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Attracting NASCAR sponsors gets tough as economy falters

Chip Ganassi Racing with Felix Sabates has been among the top NASCAR Sprint Cup teams in recent years. It has employed big-name drivers, enjoyed the respect of its fellow competitors and was competitive on the racetrack.

But earlier this year, Ganassi sent a shock wave through NASCAR when it was forced to send one of its three cars to the garage and lay off a driver and scores of team members because of a lack of sponsorship.

What ensued was a fired-up debate about the state of auto racing in these times of economic chaos.

If Ganassi couldn’t find sponsorship — sponsorship for a car driven by 2007 Indianapolis 500 winner Dario Franchitti — what is the future, some wonder, of NASCAR?

The prevailing view seems to be that the future looks challenging on the car sponsorship front, but far from lethal.

Asked whether panic had set in at his team, Steve Lauletta, president of Chip Ganassi Racing, said: “Exactly the opposite. We feel good about where we are.”

The Sprint Cup series has had no problem filling race fields this season. The race Sunday at Kansas Speedway, for example, has 45 cars currently entered, and there are only 43 spots available.

The 45 is not a big number, but the farther races move from the Southeastern base of NASCAR, the entry lists tend to get smaller. All have some form of sponsorship.

Ask NASCAR about the loss of some sponsors — and there have been several of the big-name variety who have left — and they will point out that new sponsors have come in to offset the losses.

It has always been that way.

Lauletta said the game of landing sponsorship deals has changed in one respect. Potential sponsors now take much closer looks at what their money is buying, and it now takes much longer for them to make decisions.

“What used to take four to six months to decide, now takes 18 to 24 months,” Lauletta said.

He said that had an effect on the Franchitti situation. He said he and his team should have had more irons in the fire for the sponsorship of the car.

“We were a little less aggressive than we should have been in developing that relationship (with potential sponsors),” Lauletta said.

One thing that has not changed when it comes to landing sponsorship is on-track performance. The economy has very little to do with that factor.

Geoff Smith, president of Roush Fenway Racing, which has five cars and sponsors for all of them, says winning solves a lot of economic headaches for teams.

“It’s always been about who had the money, and it takes performance to get money,” Smith said. “We know that and Rick Hendrick knows that because look at all the money it took to buy Dale Earnhardt Jr., to buy Tony Stewart, to buy Ryan Newman (both of whom will be with a team with strong ties to Hendrick Motorsports, Stewart Haas Racing, next year). Joe Gibbs is the same.”

Smith says a good example of that is the team with which Roush Fenway is associated — Yates Racing. That team started the season with two young, lesser-known drivers — David Gilliland and Travis Kvapil — but large gaps in sponsorship.

Both drivers have shown improvement during the season, but neither has won a race and, while some sponsorship has developed, gaps still exist.

“It’s the same situation that they have proven themselves competent to be competitive on the racetrack, and if we could have broken through and shown they have blue-sky Chase potential, that they would be sponsored already,” Smith said.

Lee White is president and general manager of Toyota Racing Development. Some of the cars in his stable have lost sponsors in the time since Camrys began racing last year in Sprint Cup.

The latest of those losses occurred earlier this year when UPS announced it would move from Toyota-affiliated Michael Waltrip Racing, to Roush Fenway next season. At Waltrip, the UPS sponsored car had not won a race with Dale Jarrett driving last year nor with David Reutimann driving this year.

White called the current situation of attracting and holding sponsors, “very, very tough.”

“It depends on the organization, and the organization has to win,” White said. “Geoff and Jack (Roush) are in a position where they are winning races, they’re certainly contending for a championship and have to be considered favorites today. On-track performance is the catalyst that brings sustainable sponsorship to the sport.”

There is, of course, a catch-22 in all of this — teams need money to be competitive, and they need to be competitive to get money.

And that has become exacerbated in times like these. In this tumultuous economic climate, sponsors are reluctant to take multimillion-dollar gambles on teams without proven track records.

Smith said that was a big part of the problem with the Yates drivers.

“In the old days, the market would have looked at a start-up (operation) like this (at Yates) and gone, ‘Wow.’ Because it is very much in line with how we started up our own teams first year to second year,” Smith said. “But the market now is expecting immediate gratification.”

When the Chase for the Sprint Cup Championship arrives this week at Kansas Speedway, the 12 drivers in the playoff will all be from one of four teams — Roush Fenway, Hendrick, Richard Childress Racing and Gibbs.

Those are four teams that are winning because they have sponsors and have sponsors because they are winning.

Breaking that cycle could prove next to impossible in the current environment.

“It makes it harder for the little guys. There’s no question about that,” Childress driver Jeff Burton said. “The harder it becomes for the little guys, the more endangered they will become. There’s no getting around that. The key for the little guys is to try to find a way to be the big guys, but it’s very difficult to do because there are only 43 spots.”

And therein lies another problem right now. Under the current system, only the top 35 cars are guaranteed starting spots in race fields. That means that companies sponsoring the smaller, less-competitive teams face the prospect of not being on the track and, hence, on television on the all-important race day.

It becomes tough for a small team to lure sponsors when it cannot guarantee media exposure.

Some have suggested that there is a way around that — franchising. That is, 43 teams would be franchised — just as there are currently 30 franchised teams in the NFL right now — and all, with their sponsors, would be on the track every weekend.

The franchising concept is rather controversial, though. So much so that Burton referred to it as the “F” word. But, he said, the concept could work to strengthen the series.

“I think an expansion of the top-35 rule to make it a top-42 rule or something like that is what I think we need to do,” Burton said. “I think that provides stability. Listen, when the economy is going well, it’s a whole lot easier. When you really start to see people getting hurt is when the economy starts to go bad.

“Sponsors are just not going to continue to show up spending the kind of money they are spending today in this economic environment not knowing if they can be in the race, and we’ve got to find a way to shore that up. Top-35 rule was an awesome rule, and NASCAR deserves a lot of credit. I just think it ought to be a bigger rule.”