The Frontstretch: Show Me the Money! by Mark Howell -- Thursday September 22, 2011

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Show Me the Money!

Mark Howell · Thursday September 22, 2011


Poor Clint Bowyer!

Here’s a Sprint Cup driver with four career wins (so far) to his credit, a history of being a Chase contender, a reputation for being personable and good with fans, and the guy can’t get arrested. Even with a seventh-place finish at Chicagoland Speedway on Monday – he was one of only two “non-championship” drivers in a top-10 strewn with end-of-year title hopefuls – the Emporia, Ks. native can’t, in the words of the late Rodney Dangerfield, get any respect. He has three top-5s and ten top-10s to his credit thus far in 2011, and it looks like he’ll be without a Cup ride come Daytona next February. Here’s a driver who’s been fairly consistent overall this season in Cup competition (with an average starting position of 16 and an average finishing position of 16.6), yet he’s still without a job for next year (at least for right now). Such is the awful truth when it comes to being a NASCAR driver: you don’t mean a thing if you ain’t got that cha-ching…

Now, I know that General Mills – Bowyer’s “sugar daddy” of late – is taking its money elsewhere, likely to someplace exotic like employee salaries and factory overhead, but being part of the No. 33 Chevrolet/Sprint Cup experience must have been positive. Having Bowyer’s smiling face on the back of Cheerios’ boxes was a big hit in my house. My close-to-four-year old son can recognize Clint Bowyer because of his role in various company promotions and giveaways. Conversely, he’s been quick to recognize one of his favorite cereals because of its relationship with Bowyer and the fine folks at Richard Childress Racing. While he can identify Jeff Gordon and Jimmie Johnson on the basis of their car numbers and team colors, my son is able to pick Bowyer out because of his sponsorship arrangement. One of his favorite toys became a little No. 33 racer/stock car that was propelled by a spring-loaded launcher, and he could tell you point-blank that the car belonged to one Clint Bowyer. I’m not about to second-guess major, multi-national, corporate economics here, but I am going to second-guess the way that NASCAR drivers have to find work.

Only in the world of NASCAR racing can the following mathematical equation make sense: to earn $800,000, a race team needs to spend $18,000,000. Such was the end result of the 2002 then-Winston Cup season for Dale Jarrett. Looking back in time, this dollar amount must have been related to Jarrett’s own personal season earnings, since his team finished 9th in Cup points that year and made $4.4 million in winnings. I used to refer to this equation/statistic when giving an example of how irrational and often unrealistic the economics of motorsports really are. It doesn’t seem logical, but what does in an activity where what you spend always exceeds what you actually earn in return? And what about the idea that you have to bring huge amounts of financial backing with you if you are to be signed to a Sprint Cup ride?

Clint Bowyer finds himself without a ride in 2012, a troubling sign for the economic state of NASCAR.

If I took ten-to-twelve million dollars with me to a job interview, and it turned out that that sum was motivation enough to get me the position, somebody would wind up in big trouble. This is reported to be the amount of corporate backing that Clint Bowyer has from a new deal he’s signed with Five-Hour Energy Drink. The funds should allow Bowyer to run a 20-race Cup schedule in 2012. While that’s all-well-and-good in NASCAR Nation, the underlying issue is that Bowyer is still without a formal contract to secure a ride. Even with money on the table for sponsorship, no team has agreed (yet) to sign Bowyer for next season. As the weeks slip by, so do the realistic chances that something substantial as far as a ride goes will appear on the horizon for Bowyer.

Richard Childress has declared that an active search for sponsors to back the No. 33 team is still underway, and that Clint Bowyer is one of four-or-five possible drivers who might race the car next year. Despite this assurance (??) that Bowyer is still in the running for the No. 33 seat, Childress has also made it known that Bowyer is free to pursue other options. Childress has also moved several members of Bowyer’s crew over to Kevin Harvick’s No. 29 team, and he has allowed Scott Miller to take a position with Michael Waltrip Racing (in advance of Bowyer, himself, going over to MWR?). It’s a case of the classic “I really do love you, but I think it’s best if we see other people” line, only NASCAR-style. To his credit, Bowyer went ahead and met with other teams, including Richard Petty Motorsports, Roush Fenway Racing and Earnhardt-Ganassi Racing. As of the time when I write this, it appears as though there’s a pretty solid chance that Bowyer (and all of his Five-Hour Energy money) will sign with Michael Waltrip Racing. Now there’s a car owner/driver who understands the relationship between personalities and profits.

Michael Waltrip is no stranger to the power of sponsorship, even when there aren’t tangible results to go with it. I did some work at Bahari Racing back in 1992 when Waltrip drove their No. 30 Pennzoil Pontiac. He was winless in Cup competition at that time (a streak that wouldn’t end until his victory in the 2001 Daytona 500 when he drove for Dale Earnhardt Inc.), but that didn’t stop Pennzoil from signing Waltrip to an extended contract. Apparently his affiliation with the firm was good for an almost 30 percent increase in regional sales, and he hadn’t even seen the inside of a winners’ circle yet. The same was true for his relationship with Citgo gasoline during the mid-1990s. Michael Waltrip’s personality trumped his on-track performance, and that – back in those days – seemed to be just fine.

Today’s a different story. I’ve been told that the “rule of thumb” regarding dollar amount when you discuss sponsorship deals needs to be doubled (or tripled) before you reach its actual “working” total. By the time you figure in promotions, media coverage (advertisements in newspapers or on TV), “swag” for event giveaways, and other material goods, you’re looking at a much larger financial investment than your initial stake in the team. Figure in the ever-increasing costs of just running a Sprint Cup operation, and the added boost of cash needed to make said operation a championship contender, and suddenly your $10,000,000 in “seed money” looks mediocre, at best.

Can you think of another profession where a job candidate is expected to bring along money to seal the deal and secure his employment? This notion reminds me of the reputation so often attributed to open-wheel racing – the idea that a wealthy kid with a blank check from his even-wealthier father could go and buy a seat in a car and fulfill his fantasy of being a racing driver. More experienced drivers would be stuck sitting in the grandstands as the “rental ride” circled the track…the ride better-suited to a driver looking to build a long-term career instead of memorable experience. Such is the economically-driven nature of professional motorsports.

The prevailing notion around NASCAR was that everything regarding driver contracts for 2012 rode on the contract negotiations of Carl Edwards as he solidified his future as a Sprint Cup driver. Teams waited with baited breath as Edwards went about his meetings and discussions. It was predicted that once Carl made his move, the entire “silly season” would fall neatly and quickly into place. Other drivers would meet with other teams to create new deals resulting in new opportunities. Oddly enough, once Edwards announced his new, long-term arrangement with Roush Fenway Racing, all talk of additional meetings and negotiations for other drivers stopped. Maybe it was the resurgence of the Great Recession, or maybe it was simply easier to move crew chiefs about in hopes of finding better performance – no matter; the stage was set and lit for other drivers seeking to settle their uncertain futures. Clint Bowyer became the obvious target given that his days at RCR seemed numbered, and that General Mills was already planning to drop their sponsorship of the No. 33 Chevy.

Not to think that other significant sponsorships were being considered by other Cup teams. Home Depot was rumored to be interested in backing Carl Edwards and his No. 99 Ford. A deal aligning Edwards – who’s a husband, a father, and a homeowner – with Home Depot made perfect sense. Ever walk into a Home Depot on a Saturday morning? The customers you’ll see match Carl Edwards pretty closely (except for the competitive driving ability, the boyish good looks, and the chiseled abs). Edwards appears to be a better “fit” for Home Depot’s intended audience than Joey Logano currently is; “Sliced Bread” might be good to earn the firm some camera time, but I doubt many twenty-somethings drop much cash on lawn tools and window screens. A buddy of mine took a job at a SUNY campus in Upstate New York and bought a “fixer-upper” of an old house. He wound up spending many Saturday mornings (and so much money) at the nearby Home Depot that the employees there gave him his own coffee mug! I’m not sure what that says about my friend’s home remodeling skills, but I can say that the driver/sponsor continuum is essential.

So what does all this have to do with Clint Bowyer’s current situation? It’s safe to say that General Mills is out of the picture, but it’s not safe to say that Bowyer will safely slide into a new seat for the 2012 Cup season. He’s making the meetings and talking the talk, but until a legally-binding contract has been signed, he’s looking at a challenge to his concentration. The best way to attract sponsors is to demonstrate that you can consistently run upfront, and maybe even win every now and then. If Clint Bowyer is pre-occupied with raising corporate cash and wooing car owners, he’s not going to be focusing on the task at hand: running well as often as possible so as to get that necessary corporate attention. It’s a “catch-22” kind of situation, especially since the promise of job security as gleaned through NASCAR sponsorships is iffy at best.

Sometimes I think that NASCAR Sprint Cup teams adhere to a “Hollywood”-style of bookkeeping (see the Dale Jarrett equation/statistic above). How can a major motion picture cost $120,000,000 to make, earn $750,000,000 in revenues, and still lose money when all is tallied up and recorded? The devil is in the details, as they say, and the details behind a Sprint Cup ride for 2012 are devilish right from the start. Money is tight now and any available seats are even tighter, especially as teams cut back and try to survive. My guess is that RPM ended its talks with Bowyer because he didn’t have enough funding in place to warrant the start of a new team. With Marcos Ambrose and A.J. Allmendinger already in the fold, the addition of a third RPM operation would strain precariously-stretched resources.

I hope Clint Bowyer is able to secure a solid Cup ride for 2012. The sport needs more drivers like him – competitors who come from regional racing backgrounds on short tracks across the Midwest. Bowyer is one of those drivers who is used to doing his own work on his own cars with his own money. Financial help is always appreciated, but it’s what’s inside the competitor’s heart that makes him race. He’s a talent to reckon with because he seems to possess a good work ethic and an even better demeanor. Given the high-speed/high-profile nature of today’s NASCAR environment, Bowyer seems well-suited to meet the needs of both a competitive race team and a supportive sponsor. Above all, I hope he gets to sign an official contract before the series gets to Homestead in November. Clint Bowyer needs to know that his work with past sponsors has earned him a big fan in my little son. If only more companies recognized the significance of this last sentence.

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Today on the Frontstretch:
Championship Caliber? What Does That Even Mean?
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09/22/2011 02:44 PM

Poor little Joey. Hey, when your number is 20 that is where you finish!

09/22/2011 03:47 PM

There is no significance to that last sentence in today’s corporate market place. The vast majority of consumers have shown they will buy the lowest quality product at the lowest possible price three times over before purchasing the quality product at its corresponding price. And since our economic system favors moving our jobs overseas instead of thinking long term about our future, General Mills, which is chained to the same economic system via its stock price, is better off cutting costs and banking the profits than anything that matters long term too. THAT is whats killing NASCAR. The very same thing that is killing us all.

09/22/2011 07:05 PM

If you want to write about buying a ride look at Indycars and F1.

09/22/2011 08:49 PM

Mark, an excellent article on several levels. One the comparison to Hollywood bookkeeping is excellent, although the government could work as well. Your experience with MW may be suffering in todays time. The internet and social media is arguablly a more powerful force than what you see on TV, and dramatically more affordable.
Leo makes a good point also, about the consumers going for the low priced product now. We business owners are struggling with that every day.
And finally 10-12 million only being enough to sponsor a car for 20 races ought to be enough to tell the story. Its not worth it at that price.