The NASCAR Economy: How Do Things Look for the Industry?

Teams, sponsors discuss downturn effects on racing industry

With the national economy floundering, competitors in motorsports are also trying to work through some tough times. What is the state of the Economy within the highest echelons of the sport, and how do things look for the future?

Here is what some competitors and sponsors had to say:

KYLE PETTY, CEO, PETTY ENTERPRISES:

"Yeah, things could be better. They can always be better. But are we in trouble as a sport? No.

"In any downturn of the U.S. economy, the peripheral areas are going to suffer. If it’s not food, shelter or the basics, then people are going to cut back on their spending. The entertainment dollar is first thing people start holding back. And we are definitely in the ‘entertainment dollar’ segment of the economy.

"I think we’ve leveled off economically. It is hurting the growth of us as a sport the way the economy is but I don’t know that we are still dropping off like we were. Grandstand tickets might be down some right because of that ‘entertainment dollar,’ but people are still watching us on television - most of the races have seen their (television) ratings go up this year - and people still buying most of the products on our cars.

"No matter what the economy is, people are still going to be drinking Coca-Cola, eating Cheerios and cleaning it all up with Brawny paper towels. Life goes on regardless of what the economy is doing. We can still help market to those people for our sponsors, and our sponsors still need to make and sell their products.

"Essentially, I think we’ve leveled off as far as a ‘NASCAR economy’ is concerned and now we’re just waiting for the U.S. economy to pick back up, figuring ours will pick up not long after that."

STEVE DAVISON, PRESIDENT, CLEAN CONTROL CORPORATION (OdoBan Odor Eliminator sponsors #60 OdoBan Ford of Stanton Barrett; Jack-Roush-owned team, and OdoBan Ford of Roy Hill in NHRA Pro Mod Series):

"We’ve put a lot of faith in motorsports but we believe in it. Our thinking is branding. We want people to think OdoBan Odor Eliminator. That yellow and green on the side of Stanton’s and Jack Roush’s Fords in the Busch Series is in front of a lot of people.

"The business-to-business aspects are important for us too. We have been able to do some of that through this team and through Roy Hill’s NHRA Pro Mod too. It just requires a lot of work and a lot of marketing support, not just from our company but from Roush Racing and Roy Hill too.

"The economy is tough on everybody right now but people still need to buy OdoBan Odor Eliminator and our other cleaning and disinfecting products. Because of that, we need to advertise and market. Working through motorsports is the way we do that.

"Obviously, we have to be careful and watch our nickels. Winston Cup is too expensive for us right now but Busch and NHRA Pro Mods are fitting our budgets. No, now is not the time for Clean Control to go Winston Cup racing but I’d think it would be a good time for a lot of companies. Like I said, we’re all still trying to get the products people need into stores."

DERRIKE COPE, DRIVER/OWNER, QUEST MOTORSPORTS (#37 Friendly’s Chevrolet):

"In my opinion, the motorsports economy, especially in Winston Cup, is not very good. The market is overpriced for where we are right now. I think you are going to see a lot of teams scrambling, if they are not scrambling already. A lot of sponsorships come up at the end of the year, and these teams are going to be trying to come up with something. The way the market is right now, I don’t think those $10-12 million deals are going to be too plentiful in the near future.

"Frankly, there is a good opportunity for sponsors to get into the sport at a lower rate, and that’s going to start showing up in the second half of the year. You’ve already seen some things. There are a lot of people out of jobs. Teams have pulled back. Payrolls are dropping. By the end of the year, this is definitely going to be a sponsors’ market, and sponsors will be able to get a good value for a lot lower price.

"We’ve seen the cost-effectiveness and flexibility route work for us. We’ve worked to find sponsorship packages that are palatable to companies right now. By regionalizing some sponsorships - having Friendly’s on the car in their particular markets such as the northeast and mid-Atlantic states - we’ve been able to get them very good bang for the buck, and by putting together some regional sponsorships with that, we have been able to get into a position where we can run a lot of races. For Friendly’s, it’s less money invested and a better return. That’s been our goal with our process - price sponsorships in a way that they are getting the best possible return on their investment and do it so smaller companies can get in the sport."

BETH ANN MORGENTHAU, OWNER, #49 BAM RACING DODGE:

"Tony (Morgenthau, husband and co-owner) loves to tell a story about negotiating with a man a few years ago. The deal came down to $10,000. Tony asked him, ‘Is $10,000 a lot of money?’ The man looked at him and said, ‘Depends on whether you have it or not.’

"That’s the economy in the sport, not just these days but every day. If you have a sponsor, it’s a good year. If you don’t, it’s not. It doesn’t matter what everyone else is doing or not doing.

"We started this season fully funded, and we have everything set and ready to go for the whole season budgetarily. Still, we want to bring sponsors into our team. The financial standpoint is pretty obvious, but corporate sponsors can also help you promote and build your team.

"For us, it’s been an ok year. 1 800 CALL ATT has been involved with us for several races, and ATT corporate has been with us some. We have had sponsorship from Sony Music Nashville and dakota imaging. We’ve had sponsorship and we’ve had good runs for these sponsors, so that helps a lot as far as looking towards the future.

"This is a tremendous marketing vehicle for any company. Those companies are still looking to sell their products, and people are still looking to buy products. It’s just a question of what people will buy. We think a great program that fits the needs of the sponsor - for example, branding for 1 800 CALL ATT - leads to greater sales for them. A lot of people paid a lot of attention to 1 800 CALL ATT and Ken Schrader at Martinsville, and we were proud to be a part of that."

ANDY PETREE, OWNER, ANDY PETREE RACING (Winston Cup, Trucks):

"The state of the economy in NASCAR, or anywhere else, pretty much depends on where you are sitting at the time. It’s like the old line - if your neighbor is out of work, it’s a recession; if you are out of work, it’s a depression.

"Plain and simple it’s tough finding sponsorship out there right now. I really believe marketing through motorsports is of great interest to a lot of companies but because of the perceived price tag and the unknowns as far as the economy as a whole right now, a lot of companies are waiting. They are waiting to see what the economy does, what happens to their companies, where sales head, things like that.

"If you have a sponsor, you work hard to hold onto them. If you don’t have a sponsor, you have to keep working hard and being patient. We have a lot of companies we’ve talked with and who are talking to us, and we feel we’re close on some things. But until they sign on the bottom line, we have to wait."

STANTON BARRETT, DRIVER, #60 ODOBAN TAURUS (Busch Series); BARRETT ALSO RUNS CAR SPONSOR, A NEW TURN-KEY MOTORSPORTS MARKETING CONSULTING AGENCY:

"The key thing for all of us is remembering just painting a name on the side of the car and hoping for the best is over. Sponsorship marketing is a full-time effort. The corporation has a lot of work to do but the team has to do everything it can do as well.

"One of the main reasons we started Car Sponsor was to give corporations a turn-key operation, something that would take care of all of their needs. Whether it’s business-to-business opportunities or putting together television commercials or placing sponsorship or whatever, it’s an area we can respond to and an area of need for the sponsor.

"Maybe we all got fat and happy there for awhile but it takes a lot of hard work to bring sponsorship to the table, and to make things work well once they are there. The overall economy is down right now, true. That just means everybody has to work harder to make motorsports marketing work."