " bum " .

LOL

It all goes back to how do you and I want to live.. And the issue of COSt to Produce verses the Slae Price of goods...It's quite simple if you want to live the way the people do that are producing all the stuff now for sale in the good ole USofA from places like China. If you want to live and work in the conditions and under the Political system they do, then keep buying their crap, and in anothee ten ot fifteen years you will be living just like them.. America has been bought and sold right out from under our feet by Wall St, and our Governemnt, for personal gain.. And now that virtually everyone, every man, woman and child has been robber of about 20% of their own personal wealth, we are being asked, no not asked, told that we will not pay for it all.. Not to gain back any of what we have already lost, but to pay to the very people that caused the mess. Taxed to bailout Wall St., the Mortgage Giants that really caused the house of cards to start it's fall..

Yes pouring more and more money onto a raging bonfire, is crazy... But the people saying do this and do that won't be effected by much of it anyway. Where is the indignation, the outrage, where are the crowds of Millions marching on Washigton DC and throwing Politcans into the Patomic Riiver. Where are the Millions on Wall St, not watching for people to be jumping out the windows there, but swarming the place and throwing those clowns out the windows????

Yes the American Auto Industry is a mess, but they had help. much of it in Washigton Dc and on Wall St.. I spent 40 years working in the Auto Industry, I know what the probalems are and many of them have the UAW name stamped all over them.. But there is enough blame to go around, the question should be, "Where to NOW" and doing business as usual is not the answer...

Buy American, and create jobs here.... And tax the living shit of of goods on an equal basis based on how our goods are tariffed elsewhere.

And remember the next time you pop for a product that says Made anywhere but the USA, exactly what you money is going for..

Lineaweaver wrote:

QUOTE:
Fall Of The US Auto Industry:

The reckoning

Twenty years ago I read said book.
The predictions have proven to be alarmingly accurate.

Excerpt:
As everyone knows, The Reckoning is about the rise of the Japanese auto industry and the simultaneous decline of Detroit. Halberstam concentrates on the number-two manufacturer in each country, Nissan in Japan and Ford in the U.S., rather than the giants, Toyota and GM. (Halberstam has said that if he had descended into GM, he might never have come back up. The book took six years as is.)

Dale

The hand writting was on the wall, just look at what happened to the British Motorcycle industry, or for that matter their car industry.. But no one was reading, and now it's perhaps too late???

QUOTE:
It all goes back to how do you and I want to live.. And the issue of COSt to Produce verses the Slae Price of goods...It's quite simple if you want to live the way the people do that are producing all the stuff now for sale in the good ole USofA from places like China. If you want to live and work in the conditions and under the Political system they do, then keep buying their crap, and in anothee ten ot fifteen years you will be living just like them.. America has been bought and sold right out from under our feet by Wall St, and our Governemnt, for personal gain.. And now that virtually everyone, every man, woman and child has been robber of about 20% of their own personal wealth, we are being asked, no not asked, told that we will not pay for it all.. Not to gain back any of what we have already lost, but to pay to the very people that caused the mess. Taxed to bailout Wall St., the Mortgage Giants that really caused the house of cards to start it's fall..

Yes pouring more and more money onto a raging bonfire, is crazy... But the people saying do this and do that won't be effected by much of it anyway. Where is the indignation, the outrage, where are the crowds of Millions marching on Washigton DC and throwing Politcans into the Patomic Riiver. Where are the Millions on Wall St, not watching for people to be jumping out the windows there, but swarming the place and throwing those clowns out the windows????

Yes the American Auto Industry is a mess, but they had help. much of it in Washigton Dc and on Wall St.. I spent 40 years working in the Auto Industry, I know what the probalems are and many of them have the UAW name stamped all over them.. But there is enough blame to go around, the question should be, "Where to NOW" and doing business as usual is not the answer...

Buy American, and create jobs here.... And tax the living shit of of goods on an equal basis based on how our goods are tariffed elsewhere.

And remember the next time you pop for a product that says Made anywhere but the USA, exactly what you money is going for

Excellent post Ray.
Thank you.

Dale

Bultacoslider wrote:

QUOTE:
Lineaweaver wrote:

QUOTE:
Fall Of The US Auto Industry:

The reckoning

Twenty years ago I read said book.
The predictions have proven to be alarmingly accurate.

Excerpt:
As everyone knows, The Reckoning is about the rise of the Japanese auto industry and the simultaneous decline of Detroit. Halberstam concentrates on the number-two manufacturer in each country, Nissan in Japan and Ford in the U.S., rather than the giants, Toyota and GM. (Halberstam has said that if he had descended into GM, he might never have come back up. The book took six years as is.)

Dale

The hand writting was on the wall, just look at what happened to the British Motorcycle industry, or for that matter their car industry.. But no one was reading, and now it's perhaps too late???

"Give me liberty or give me death"
Patrick Henry

It's never too late to make a stand. You may not win, you may even perrish, alas, what is life without dignity. (JMO)

Dale