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business newsAt-Risk Sports Teams: NASCAR
By
Justin Rohrlich
Jul 14, 2009 8:45 am
Can smaller sponsors make up for missing GM cash?
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No one ever thought they’d see Ron Hornaday Jr. win the NASCAR Camping World Truck series race at the Milwaukee Mile and choose not to perform a traditional victory burnout.
Burnouts have become a tradition, not to mention a surefire crowd-pleaser -- but burnouts are also one of the quickest ways to bust a drive shaft. And that’s not something cash-strapped race teams want -- or can afford -- to replace right now.
As Hornaday told reporters, “We’re saving dimes right now.”
Though lower-level racing series are getting the worst of it, top-tier teams aren’t immune. The Charlotte Observer, writing from the heart of NASCAR country, says “GM, which recently filed for Chapter 11 bankruptcy, made a tour …of its flagship Chevrolet-driving Sprint Cup organizations. Because of GM's crippling financial problems, it's scaling back its commitment to NASCAR.”
GM is said to be considering reducing funding for Kannapolis' Stewart-Haas, Concord's Hendrick Motorsports, Welcome's Richard Childress Racing and Concord's Earnhart-Ganassi Racing.
Ouch. That has to hurt. A top Sprint Cup team’s yearly budget is in the range of $20-$25 million.
Other teams losing funding are JR Motorsports -- which races in the second-tier Nationwide Series and is owned by Sprint Cup standout Dale Earnhardt Jr. -- and Kevin Harvick Inc., which is co-owned by superstar Harvick and his wife, DeLana. Harvick races in the third-tier Camping World Truck Series.
“Our discussions are indeed NASCAR-wide,” Chevy spokesman Terry Rhadigan said.GM has already dropped 4 of its 12 deals since last July, and with the US government taking a 60% stake in GM, the company “could be more prone to scrutiny from government officials like Massachusetts Congressman Barney Frank, who has questioned whether companies should be spending government money on sports promotions," according to ESPN.
No positions in stocks mentioned.
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