Did You Notice? … The sport’s reigning NASCAR championship team won’t even exist in 2019? Tuesday’s announcement (Sept. 4) Furniture Row Racing will shut down this November should send chills down the spine of every racing owner. A sport that for years dealt with mounting financial wounds through indifference or simply covering them up suddenly had the band-aid ripped off in public.
Boy, does it hurt.
What if the Philadelphia Eagles, the reigning Super Bowl champions, announced before their season opener this Thursday they were shutting down, effective this coming January? What if the NBA’s Golden State Warriors said they no longer had a road to profitability? Or what if Serena Williams chose retirement from tennis, effective immediately, claiming the travel expenses had ballooned out of control?
Their sport would panic. Emergency meetings would be held, the commissioner would be summoned to restore order and behind-the-scenes conversations with sponsors would be a daily occurrence. A PR blitz would start immediately to calm observers about the long-term health of the sport.
We’ll get back to that. But in terms of a seismic shift in NASCAR, make no mistake: Tuesday afternoon was the earthquake. Team owner Barney Visser, fresh off the highs of a championship, just eight months later lost the necessary funding to stay competitive.
“This is not good for anybody,” he said. “The numbers just don’t add up. I would have to borrow money to continue as a competitive team and I’m not going to do that.”
The car’s primary sponsor, 5-hour ENERGY, chose to leave the team and NASCAR effective the end of this season. They join Lowe’s, Target, Dollar General and Farmers Insurance as blockbuster corporate entities in a healthy economy dropping their primary sponsorship within the past two years. (Lowe’s will leave the No. 48 team of seven-time champion Jimmie Johnson effective the end of 2018.)
Money from Bass Pro Shops remained at FRR but it wasn’t enough for a 36-race schedule. And despite driver Martin Truex Jr.’s status as, you know, the defending Monster Energy NASCAR Cup Series champion, no one stepped up to bridge the gap. That meant this single-car team from Denver, Colo. which conquered the odds last season, went from the mountaintop straight to the trash heap.
Furniture Row Racing brought in Martin Truex Jr. when he was down.
— NASCAR on NBC (@NASCARonNBC) September 4, 2018
“We’ve been aggressively seeking sponsorship to replace 5-hour ENERGY and to offset the rising costs of continuing a team alliance with Joe Gibbs Racing but haven’t had any success,” Visser said. “I feel that it’s only proper to make the decision at this time to allow all team members to start seeking employment for next year.”
Question is, where will they find it? A field that has been reduced from 43 cars to 40 is struggling simply to fill those slots. Over in the XFINITY Series, the field will be just 38 cars next season; the Truck Series is only 32. A handful of start-and-park teams litter those divisions just so some small-team owners can survive.
It’s clear from this announcement NASCAR has a four-alarm fire of a problem. It’s not like Truex’s speed had tailed off this season. His four wins rank only behind Kevin Harvick and current MENCS point leader Kyle Busch. What more did FRR have to do in order to retain sponsorship? You could see the frustration in Truex these past few months as 5-hour wasn’t feeling like there was a true return on its investment. One of the sport’s best drivers this decade could go without while a guy like Alex Bowman, still winless on the Cup level, gets upwards of $20 million a year?
It’s no offense to Bowman, one of the sport’s up-and-coming drivers. But the business model in place appears to make no sense. Companies align themselves based on branding, not necessarily talent, while purse money from wins does little to make quality race teams more competitive. You don’t have to be an athlete to make money in NASCAR — you just have to have the right demeanor in the boardroom.
And those sponsors, bailing in record numbers? You openly have to wonder if they’re right. TV ratings are down 15-20 percent this year and up to 50 percent over the last five. Revenue and fan interest, aside from the television deal, is steadily decreasing while the sport struggles to redefine itself in the wake of high-profile driver retirements.
Quick, name one Fortune 500 company that’s added its name to a car (not to NASCAR’s official sponsor rolls) in 2018? You’d be hard pressed to find them. There’s a shrinking number of people willing to bite in a sport whose expenses only keep climbing. That includes Visser, whose Furniture Row company once sponsored his car full-time from the mid-2000s all the way through 2015.
NASCAR’s Race Team Alliance (RTA), the ownership group in charge of capping these costs, hasn’t been able to do so fast enough. It’s notable Visser wasn’t a member, keeping some distance but smartly realizing the only road to a championship was through partnering with a superteam. That’s right — in order to stay competitive, you have to work with one of your rivals and pay them in order to level the playing field.
FRR didn’t do this alone. JGR’s four-car alliance gave them a helping hand in both information, engines and chassis setup. It feels the RTA is perfect for the high-class owners with those resources to protect themselves. What does it do for the little guy trying to make it? Visser’s remained silent in his absence from the RTA other than it didn’t work for him, but you would think this situation should cause the organization to rally around a fallen owner, no? Instead, all indications are JGR raised the price of their alliance at a time FRR was looking for money. Wounded, the bigger shark ate the fish instead of ensuring its survival.
The 69-year-old had a heart attack last year which he admits changed his life perspective. But he’s also an incredibly smart businessman, building one of the top home furnishing companies in the country with Furniture Row. He understands financial realities and when the climate tells you it’s time to get out. And let’s not forget, this man had two NASCAR teams as recently as 2017 but shut down the second when there was no way it would remain financially viable.
It shouldn’t be surprising he’s doing the same here.
Toyota also plays a role in supporting a program like FRR but they’re only willing to support so many cars, it seems. Their roster (pending Leavine Family Racing) could drop to only four next season as Truex will be absorbed into JGR. (Reports from multiple outlets have Daniel Suarez ousted from the No. 19 in favor of Truex and crew chief Cole Pearn). NASCAR’s two other manufacturers, Ford and Chevy, may soon consolidate if costs in terms of chassis and equipment keep rising.
Which brings us back to that doomsday scenario. NASCAR’s Roger Goodell, Brian France, currently finds himself in rehab one month removed from a DUI and drug possession arrest out in the Hamptons. Replacement Jim France has yet to hold a press conference since assuming a temporary role. This chaos surrounds persistent rumors the entire series is being put up for sale.
And yet… there’s nothing, not a peep from the guys at the top. There’s no firm understanding of the sport’s long-term direction. There’s no rerouting of additional television funds into ownership to ensure survival. There’s no plan to shore up the franchising system which, at the present time, isn’t working well. Don’t expect a lot of money for Visser’s guaranteed charter spot considering the last one, at now-bankrupt BK Racing sold for .09 percent of what the last NFL sale was worth to Front Row Motorsports.
Could you imagine an actual company out in the business world working in this way? The story sounds more like a Toys ‘R’ Us bankruptcy than what is (still) one of the largest national sports in America. There’s still time to right this ship and keep it from sinking.
But what the sport needs is a leader, willing to step up, fix the problems and find a way to put out the fire. Instead? The fire truck sits parked in a stall down in Florida somewhere. It’s just watching as the place burns and people flee.
Visser’s the latest to find his way out. Who’s next?