Race Weekend Central

Part II Of Our NASCAR Season Preview: Is It The Economy, Stupid?

Slowly, over a pristine beach, the sun rises and for 43 NASCAR lucky drivers at Daytona, a new opportunity dawns to add to the glorious history of the Great American Race. After a three-month hiatus, the Sprint Cup Series returns with its Super Bowl, the Daytona 500 to begin its new season by offering up the sport’s top-level prize… at 200 mile-an-hour speeds, of course.

But that’s just the tip of the iceberg, the start of a journey that takes us to Phoenix, New Hampshire and nearly two dozen American locales in between. As the 36-race season begins, along with its two exhibition shows the Frontstretch will be there, stride for stride covering these drivers and their stories every step of the way. But as we awake from our winter hibernation, so will many of you, preoccupied with life elsewhere during a season where football, Christmas, and anything but cars in circles takes center stage. So let us get you revved up once again, your heart pumping and your brain thinking through the trials and tribulations of the NASCAR season to come. Welcome to Frontstretch season preview time, all week setting up not only the Sprint Cup season but reintroducing the return of all your favorite columnists, returning to the weekly coverage they all love.

Roush -Fenway Racing’s No. 6 car, once sponsored by UPS will be one of a handful sitting on the sidelines, without sponsorship for much of 2012.

*Other 2012 Season Preview Articles*
“Part I: Crew Chief Silly Season”:https://frontstretch.com/article/37037/

Today’s Season Preview Topic: The sport looks like its car count for Sprint Cup will drop considerably this season, with former full-time sponsors cutting back and even big-time owners like Roush Fenway Racing and Richard Childress having to cut back from four to three cars. Is this one a temporary problem or a major crisis? Is there a way for NASCAR to cap spending on individual teams, or will that be up to the owners themselves?

Tom Bowles, Frontstretch.com Editor-In-Chief: To some degree, this question has taken on a new look with a half-dozen smaller Sprint Cup teams announced within the last few weeks. At one point, it looked like we could have up to a dozen start-and-parkers by March (over 25 percent of the grid each race) but that nightmarish fear has faded slightly.

Still, I think it’s clear when you have the runner-up in the season championship needing multiple sponsors to complete his 36-race schedule the price of sponsoring a top-tier team has gone through the roof. When Roush-Fenway suffered financial losses this offseason, they didn’t choose to cut down their asking price for Fortune 500 companies in order to keep four cars. Instead, they simply contracted to three, laying off employees but still keeping the bloated crew and costs that come with each team remaining. What am I talking about? Research and Development for future advances like the 2013 car, a once-absurd number of engineers (remember, they don’t drive or come to the track on Sundays) along with the needed wind-tunnel and computer simulation time in order to gain that extra thousandth of a second.

That’s problematic, because when the asking price can be upwards of $20 million to fit within a four-car outfit how is a new owner going to come in and compete? Unless they’ve got $40 million to invest in two cars – one’s not enough – it’s a tough road to hoe and even then you have to convince a top-level team to give you engine and chassis equipment, hoping it’s strong enough for you to compete at their level. Even Richard Petty Motorsports, on the Ford side with millions in backing from taxi mogul Andrew Murstein and Co. has struggled to gain footing in a world where the price to play is reaching NHL and NBA-type levels.

How do you stop it? NASCAR could put the franchise tag, grandfathering owners into a system that’s similar to the stick and ball sports instead of leaving everyone as a private contractor. But that’s proven to be a rather unpopular solution; instead, the answer may come within the small teams themselves. Can an underdog, separate operation like, say, this new BK Racing team with Landon Cassill compete for wins and top-5 finishes at a fraction of the cost beyond restrictor plate races? Only then will the business model begin to change. But I’m not optimistic.

With dwindling sponsors, are the days of a full field gone by? Will economic pressures cause owners to cut back on performance?

Phil Allaway, Newsletter Editor: To a certain extent, some of the owners have, in fact, cut the price of admission. Penske referenced something about a full season deal now costing $13 million instead of $25 million recently. However, some owners (most notably Hendrick) have not cut their prices. Of course, some of their drivers can still command absolute top dollar (see Dale Earnhardt, Jr.’s $40 million package with Pepsi and the National Guard). I’d argue that NASCAR cannot officially cap spending, but they can do other things (limiting the amount of cars per team, mandating certain parts to save money, etc.). As for the sponsor exodus, we’re in something like year 4 or 5 of it. If it’s not already a crisis, then it never will be.

Matt McLaughlin, Senior Writer & Cup Postrace Analyst: As fast as the drivers and teams are, they can’t outrun the U.S. Economy. While there are some encouraging signs things are getting better (for most people, anyway) there are still a lot of jokers in the deck this election year, particularly the looming Israeli-Iran crisis that could send gas prices through the roof and ignite yet another protracted war. As difficult as these economic conditions might be for the teams, though, there’s a positive side to the situation as well. Top-tier programs will just have to learn to do more with less money and remain competitive, naturally capping costs. For example, how much faster is a new wildebeest hide interior in the corporate plane going to make that team’s race car? Quite frankly, the cost of funding a Cup team these days is obscene and even when the economic recovery does take place, it’s going to be tough to entice corporations into (or back into the game) given the cost. I mean come on, really, the Ollie’s Bargain Outlet Chevy? Is this a joke from _Talladega Nights?_

Amy Henderson, Co-Managing Editor: I’ve long been a proponent of a cap in the Nationwide and Truck Series, but I don’t think it’s as clear-cut in the Cup ranks. Cutting teams may prove to be a boon for some organizations – the four-car model has never been proven to be the best method, with one or more usually clearly not on the level of the others. In fact, that’s always been the story at Childress, Roush Fenway, and Hendrick. So I don’t think dropping the numbers on-track is necessarily bad for an individual organization at all. As for the cost of sponsorship, the big teams and top-dollar sponsors have nobody to blame but themselves for driving up the cost. Fifteen years ago, a $10 – $12 million budget equaled a winning car, and now that can barely compete. Why? Because the big boys poured in more and more money until they priced everyone else out. There is nowhere else to place the blame; I said that last year “here.”:https://frontstretch.com/ahenderson/36136/ I don’t feel sorry for the big teams, but it does make it ridiculously difficult for new ones to enter the sport and have a prayer of surviving. That’s the real casualty and tragedy here, not the big teams having to cut back to three $25 million cars.

Beth Lunkenheimer, Co-Managing Editor: Sure, the car count has fallen for the season as teams have been forced to cut back, but if anyone thinks there will be a short field at all, they’re in for a surprise. Between all of the teams that have expressed interest in taking a shot at the Cup Series and those start and park teams that have been around for years, each race will feature a full field. Of course, if the sport continues down the road it’s on, the drop in car counts can become a serious problem; however, it’s up to the team owners to fix it. NASCAR can’t step in and put a cap on their spending because it would be impossible to monitor, plus it’s hard to tell a company that they can only contribute a certain amount of funds when they’re willing to put money into the sport. Instead, the sanctioning body could step in and limit the amount of wind tunnel time and other testing the larger teams can participate in so smaller teams can remain competitive with their limited amount of funding. But the bottom line is that the team owners need to police themselves and look for ways to decrease the day-to-day expenses required.

Toni Montgomery, Senior Editor & Head Of IndyCar Coverage: It is a result, for the most part, of the economy. Still, going forward it’s likely for the immediate future that companies may not be willing to spend as much on sponsorship. Teams may need to rethink both how they sell space on the car (i.e. in smaller sponsor packages for companies rather than larger ones).

Mike Neff, Senior Writer & Short Track Analyst: It is more than a temporary concern, but it isn’t really a crisis. The economy has begun to turn around and attendance is beginning to rebound in the sport. Provided numbers continue to rise, more sponsors will return and the price they’ll pay will naturally go up. However, the days of a single primary sponsor are, for the most part, over and teams are going to have to become better at piecing together sponsorships. There is no way for NASCAR to cap spending because when they do something to stop it somewhere, the owners will just spend it in other places. The sport has always been about the haves and the have nots and you’re never going to change that.

S.D. Grady, Senior Editor: The only people to be disappointed at the possibility of less than a 43-car field will be NASCAR. Fewer sponsors and less money will equal less glitz. And that’s not a bad thing. Will it materially affect the racing? I’m thinking not. Those with budgets will win lots of races, those without will S&P. Life goes on.

Tony Lumbis, Business Reporter & Marketing Manager: Just like the economy, NASCAR will go through cycles and the sport is in a transition period once again. NASCAR does not need to cap spending; the teams will be forced to do that on their own. It’s important to note that while some of the juggernauts are consolidating, teams which were built on the concept of running lean, like Tommy Baldwin Racing, are expanding.

Furthermore, the environment is prime for new teams to come on the scene at a rate we haven’t seen before. Will the smaller teams go head to head with the “super teams” on a weekly basis? Absolutely not. Do I expect some of the new teams to not even survive the year? Yep. But I do think in the end, smaller teams will start to make up for consolidation and as the economy gets better, pick up enough funding to race the entire distance. Expect this transition to take several years, though.

John Potts, Senior Writer & Historical Columnist: I don’t think there’s a way for NASCAR to limit the spending. These guys are just a larger model of what happens at the local tracks. A racer will spend every dollar he can beg, steal, or borrow to go faster. On that level, an engine claim, shock claim, or full car claim rule is used to control it at times. Lots of luck getting that to happen on the top tier…

Vito Pugliese, Senior Writer: If NASCAR was exploring ways to save money, switching over to fuel injection after 40 years of success with a Holley 4-bbl was probably not the way to go about it. The fact that Jack Roush’s flagship No. 6 needs to be mothballed is lamentable if not shameful, and RCR has to split what once was a Chase and championship contender with three drivers? That is not meant to be a knock on Roush or Childress, as it is yet another statement regarding the economy and where precious corporate marketing dollars are spent. What we are seeing has been about five years in the making, and is going to get worse as a new iteration of the COT is due next season, and new tensions in the Middle East and world banks threaten to curtail any kind of growth on our side of the pond.

It will end up being a self-policing exercise. You will see more teams dialing back to two or three teams, forming strategic alliances with start and parkers and smaller teams to help fund and assist in testing, and some will likely go the way of the Wood Brothers – running the bigger races and select tracks, while omitting others from their schedule.

“Contact The Frontstretch Staff”:https://frontstretch.com/contact/14345/

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