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Sponsor Loss a Problem for NASCAR

Sep 24, 2009 – 2:29 PM
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Geoffrey Miller

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It's never good news in a sport that has its bills so heavily footed by outside corporations when two sponsors announce in the same week of their intentions to not return next season.

What's more troubling, though, is that these two sponsors -- liquor competitors Jack Daniel's and Jim Beam -- seem like such a natural fit to be advertising to NASCAR's fan base. In fact, you'd probably be on quite the search to head to the infield tailgate of any race with the goal of finding a fan who doesn't prefer one or the other.

But thanks to what amounts to be a seemingly endless spree of teams spending money to just stay competitive, both companies have found the price required to be NASCAR sponsors too high to get an ample return on investment.

Of course, neither company directly said they were pulling out the sport for cost reasons, but let's be real -- if the price is manageable and the bottles of bourbon and whiskey are coming off the shelves in the proper numbers, both would still be sponsoring race cars. The demographics of the sport just align too well.

The same could easily be said about the sponsors that have either left the sport in the past few seasons or that have made plans to leave. DeWalt, the longtime sponsor of Matt Kenseth, started to sell off races to other companies a few years ago and announced earlier this season that it will no longer sponsor Kenseth's machine as it has done since 2000.

Another sponsor, Bass Pro Shops, has decidedly cut back on the number of races that it has appeared as the primary sponsor of Martin Truex Jr.'s car in 2009. Guitar Hero, Garmin, GE and plenty of other companies have appeared on the race car this season -- a year after BPS was the primary for virtually every race.

In fact, the use of multiple primary sponsors in an attempt to defray the overall cost from one single sponsor has become the norm thanks to the higher costs of racing. Two of NASCAR's biggest names -- Dale Earnhardt Jr. and Tony Stewart -- both have relatively new deals with multiple partners, not just a sole company, to make it more affordable for their partners to be in NASCAR.

Certainly, the ability to land multiple sponsors on a race car is a change in the marketing dynamic that teams were employing just a few years ago. The evolution is intelligent, but it's also indicative of the higher prices creating tougher sponsorship sells.

The higher costs, though, aren't something that can necessarily be regulated or held in check by the sanctioning body. NASCAR has always been a sport based on free enterprise and with that has come the realization that by spending more, a team will go faster. Obviously, there's anomalies to the system, but by and far its true.

Cost regulations aren't an easy thing to touch in NASCAR. A salary cap is not only virtually impossible to implement on teams that operate as independent contractors, but also nearly impossible to regulate.

The best NASCAR, as a sanctioning body, can do is limit what teams can do on the race track and what they can race on it. The policy enacted to severely limit testing is part of those cost-reduction measures and, depending on who you ask, the Car of Tomorrow initiative can do the same thing.

Regardless, NASCAR is in a tough spot at the moment. The costs of competition are still rising and the number of sponsors willing to shell out to cover those seems to be dwindling. It's not exactly a picture of optimism for the future of sponsorship in the sport.
Filed under: Sports

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