NASCAR Running Out of Gas?
By Ryan Goldberg Oct 22, 2008 9:50 am
Recession forces America to forgo second-favorite sport.
NASCAR’s television ratings in the US are second only to those of professional football. Its fans -- who might be the most loyal of any sport, with the possible exception of European soccer -- spend more than $3 billion on official products annually. But a mountain of financial problems has kept fans away this year. Even loyalty has a price.
Still more troubling is that the sport’s sponsors include a number of the financial, automotive, and consumer goods companies hardest-hit by the economic downturn. General Motors (GM), Chrysler, Sears (SHLD) and Chevron (CVX) will cut or drop sponsorships next season. Dario Franchitti, the 2007 Indianapolis 500 winner, switched to NASCAR this year - but was forced out of the series because of a lack of sponsors.
Teams with legendary family names in stock-car racing -- Petty, Waltrip, and Earnhardt -- may enter 2009 with unfunded cars. Because the cost of running a top team is so high, sponsorships generally run from $25 to $30 million. Several reports indicate that the series could even have trouble filling 43-car fields next season.
“It’s a scary time right now,” Jeff Gordon, 4-time NASCAR champion, said recently. “We see strong teams struggling to get sponsorship.”
Earlier this month, International Speedway Corp (ISCA), which operates 13 motorsports facilities, including the home of the Daytona 500, cut its fiscal 2008 forecast for the second time this year because of lower spending in the current economic environment. NASCAR and International Speedway are basically one in the same: The France family started and still runs both organizations. The only other public company that hosts NASCAR events is Speedway Motorsports (TRK), which operates 7 racetracks.
The France family, however, isn’t gun-shy. According to a recent Barron’s article, the family, already the controlling shareholder, has been steadily buying shares in its own company.
Although some teams may be forced to drop out of NASCAR, the league -- whose expansion from regional to national popularity has been something to behold -- is here to stay. It doesn’t hurt that it has some powerful friends: In the $700 billion bailout plan passed earlier this month, NASCAR tracks got some help. Motorsports complexes will now be classified as entertainment complexes -- think amusement parks -- for tax purposes. Technically, it provides a 2-year extension of a 2004 statute that allows the racetracks to depreciate their investment at a faster rate.
Still, it’s the type of pork that Joe Six-Pack -- even if he plans to vote for anti-pork crusader John McCain -- would appreciate.
For more on NASCAR, check out Hoofy & Boo's always astute report.
No positions in stocks mentioned.
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Reply
2008-10-22 14:34:52
Auto Racing Stocks
Ryan,
Do a little more research before you write a story. DVD and WRGI.ob also own tracks.
Do a little more research before you write a story. DVD and WRGI.ob also own tracks.
2008-10-22 17:46:10
Oh cheez whiz...
NASCAR running out of sponsors...
Gee, some of those guys might have to come back down to the county fair and learn how to drive in the demolition derbies again.
One more reason to turn off the TeeeVeees.
Maybe they can combine NFL and NASCAR and just drive back and forth....
Gee, some of those guys might have to come back down to the county fair and learn how to drive in the demolition derbies again.
One more reason to turn off the TeeeVeees.
Maybe they can combine NFL and NASCAR and just drive back and forth....
2008-10-22 18:06:21
Actually, in addition to International Speedway and Speedway Motorsports, Dover Motorsports, Inc. (DVD) is also a public company that hosts a number of NASCAR events, including 2 Sprint Cup Series races.
2008-10-22 19:04:42
Huffy and Boo - Thank You
LOL...thank you for Huffy and Boo...they keep me laughing.
Watch the video...
On a related note: The Cowboys, The Yankees, and Goldman Sachs teaming up to form a stadium concessoins company (Legends Hospitality Management) was BIZARRE.
Great! Now I can pay $15 for a hot dog, $20 for an InBev Budweiser, and $99 for a sweatshirt with an embroidered Ben Bernake. Maybe I'll buy both at a Redskins game and claim it as a write off; seems to work for everyone else.
Wait...I need that money for macaroni and cheese...sorry guys!
Watch the video...
On a related note: The Cowboys, The Yankees, and Goldman Sachs teaming up to form a stadium concessoins company (Legends Hospitality Management) was BIZARRE.
Great! Now I can pay $15 for a hot dog, $20 for an InBev Budweiser, and $99 for a sweatshirt with an embroidered Ben Bernake. Maybe I'll buy both at a Redskins game and claim it as a write off; seems to work for everyone else.
Wait...I need that money for macaroni and cheese...sorry guys!
2008-10-22 22:47:24
What ever happened to NASCAR?
For those familiar with Professor Depew's threads about Simulacra, (Replacing an original of something with an imitation until the imitation becomes the standard in which the value is placed) I would submit that NASCAR has progressed to the point where the original sport could barley be recognized by viewing the current one.
Once a sport that highlighted cars actually produced by automotive manufacturers (the SC stands for Stock Car) and bred in the southern tradition of moonshine runners outpacing the law. There was a time when Mario and his brother John drove Hudson Hornets that had started out life in a dealers showroom, to victory.
Its roots and traditions have been replaced by cars that have no mechanical relation to the type of car that is represented by the vague body shape and hood emblem they carry. These turn out to be exactly one layer of sheet metal thick. A company sponsoring one of these cars learns nothing about making a better product. Sponsorship is a mere gimmick to subliminally flash the company moniker past the fans at 200 mph while they now indignantly grumble that some of the cars have Toyota engines in them. They openly ask weather that fact has spoiled the sport for them! Never mind that these cars have not shared power trains with factory cars for decades.
The cars are mere high speed billboards to be plastered with decals of sponsors until you can not tell what the original color of the car was. And since the point of improving the performance of cars has long since been replaced by chasing points and ego gratification I think it would be entirely appropriate to change NASCAR to NAEGAR (National Association of Ego Gratification Auto Racing). But now that I see that spelled out I don't think the southern fan base would be very accepting of the idea.
Along these lines, I spotted something down at Wal Mart the other day in the clearance isle. There was a pile of twenty or more DVD's that were all the same. They had been marked down to two bucks from fifteen. The subject was Dale Earnhart and the catch line was "He was a legend and he was one of us". I wonder if attempting to recapture past glory by placing the dead on pedestals is the final act in process of Simulacra. If it is I don't think it is working because those DVD's have been there a long time.
Once a sport that highlighted cars actually produced by automotive manufacturers (the SC stands for Stock Car) and bred in the southern tradition of moonshine runners outpacing the law. There was a time when Mario and his brother John drove Hudson Hornets that had started out life in a dealers showroom, to victory.
Its roots and traditions have been replaced by cars that have no mechanical relation to the type of car that is represented by the vague body shape and hood emblem they carry. These turn out to be exactly one layer of sheet metal thick. A company sponsoring one of these cars learns nothing about making a better product. Sponsorship is a mere gimmick to subliminally flash the company moniker past the fans at 200 mph while they now indignantly grumble that some of the cars have Toyota engines in them. They openly ask weather that fact has spoiled the sport for them! Never mind that these cars have not shared power trains with factory cars for decades.
The cars are mere high speed billboards to be plastered with decals of sponsors until you can not tell what the original color of the car was. And since the point of improving the performance of cars has long since been replaced by chasing points and ego gratification I think it would be entirely appropriate to change NASCAR to NAEGAR (National Association of Ego Gratification Auto Racing). But now that I see that spelled out I don't think the southern fan base would be very accepting of the idea.
Along these lines, I spotted something down at Wal Mart the other day in the clearance isle. There was a pile of twenty or more DVD's that were all the same. They had been marked down to two bucks from fifteen. The subject was Dale Earnhart and the catch line was "He was a legend and he was one of us". I wonder if attempting to recapture past glory by placing the dead on pedestals is the final act in process of Simulacra. If it is I don't think it is working because those DVD's have been there a long time.
2008-10-22 23:25:41
Rerun?
I get the distinct impression I've already read this article here or on another website. Is that right, or does it just ring similar? Same thing with the "hedge fund manager quitting" article. Hmm... reruns?
2008-10-23 03:09:44
NASCAR...
is a sickness far worse than AIDS or syphillis. Glorifying gas guzzling during an energy crisis, the earsplitting noise, horrific crashes, deaths, dismemberments, ad nauseum, just illustrates what kind of mentally ill people the viewers and participants really are. It is a throwback to the days of the Coliseum in Rome with the christians and the lions.
2008-10-23 21:20:13
Not to Worry
The Wall Street Bail out Bill included significant tax breaks for NASCAR.
No, I'm not making this up. See section 371 of the Bill.
Lovely, no?
No, I'm not making this up. See section 371 of the Bill.
Lovely, no?
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