In mid-July, Stewart-Haas Racing, one of NASCAR’s top teams, announced that the U.S. Army would not be returning as the primary sponsor of Ryan Newman’s 39 Chevrolet in 2013. After a decade-long run as a NASCAR sponsor, the Army no longer believes that sponsorship draws enough recruits to warrant the money spent on it. Many companies in recent years have arrived at the same conclusion: Sponsorship is not resulting in a suitable return on investment. Fewer fans are coming to the tracks or watching races on television. Has NASCAR run its course?
As a professional-sports enterprise in the United States, NASCAR, founded in 1948, is relatively young. In its early years, motorsports were popular mostly in the Southeast. NASCAR made an auspicious entrance on the national scene with the running of the Daytona 500 in 1979 — the first race of that season and the first to be televised nationally, live and flag to flag. It ended in a last-lap crash between the two drivers in the lead, Donnie Allison and Cale Yarborough. Cameras caught the ensuing fistfight between them and Allison’s brother Bobby. NASCAR couldn’t have hoped for a more attention-grabbing national debut.
NASCAR developed a following outside the Southeast over the next two decades. By the late 1990s, it was working hard at going national. Longtime NASCAR tracks such as Rockingham and North Wilkesboro, both in North Carolina, lost their dates to new tracks in Southern California and Chicago.
Yet as NASCAR enjoyed its greatest financial success in the late 1990s and early 2000s in the course of its expansion to new markets, it was approaching rocky times just around the bend. Its transition from a blue-collar regional identity to one that was corporate-driven and national cost it some of its most devoted fans.
Today, when fiscal belt-tightening is a priority in many sectors of the economy, military and corporate sponsorships can look like a luxury. In Congress, Representatives Betty McCollum (D., Minn.) and Jack Kingston (R., Ga.) cosponsored a measure — an amendment to the most recent defense-appropriations bill — banning military spending on motorsports sponsorship. The amendment was defeated, but by a narrow margin, 216–202. If reintroduced, the ban could well pass if the economic climate hasn’t significantly improved.
Increasingly, the corporate world is finding that NASCAR sponsorship is not the profitable venture it was just a few years ago. The cost of fielding a team is high. A single set of tires, for example, good for only a few laps, costs around $2,000. Increases in sponsorship fees have not kept pace. A decade ago, a top NASCAR team could command about $25 million in sponsorship; today, the going rate to sponsor a front-running team is around $18 million.
Kenny Wallace, a TV analyst and current NASCAR driver, has seen NASCAR through multiple economic upturns and downturns. The son of a racer and the younger brother of Rusty Wallace, soon to be inducted into the NASCAR Hall of Fame, Wallace notes that the decline in the sponsorship fees that NASCAR commands has been accompanied by a decline as well in the number of sponsorships. Companies that not so long ago would commit to primary sponsorship of a Sprint Cup car for entire seasons have either pulled back, sponsoring a car for only selected races, or exited altogether.
Exacerbating this trend is NASCAR’s practice of barring certain sponsors to avoid competition with existing sponsors. The clearest example is cell-phone carriers. Since Sprint is the title sponsor of NASCAR’s premier division, no car is allowed to be sponsored by a competing company. This quasi-protectionism has turned away many willing sponsors. Cingular and Alltel used to sponsor top teams in the Sprint Cup Series, but no longer.
And it’s not only the competitors who are affected. Fans have been feeling the pressure as well. High ticket prices, combined with hotel, travel, and meal costs, have meant that fewer fans have been going to the tracks. For decades, tickets to races at the half-mile Bristol Motor Speedway in Tennessee were all but impossible to get. Its streak of 55 consecutive sellouts ended with the spring 2010 race. Wallace says that NASCAR and the individual tracks are loath to lower ticket prices, fearing that would signal a decline in the quality of their product.
NASCAR’s increasingly uneasy relationship with its own history and the evolution of drivers into corporate spokesmen are affecting the future of motorsports. Whereas MLB and the NFL tout their traditions and histories, NASCAR has often swept its own past under the rug. Its roots are in illegal activities — running moonshine on southern back roads during Prohibition, attempting to outrun the police.