NMPA
c/o Bridget Holloman, Exec. Secretary
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Phone: (843) 395-8811

Magazine
Third Place

Monte Dutton, Southern Sport Journal

Money To Burn

NASCAR teams have had to get a bit more creative in recent years. That’s because sponsoring a race team isn’t the bargain for corporate America that it once was.

For instance, it wasn’t too long ago that a Cup (then Winston, now Nextel) sponsorship could be measured in million-dollar, not multi-million-dollar, amounts. Nowadays, it’s not uncommon for teams to require $15-20 million to keep their cars racing, their transporters rolling and their pit crews changing the tires. Costs have mushroomed in almost every manner imaginable.

Practically every driver on the circuit – and each race begins with 43 of them on the track – boasts a base salary that exceeds $1 million plus a percentage – quite often a hefty percentage – of the earnings. Many drivers make more off the track, through endorsements and souvenir sales, than they earn on it. Salaries of all the personnel – crew chiefs, “car chiefs,” fabricators, engine builders, engineers, aerodynamicists, etc. – have likewise increased in a market that has witnessed large teams hiring the best and brightest away from teams without the resources to compete.

“It gets harder and harder for the sponsors to put up, say, $15 million, out of their budgets,” said Richard Petty, the sport’s most successful driver ever. “If a sponsor puts up $10 million to keep the race team going, it has to spend practically twice that much in order to get the benefit out of it. Just putting the name on the side of a car and running around and around the race track is not going to get him back his $10 million. It’s what the sponsor does and how much money it spends around the racing that makes it worthwhile.

“When you add up all that, there aren’t that many who can say, ‘We don’t want anything else on the car. We want to do the full sponsorship.’ What that means nowadays is that teams are winding up with two or  three major sponsors on the cars at various times and a bunch of lesser sponsors, associate sponsors, so that everyone can benefit by the total outlay on the car. It’s according to what kind of promotions they run, whether it does them any good. If they’ve only got so much money to spend, they’ve got to do their advertisement plus get a race car.”

Petty won 200 races and seven championships. For roughly the latter half of his career, STP sponsored his No. 43. STP, the automotive-additives company, is now long gone, a casualty of corporate policy changes and proliferating costs associated with racing. Petty Enterprises, which currently fields Dodges for Kyle Petty and Jeff Green, hasn’t won a race since 1999.

“The cost of the sport has escalated so high – it’s still escalating – that it’s hard for one company to take the whole team, the whole car, at one time,” said Richard Childress, whose team fields Chevrolets for Kevin Harvick, Jeff Burton and Dave Blaney. “That’s the reason you’re seeing different companies come in with different levels of sponsorship. It can really work well.”

As recently as 10 years ago, the paint schemes on cars were as familiar as the drivers themselves. It’s changed so much now that keeping up with who’s who on the track has grown difficult even for the most discerning observers. In the late 1990s, teams began using different paint schemes in mainly commemorative senses. Childress put the late Dale Earnhardt, with whom he won six championships (out of Earnhardt’s career total of seven), in specially painted cars for the annual all-star race then known as The Winston.

Now, technically speaking, most them aren’t even paint schemes anymore. One of the recent innovations that quickly became almost universal was the practice of coating the cars completely with decals. More than half the cars now aren’t painted at all, or at least not in a decorative sense. The method of decaling is more cost-effective and takes less time to complete, thus facilitating the overnight changeover of a car from one scheme to another.

“What you try to do is cut that deal as you’re going,” said Childress. “If you’ve got three different companies, you try to package the whole thing together, sort of like we did with Jack Daniel’s. Jack Daniel’s will have more races next year, but, right now, we’ve got six races that we’ve got sold off (to other sponsors of Blaney’s No. 07), and we’ve got a couple races sold off on the Cingular car (Burton), and we’ve got three sold off on the Goodwrench car (Harvick).

“You can tie a promotional deal together that will benefit everybody, plus it can relieve a little cost on the big company.”

It’s instructive to note that the reigning Nextel Cup champion, Kurt Busch, drives a car that carries a wide range of paint schemes representing a variety of sponsors. At various times, his No. 97 Ford carries paint schemes representing Crown Royal, Irwin Industrial Tools and Sharpie. His owner, Jack Roush, fields five Cup teams as well as entries in the Busch and Craftsman Truck series. The Roush Racing web site lists major sponsorships from the following companies: National Guard, Sharpie, Viagra, DeWalt, Charter, Superchips, Post-It, AAA, Irwin, Office Depot, Smirnoff Ice, Crown Royal, Scotts, World Financial Group, Waste Management, Pennzoil and Shell Rotella-T.

NASCAR’s astonishing growth hasn’t made it easier for teams to secure sponsorship, simply because all the package deals require an ever-increasing number of corporations and products to keep all the teams in operation. Add in the similarly escalating costs of maintaining Busch and Truck teams, and what becomes clear is that the competition for sponsors is about as intense as the races themselves.

The leadership of NASCAR changed course in the offseason by allowing, for the first time, sponsorships with makers of distilled spirits. Until this year, beer and wine were allowable, but hard liquor was taboo. Almost immediately, Jack Daniel’s, Crown Royal and Jim Beam entered the sport, making up, at least in part, for the almost total departure of tobacco interests.

“Everything about this sport is changing, and I mean in a big hurry,” said Childress. “You’ve got to really stay on your toes to keep up.”

The entry of whiskey makers into NASCAR drew quite a bit of criticism and shaped the largely informal regulations governing it. The new sponsorships have been carefully formulated to promote “responsible drinking.”

“They told us that any advertising done in NASCAR by breweries or distillers, they’ll make sure it is directed at the legal age audience and not to kids and that they will require 20 percent of advertising dollars go toward promoting responsible drinking,” said John Moulden, who is the president of the National Commission Against Drunk Driving.

But Wendy Hamilton, president of Mothers Against Drunk Driving, said she considered it “absurd” to put alcohol ads on cars.

“NASCAR, with its fan base, has the opportunity to be a player in this world when it comes to drunk driving because clearly not enough people are getting the message,” she added. “Our position is very clear. We’re going to be talking about all alcohol, not just the distilled spirits industry, and our message is no underage drinking and don’t mix drinking and driving.”

Childress and the driver, Blaney, who carries Jack Daniel’s on his car at most  lraces, have worked diligently to blunt criticism.

Some would say that the latest developments represent quite a change for a sport that began in the 1940s as a recreational sideline for men who learned their high-performance driving tactics from hauling illegal moonshine down dusty back roads. Of course, some would say that those developments don’t really represent much of a change at all.