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Holding a Pretty Wheel: Lean Times or Cash Cow, NASCAR Meets the Economy

There has certainly been much written lately about the state of the economy and how it effects NASCAR. Sponsors pulling out; teams, especially in the series below Sprint Cup, cutting schedules or folding altogether (remember just a year ago when four or more teams went home each week? Now it’s more often two, maybe three); teams cutting costs – the list goes on. Surprisingly, though, there hasn’t been as much written about the economic state of NASCAR from the ground up – what effect is the current economy having on the largest part of the NASCAR pyramid, the fans?

While the immediate effect of an economic slowdown is on the corporate end, eventually, the fans who patronize the individual races will feel the pinch as well, and then track owners feel it. But does NASCAR itself feel the strain?

Interesting questions, these, and pertinent as the economic downturn continues and affects more and more people each day. There are empty seats at racetracks and many fans who do go are foregoing taking their gas-guzzling motorhomes and gas generators on week-long jaunts in favor of shorter stays or day trips to the track. Tracks that historically sell out are still hawking tickets into race week, and tracks that don’t fill the seats in better times are filled even more sparsely. Chevrolet has pulled sponsorship from several tracks as financial woes continue, and this may become a trend as advertising dollars are rerouted to be spent on reaching a wider audience than those at a track on raceday.

Even at tracks that are selling all of their tickets, there are empty seats. Perhaps these belong to people who bought them a year ago and, when the time came to pay for the gas and hotel rooms for the race weekend, they simply can’t afford the luxury this year. Perhaps there are blocks owned by corporations who suddenly didn’t have the clients to woo with them. Whatever the reason, when fans don’t attend a race, the track ownership isn’t the only entity that suffers. Local businesses also take a hit in the form of empty hotel rooms, fewer meals eaten at restaurants, and less business at the track itself if they contract their services.

Local tracks have suffered, too. Smaller fields have become a norm at many local venues as teams have to pick and choose races to enter and how far they want to haul a trailer on today’s gas prices. Attendance might be stable – after all, local tracks are inexpensive, close by, and fun – but will the crowds come if there are barely enough cars to fill the field in a feature?

The big tracks can – and some have – taken measures to attract fans whose finances have them on the fence. Lower ticket prices or weekend packages have become available, and some tracks under the Speedway Motorsports Inc. (SMI) banner have even created “all-you-can-eat” sections, where the price of a ticket includes a variety of standard track fare. New Hampshire Motor Speedway gave away gas cards to fans whose seats were chosen in a random drawing. But it’s no longer easy to pretend there isn’t some bleeding somewhere.

Sponsors themselves are fed by the fans – an astounding number of race fans shop a particular store or buy certain products because of sponsor affiliation with their favorite drivers. But as the cost of household items skyrockets, how long will it be before many fans are forced to switch to less expensive brands or shop at discount stores? While race fans don’t keep any business afloat on their own, the economy does affect sponsors, and some will find themselves having to choose whether or not to continue sponsoring a racecar, driver or track. Win on Sunday, sell on Monday cannot sustain the ailing manufacturers in the face of smaller, cheaper, more fuel-efficient vehicles from abroad.

But what of NASCAR themselves? How much does the parent company suffer in comparison to the fans, the tracks, and the sponsors? Perhaps not nearly so much. Not including International Speedway Corporation (ISC), also owed by the France family, the Frances don’t seem to be suffering on the same level of others.

Sure there are ups and downs. NASCAR had to slash the price of title sponsorship before Nationwide would buy into the second series, and no title sponsor has been named to replace Craftsman in the truck series, though there have been several contenders. Also, they may lose a few minor sponsors, such as the “Official cheese/aspirin/pencil of NASCAR,” and enough of these could make a significant dent. However, the company stands to make money elsewhere – in television. When fans don’t have the money to go to the track, they will likely watch the race on TV and NASCAR can use ratings, which have stabilized and sometimes increased slightly this year after a few years of decline, as leverage in contract negotiations. NASCAR makes the lion’s share of money on television. One other area in which NASCAR has perhaps influenced fans to spend is merchandise, and gimmicks such as the Chase have certainly played well into that hand. In addition to the usual gear, fans can now buy a variety of Chase memorabilia, and NASCAR gets royalties every time. Fans who can’t get to the track might still buy their driver’s t-shirts and diecasts online, perhaps as a sort of consolation. It certainly looks as though the NASCAR corporation is doing better than its individual parts.

The economy is and always has been a cyclical beast; though signs point to a recession, eventually, there will be an upturn. The cycle will have to take an upturn to even out. However, the long-term impact on the racing industry remains to be seen. Will the fans return in droves, bringing their wallets with them, or will they have long since moved on to a less expensive pastime? Flip a coin…

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