NASCAR: Racing’s financial dilemma

 It has become an unavoidable fact of life, that the economy is a major concern for everyone from individuals, to corporations and yes, even NASCAR.    It seems hard to imagine that NASCAR, the second largest sport in America, second only to the NFL, is having a difficult time getting enough fans in the seats for the tracks to keep their doors open.

      Recently, Gateway International Speedway, which was one of the anticipated stops on the Nationwide schedule each year, announced that is will not be back for another season in 2011.   This is the second track in as many years to close its doors to NASCAR due to financial losses.    Last year, the Milwaukee Mile announced they couldn’t afford to pay NASCAR, and immediately shut down operations within weeks of hosting its last race.    Over the past few years, finances have been blamed for the closure of North Wilkesboro and Rockingham (The Rock), two of NASCAR’s original tracks.   I remember several years ago, when NASCAR pulled the plug at Rockingham.   Fans were outraged that NASCAR would slam the door on part of its history.   This has turned out to be a double edged sword for race fans.   Fans claim it is just too expensive to go and watch NASCAR races, but they also have to be ready for the resulting consequences of that track having to close its doors because it can’t make money.     

     That same thinking by NASCAR is in part what has led to the reshuffling of next year’s schedule.   Both of the tracks at Atlanta and at Fontana, California will be losing one of their two Cup races in 2011.    Both tracks were told by NASCAR that if they didn’t fill seats, they would lose a race.   Attendance did not increase and NASCAR has lived up to its promise.   Tracks can no longer expect their history to save them.  It didn’t save Rockingham or North Wilkesboro, and as the economy continues to struggle, it won’t save others in the future.

      NASCAR has also taken steps to try and save race teams more money.   A couple of years ago, they did away with testing sessions at NASCAR sanctioned tracks.   One of the ideas in the design of the “Car of Tomorrow” was for cost containment.   They have also reduced some race weekends from four days down to three.    On the other side of the equation, NASCAR has also reduced the amount of purse money for the competitors by 10%, in hopes of easing the burden on the tracks.   

      With the economy going south, the cost of racing has unfortunately skyrocketed over the past few years.    15 years ago, a well funded team was getting between $5 and 10 million dollars from a sponsor for the season.    That figure has now ballooned to between $25 and 30 million per season, and the gap between the “haves” and the “have nots” has grown even bigger.    It is also getting harder and harder to find those sponsorships with enough marketing money to throw that kind of commitment to a race team.     Dupont has been Jeff Gordon’s sponsor since he came into the sport back in 1992, a partnership that seemed destined to last until the day Gordon retired from the sport.     However, next season, despite all of Gordon’s success through the years, Dupont is cutting back and the #24 team is looking for a major sponsor for 2011.     The winner’s check also does not seem to go as far as it used to.   For example, when David Reutimann won at Chicago several weeks ago, the #00 team’s winner’s check was $321,531.   To most all of us that figure is a huge amount of money, but to an upper level NASCAR team that amount just about covers their expenses for that weekend.     

      Race fans are becoming more and more aware of the fact that NASCAR is a business, just like the company that pays you your paycheck and just like your local race track.  If the money doesn’t come in to pay the bills, the end result is pretty obvious, the doors will close.  While the fans depend on the tracks promoting races, the tracks depend on those fans buying tickets.   Likewise, the communities that have race tracks depend on the revenue brought in by the fans and the teams.   So like it or not my fellow race fans, we are all in this thing together.  When one part of the equation fails, it unfortunately results in a no win situation for all of us… the fans, the tracks, the drivers, the teams and our communities.    On a positive note, NASCAR is strong and NASCAR will survive these tough times.   The reality that we face however, is that this is sadly an issue that doesn’t appear to be going away anytime soon.