By JENNA FRYER, AP Auto Racing Writer Oct 17, 12:01 am EDT
CHARLOTTE, N.C. (AP)—The phone rang off the hook at Hendrick Motorsports in June 2007 as prospective sponsors lined up to spend their money on Dale Earnhardt Jr., NASCAR’s most popular driver who had just signed a five-year contract with the team.
“We want in, and we know it’s going to be expensive,” was the message Hendrick heard over and over. Mountain Dew’s AMP Energy and the Army National Guard ultimately teamed to pay the tab, estimated to be at least $30 million annually.
A mere 15 months later, the calls from sponsors aren’t coming in as regularly to shops all across NASCAR. The weakening economy has made funding difficult to come by, and the financial meltdown has put once-solid teams on perilous ground.
“It’s a scary time right now,” said driver Jeff Gordon. “We see strong teams struggling to get sponsorship.”
As companies tighten their belts or even fail, sponsorship money that once flowed freely to all sports teams and leagues is in danger of drying up. And it’s auto racing that could suffer the most, said Craig Depken, an economics professor at UNC-Charlotte who specializes in sports.
“It’s primarily driven by the sponsors,” Depken said, “and not just NASCAR. It’s just about every motor sport there is.”
With sinking auto showroom sales, declining attendance and rising operating costs, no form of motorsports is safe—not even the glamorous, globe-trotting Formula One Series. The Canadian Grand Prix was dropped from the 2009 schedule, leaving no races in North America, and Max Mosley, head of F1’s governing body, warned that the whole series could be in peril if drastic cost reductions are not made within two years.
The soft economy already is affecting several teams in NASCAR, which is built around independent car owners who rely heavily on sponsorship to pay the bills. A collapsing economy could destroy it.
People still worry that widespread layoffs are coming and NASCAR may struggle to meet its 43-car fields as early as next season.
“A year ago, we had 53 cars showing up almost every week, and I don’t think it benefits anyone in this sport if it gets down to where we can’t get 43,” said J.D. Gibbs, president of Joe Gibbs Racing. “It’s never changed in that you need to be competitive to get good partners. That’s life. But if this goes on for too long, and it’s looking like it might, this entire industry is going to feel it, regardless if you’re a successful big team or a struggling small team.”
For most car owners, racing is their only business. As long as they don’t have the same sponsorship levels as Childress, Hendrick, Gibbs and Roush, they’ll never be able to beat them consistently on the track.
It’s no coincidence that those top four owners claimed all 12 spots in this year’s Chase for the Sprint Cup championship, and their drivers have won all but four of the 31 races this season.
“NASCAR needs to level the playing field,” said team owner Chip Ganassi. “They can’t just have Gibbs, Roush and Hendrick winning all the races. They’ve got to do more to help everyone else compete.”
