NASCAR pit stops for pink slips
Perhaps no one in the sports business has been affected quite like NASCAR, who will be laying off several workers due to lack of sponsorship. Scott Jagow talks race cars with sports commentator Diana Nyad.
Anheuser-Busch is an all-American company, from its St. Louis headquarters to its sponsorship of NASCAR's #9 Budweiser Dodge. How would foreign ownership change its image? (Todd Warshaw/Getty Images for NASCAR)
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TEXT OF INTERVIEW
Scott Jagow: The sports world has been hit by the financial crisis just like every other industry. But NASCAR may face the toughest challenge of all. It's highly dependant on sponsorship -- and the American car makers. The racing season ends this Sunday, and on Monday, we're hearing there could be a lot of layoffs.
Our business of sports commentator Diana Nyad is here. Diana, is this all about the loss of sponsorship?
Diana Nyad: There are definitely sponsors that are dropping out. Ford has dropped the Ford Craftsman Truck series. But what's really going to happen, the pink slips are with the crew. You know, there are several teams already who have dropped 50, they've dropped 50 guys, just you know, in the last couple weeks. But the heads are gonna roll come Monday.
Jagow: You know, you hear a lot of people, when they talk about the auto makers, that they put themselves in this situation by mismanaging over the years. What about NASCAR? Has it put itself in this situation?
Nyad: Well, Dale Earnhardt, Jr. -- you know, and he's an insider, but he's the first one to say they got greedy. When the popularity rose so high, and you know you have 120,000 people at some of the speedways, they decided to expand the season. So you know, according to Dale Earnhardt, Jr. and a lot of the fans, they're just exhausted at this point, it's just, they're saturated. It's too much racing.
Jagow: Too much, so cut back on the schedule?
Nyad: But it would also, obviously, cut costs. I mean, you can imagine, you know, how much fuel is being spent, how many practice laps are being run. Don't run so many parties, you know, for the week going into the races. I mean, you know, I heard through the grapevine that Joe Gibbs of Joe Gibbs racing has asked his people to analyze if they fly their private jet at a slower speed, how much fuel that will save. They're counting the pennies now.
Jagow: And how about the fans? I mean, are they still going to the races in as many numbers? Are they still watching on TV?
Nyad: The fans are definitely depleted at the racetrack. Now, plenty of empty seats. And as far as television -- last weekend was the penultimate race of the season, OK, so we're building up to supposedly the drama of the end of the season. With 34 laps to go, ABC switches and puts on America's Funniest Home Videos. And NASCAR felt that was the biggest slap in the face they've ever received.
Jagow: They switched it to ESPN or something?
Nyad: ESPN2.
Jagow: Wow. All right, Diana Nyad, our business of sports commentator. Thank you.
Nyad: Thanks, Scott.
Comments
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From Northport,, NY, 07/31/2009
I paint NASCAR RACING
From Moorhead, MN, 11/17/2008
NASCAR represents the inanity of modern American popular culture. Our country and the world is facing an energy crisis, and here we continue with the frivolous burning of valuable fuel. While Rome burns, we drive in circles.
From Sunrise, FL, 11/14/2008
Thank you for broadcasting a relevant economic piece on motorsports - my passion. Very refreshing, especially with the honest quote by Dale Earnhardt, Jr. , but I must say - although I'm not as big of a NASCAR fan as most Americans probably are, the fact that NASCAR considered ABC's broadcast of Pheonix "a slap in the face", as mentioned by Diana Nyad, is something they should have seen coming from day one. The network is notorious for preempting races (NASCAR or not) for other shows or sporting events, minus the Indianapolis 500. If NASCAR didn't know how ABC does TV coverage since years past, they need to seriously wake up from their popularity hangover.
From Washington, DC, 11/14/2008
I am a big fan of Marketplace Morning Report and was sorry to see it produce a story which falls so far below its usual standard of excellent reporting. The premise of the story is correct; the current economic downturn is having a severe negative effect on NASCAR. All the disjointed anecdotal information presented to support that premise is either flat out wrong or taken so far out of context that it looses all relevance. A few examples:
1) “Ford has dropped the Ford Craftsman Truck Series.” That is incorrect. Ford is not a sponsor of the truck series, Craftsman Tools is. Craftsman is dropping its title sponsorship of that series but it is being taken over by Camping World. Ms. Nyad may be confused because Ford offers factory support (engineering, equipment, etc) to teams that run Ford truck in the series, and that support will cease as of the end of this season, presumably for economic reason. However, the Camping World Truck Series will go on next season.
2) They over saturation issues discussed by Dale Earnhardt Jr. is less based on negative effects of the economy than it is on his belief that NASCAR has over marketed itself and diluted its potential marketing draw. The assertion that NASCAR expand the season with a chase because it got greedy with its own popularity is factually incorrect. NASCAR already had a 36 race season but starting in 2004 designated the last 10 races of the season to be a playoff for the championship, i.e. a Chase for the Cup.
3) ABC’s decision to switch coverage of the last 34 laps of the Phoenix race last weekend to its cable partner, ESPN2, has nothing to do with the negative effect of the economy on NASCAR. That’s just flat out incorrect. That decision was based on a whole different economic consideration: advertising revenue. Because of two lengthy delays, one for weather and one for a wreck on the track, the race had exceeded its expected length of time. ABC had already run all the commercials it sold for its race coverage. If it had stayed with the last 34 laps of the race it stood to loose ad revenue from the commercials it sold for America’s Funniest Home Videos. That decision was not about the bottom line of NASCAR, it was about the bottom line of ABC.
Once again, it was a great premise, and there’s an important story to tell, this particular attempt just sorely missed the mark.
From Richmond, VA, 11/14/2008
Hi guys. My colleague Michael Pitts and I teach a course at VCU's School of Business on "The Business of NASCAR". Many of the comments in this story are correct--to an extent. For example, yes the season is 36 points races long--but NASCAR didn't add 10 races to create the "Chase championship". There were 36 races run prior to the creation of the Race for the Chase (first 26 races) and then the Chase for the Sprint Cup Championship (last 10 races for the top 12 points leaders). Yes, both tracks and teams have been hit hard in recent--and not so recent--times. Although track attendance is off considerably at most tracks--RIR didn't sell out the September Sprint Cup race for the first time in 33 races--TV viewership has come up some. Still, fans are counting their pennies and making decisions about where discretionary money--if any--will be spent. Finally, the big three auto makers may indeed cut back--or even drop out--their affiliations with various teams. An article in today's NASCAR.com indicated the fall-out will be felt but individual teams are less dependent on much of the auto makers support that was given a couple of decades ago.
From Occoquan, VA, 11/14/2008
I'm a long-time fan of both 'Marketplace' and stock car racing. Just wanted to point out what I found to be a significant error in the November 14 segment on the economic downturn's effect on NASCAR. Diana Nyad reported that "This chase for the (Sprint) cup has added on...another full 10 weeks worth of racing." Incorrect. NASCAR, did not add 10 races to the season; rather, the sanctioning body some years ago simply designated the the last 10 races of the existing 36-race schedule as "The Chase", essentially a championship tournament for the drivers ranked 1 through 12 after the first 26 races of the season.
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