NASCAR Race Weekend Central

Thompson in Turn 5: Kyle vs. Junior – Junior is Still the Better Deal

There is no end in sight to the comparisons between the racing careers of Dale Earnhardt Jr. and Kyle Busch, the driver he replaced this season at what has been NASCAR’s premier racing organization: Hendrick Motorsports. And replace Busch at HMS, Junior absolutely did. Make no mistake about it; had Rick Hendrick not had an opportunity to sign NASCAR’s Most Popular Driver, there really would not have been any “room at the inn” for anyone else. But as a result of Dale Jr.’s free agency, Busch was forced out of HMS, and eventually signed on with Joe Gibbs Racing for the 2008 season and beyond.

Even though both parties have stated otherwise, you can bet that any supposed “communication” problems that existed between Busch’s contract negotiating team and HMS would have been quickly resolved under different circumstances. Rick Hendrick fully understood the great potential that this youngster possessed; after all, he had gone to great lengths to lure Busch away from Roush Racing when Busch turned 18 years old. But when Junior became available, Hendrick simply weighed the pros and cons of the two drivers and made what he thought was a “no brainer” of a business decision – a decision that had, on one hand, a driver with a lot of potential to generate revenue compared against another driver with a proven track record of being able to bring in the cash. In the end, it was Junior that got signed… while Kyle was sent packing down the road.

But tremendous potential aside, no one – including Joe Gibbs – could have truly predicted the phenomenal start that Busch has had to the 2008 season. Presently leading the NASCAR Sprint Cup Series standings while scoring three wins along the way, he also has another six victories between NASCAR’s two other top divisions, Nationwide and Craftsman Truck. Busch, who has given himself the nickname “Rowdy,” is by far the hottest racecar driver in recent memory. But are those results leaving Hendrick wishing he could take this youngster back?

Probably not.

At this point, a purely side-by-side comparison of the on-track results between these two drivers would suggest that Joe Gibbs Racing has gotten the better end of the Earnhardt/Busch acquisitions up to this point. But as Rick Hendrick, a successful businessman in and out of racing, knew when the decision was made to bring Earnhardt Jr. into his stable of racecar drivers, Busch could not compare to his replacement in a very important category that all team owners must consider… marketability and profitability.

This past week, Joyce Julius and Associates – a third-party entity that measures sponsorship impacts, particularly in the field of sports sponsorships using its own proprietary methods – released its rankings of sponsorship exposure among NASCAR drivers for the first 10 events of 2008. And as Rick Hendrick, no doubt, could have told you last season, Earnhardt Jr. outdistanced all other drivers in wrangling sponsor exposure during both live broadcasts and SPEED’s re-broadcasts for those companies that contribute to his HMS No. 88 Chevy race effort.

Are these types of reports a big deal? You bet, if you are a team owner soliciting sponsorship dollars. The numbers for Junior indicate that he has generated more than $150 million of quality television exposure for his sponsors based on prevailing advertising rates. Compare that to four-time Cup champion Jeff Gordon, second in gaining his sponsor broadcast exposure. He’s credited with $126,436,385 – almost $24 million less than the exposure time Junior’s sponsors enjoy.

And where does Busch rank on this list? Fourth in total exposure time for his many corporate supporters. That’s not bad at all; however, with a total advertising exposure number trailing that of his replacement at HMS by more than $34 million, Junior’s sponsors are getting more “bang for the buck,” benefiting more by associating themselves with the 32-year-old celebrity/driver instead of the 23-year-old phenom.

“I think the results do show Earnhardt’s value to sponsors, but I would caution these numbers only reflect the first 10 races and could change over the course of the year,” Eric Wright, VP of Research and Development at Joyce Julius and Associates, told Frontstretch. “The true gap between the two may not be as great at the end of the season as it is right now.”

However, with respect to Mr. Wright and his firm’s unique research, I can not believe that there is much danger of that gap narrowing between now and the last race at Homestead. In fact, it most assuredly will grow as the season progresses. Junior’s ability to garner considerable television exposure is as much a credit to his likability and celebrity status during a race broadcast as to what he is doing on the track. His popularity is well known to television broadcasters, and they will continue to give his huge fanbase and the American public an inordinate amount of airtime regardless of his position on the track.

That’s not to say that Joe Gibbs made an unwise acquisition in the controversial younger brother of NASCAR’s 2004 Cup champion, Kurt Busch. On track, no owner could ask more of a driver than what Kyle Busch has achieved to date in his first year with a new team. And despite his demeanor, which many race-viewing fans find abrasive, his front-of-the-pack performances are giving his sponsors considerable value, as well – just not numbers approaching and/or surpassing those of Earnhardt Jr.

But even more telling as to the value of Junior to his sponsors vs. Kyle is that Dale Jr. has been able to top the survey without winning a race. So strong is the support and interest in the man that victory lane isn’t needed to justify their loyalty; whereas Kyle, though doing just fine in satisfying his corporate supporters’ exposure needs, has been on a romp though the NASCAR world that no one in recent memory can recall any other driver equaling. And as impressive and newsworthy as Kyle Busch’s 2008 accomplishments have been, it is only reasonable to assume that at some point, the highly competitive environment that is NASCAR will catch up to the Toyota driver – and he will come back down to earth. Once that happens, the cameras will turn to the next “hot” driver… but through it all, Earnhardt Jr. will still remain high on the exposure list.

The Joe Gibbs and Kyle Busch alliance may still have a potential problem on its hands, as well. As of now, Busch’s overall negative public image is being compensated for by his extraordinary early-season finishes. But should Busch’s win production fall off and he finds himself as an also-ran for an extended period of time, the potential is certainly there for corporate sponsors to begin to shy away from him and his not-so-endearing image. That’s not a real concern for HMS as Junior – though winless for more than two years – is still widely supported and maintains a positive image that sponsors, asked to pay millions of dollars for team sponsorships, cherish.

“Earnhardt has a proven track record of delivering for his sponsors, and that was evident when he was negotiating his new deals for this year,” said Wright.

And deliver, the man continues to do. Imagine what an advantage Rick Hendrick has when establishing sponsorship rates for corporations scampering to get their brand logos on the hood of Junior’s No. 88. Sure, sponsoring Dale Jr. might come at a premium – possibly costing a corporation an extra $5-$10 million – but he can produce $100 million or more a year in added advertising value for a company in comparison to any other driver.

The reality is that it requires a lot of money to go NASCAR Sprint Cup racing nowadays; but no one, including “Rowdy” Busch can generate it like Junior can – even with his track record so far this season.

And that’s my view from turn 5.

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