Like the rest of us, NASCAR has been having all kinds of financial problems. Some large organizations, including well-known huge businesses and some which are not companies but rather are connected to the Pentagon, are leaving their multi-million dollars sponsorships of teams, races and racers as soon as the current deals run out. (Dale Earnhardt, Jr., in his National Guard-sponsored Chevy leads the Toyota of ex-open wheel star AJ Allmendinger in a Sprint Cup event).
Now we come to find out that NASCAR's most important sponsor, the title sponsor of the entire series, Sprint Nextel, is apparently not only open to acquiring some partners by selling parts of itself, but might even allow Sprint Nextel to be taken over by a South Korean company. More on that a bit later, but first some background:
Just last week, the US Navy announced they are dropping their multi-million sponsorship of the #88 Chevrolet in the Nationwide Series, driven by Brad Keselowski, after the contract runs out at the end of this season. JR Motorsports is a first-year team in the series, owned by Dale Earnhardt, Jr. Both Earnhardt and Keselowski have worked hard for their Navy money, the military service going so far as to create a "Dale Jr. Division" an 88-person boot camp division at Recruit Training Command.
General Motors announced cutbacks this morning amounting to more than $10 billion, and no motorsport will be immune from cutbacks. GM has already notified two racetracks that run NASCAR events that their current contracts will not be renewed as part of an overall $10 billion cost-cutting program. And no one likes to cut racing from their budget because ... apart from the potential marketing and promotional boosts, it's so much fun! The execs are not sitting in some Detroit office when they're at the track. (Dale Jr., and his mother, Brenda, after one of Junior's wins).
"Win on Sunday, Sell on Monday" was for decades the non-stop mantra of car-makers and their hotshot marketing departments. But the facts are that motor racing, especially in the US, doesn't have that kind of direct influence on the public anymore.
GM's cuts are just the first in what could be a huge drop in support by GM, Ford and Chrysler for tracks and teams in NASCAR, the NHRA and more in the face of the weakest US auto sales in a decade. Speedway Motorsports Inc., which owns eight tracks that hold NASCAR events, already has been told GM will not renew contracts at two tracks — New Hampshire Motor Speedway and Bristol Motor Speedway. Bruton Smith is CEO of Speedway Motorsports, and, like International Speedway Corporation, which was created by the France family, both are public corporations and answer to stockholders above all else. (With tobacco thankfully gone from almost all motorsport sponsorship and advertising in the US and worldwide, NASCAR decided to accept advertising from hard liquor distillers and distributors; a family sport?).
GM has contracts with 12 of the 22 tracks where NASCAR's top Sprint Cup series races and is the title 
sponsor for the fall race at Richmond International Raceway. GM and the other American car companies will to continue purchasing hospitality, suites and track displays, although perhaps not at the same level. Which probably means more potato chips and pretzels and fewer shrimp cocktails in the hospitality suites of NASCAR (GM prides themselves on always having the largest shrimp at their numerous cocktail receptions). All of the Detroit Three and other companies paying the way for racing in NASCAR and other American series will be forced to make cuts before long if the economic downturn continues. The way things are going with the economy and the value of the dollar versus the Euro, it might be cheaper for Formula One to run their entire series in the US for the foreseeable future.
The Navy says about the newly-formed division: “Everything JR Motorsports does is centered around 
excellence, teamwork and professional development, and that squarely places them in that number one seat – and that’s where the Navy sits in the defense of our nation." They also have a cool website with a talking Dale Jr., kind of like one of those audio-animatronic characters at Disneyland, and you can visit by clicking anywhere on this line ... And oh, when you visit there, remember: no flash photography, please. At least that's what they always say at Disneyland, just before "Mr. Lincoln" gets up from his chair and speaks ... (Brad Keselowski is driving his Nationwide Series Chevrolet, with big-time US Navy sponsorship, to a possible series title; they're dropping the sponsorship at the end of this season. The Army, Air Force, Marines, Coast Guard and US Border Patrol have all been major sponsors in NASCAR over the years. If the US public knew how much the Pentagon and Homeland Security were spending on NASCAR alone, do you think they'd be surprised, or shocked or want to see more of it in the sport?).
A couple of ironies here: Keselowski is a good bet to win the Nationwide Series this year, meaning that Navy is losing a pretty good chance of next season sponsoring the series champion. Also, while JR is losing the Navy, team owner Earnhardt, Jr., driver of the #88 Chevy in Sprint Cup, appears safe for next season with the National Guard ... yes, the National Guard ... as his primary sponsor. These are not coincidences, these are ironies. You should know the difference, especially at your age ... (And yes, that is a Dale Jr., Barbie).
Click below to find out more about NASCAR's financial problems and the possible impending sale of the Sprint Cup series title sponsor to a South Korean company.
And the money-losing isn't happening just at JR Motorsports, and not only in the second-tier Nationwide Series, but in the garages of the big-time Sprint Cup, too. Over at Chip Ganassi's Dodge Team, a lack of sponsor money resulted in his pulling the plug on the third car in his Sprint Cup trifecta lineup of drivers. (Nextel was the Cup Series sponsor from 2004 to 2007; the 2005 merger between Sprint and NEXTEL resulted in the Cup Series being renamed the Sprint Cup, beginning with this 2008 season; it was third series title change in just five years, since Winston dropped out as title sponsor ... it's hard to think of another sport series which could have withstood so many name changes in so short a time and still have a large and growing TV audience).
Ganassi asked for the keys for his #40 Dodge from Dario Franchitti, the Italian-born, raised-in-Scotland (explains his accent) driver. Ganassi's #41 car with Reed Sorenson and the #42 driven by Juan Pablo Montoya seem safe for the time being. This might work out well for Franchitti, though. This winner of both the 2007 Indy 500 and the Indy Racing League title that same year might spend the rest of the NASCAR season in another Ganassi car, this one in the Nationwide Series. The extra seat time is something any driver new to the sport can use, and a lot of the Nationwide races are filled with double-dipping Sprint drivers, so Franchitti will get to race against many of the same drivers he did in Cup pretty often. (Dario Franchitti won the Indy 500 in 2007 and the IRL series championship).
Also, when Franchitti comes home at night after a tough day of driving a car around a race track, he's 
greeted by wife Ashley Judd (you know, the thin one).
It's been easy to see as this NASCAR season has worn on (and on and on and on and ...) that there's trouble brewing for the sport's promotion, rules-making and sanctioning body. Fewer people in the grandstands and fewer motorhomes in the infield are things even a crafty TV director can't avoid showing for a few seconds during each race. Most big motorhomes have 100-gallon tanks for (usually) diesel fuel; here in Southern California, diesel is already over $5 a gallon. That's $500 bucks for maybe 400-or-so miles on a good day, downhill with a tailwind and dangerously drafting that 18-wheeler in front of you ...
NASCAR's TV ratings seem steady and I expect they'll slowly rise and during the last 10 races of the year, when the chase for the championship by the season's top 12 drivers happens, viewership could set some records for NASCAR and TV.
Why? Traditionally, entertainment of all sorts benefit from a recession or depression; movie theaters did their per capita best business ever during the Depression ... you know, that first one, in 1929. A NASCAR race on TV for free, with the series title at stake, is going to draw a lot of people who haven't been able to afford going to a race in person this year. (Mrs. Dario Franchitti, actress Ashley Judd, shares a laugh with Marco Andretti last year; just what is Marco staring at, anyway?)
Like we said at the top, seems not only has Sprint/Nextel been looking for a partner (or perhaps some outfit to buy them outright) but it might happen in the next few weeks. Get a load of the following, from the NY Times( with maybe a comment or two from us in parenthesis; in other words, a parenthetical phrase):
Sprint Nextel, the wireless carrier, is in early talks to form a partnership with SK Telecom of South Korea to share information about mobile phones and other technology, according to people briefed on the talks.
SK Telecom, a member of the SK Group chaebol (huge group of companies), is the #1 wireless communication services provider in South Korea. The company serves more than 20 million cellular users (50% market share), 19.6 million of which have data-capable phones.
The two companies have also discussed whether SK Telecom would consider a minority investment in 
Sprint, but nothing is imminent, these people said. The discussions, which were conducted informally in the last few weeks, are at an early stage and may not result in any deal. Sprint’s stock climbed 9 percent, to $9.04 Tuesday, after CNBC reported that SK Telecom was in talks to acquire Sprint.
A Sprint spokeswoman declined to comment. But it is not the first time that Sprint has talked with SK Telecom about a partnership. Last year, Sprint turned down a $5 billion offer from SK Telecom and Providence Equity Partners, which were interested in buying a minority stake (Ed. note - You have to wonder if NASCAR was aware that Sprint Nextel was having these talks last year, and if they did, how it might that have effected the terms of the sponsorship agreement).
Sprint, which has struggled with customer defections, recently named a new chief executive, Daniel R. Hesse, who is trying to turn around the company. But there has been speculation about its future. Earlier this year, Deutsche Telekom of Germany mulled whether to make a bid for the company, people apprised of the situation said then. Sprint too explored whether to spin off its Nextel unit.
Under Mr. Hesse’s leadership, Sprint is trying to appease its 52.8 million customers.
As chief, Mr. Hesse has encouraged more partnerships. This spring Sprint entered into a new high-speed wireless venture with Clearwire and a consortium of disparate partners, including Google, Intel, Comcast and Time Warner. The company hoped the deal would give it a two-year edge over AT&T and Verizon in high-speed service, both at home and on mobile phones. (End of NY Times story)
As money gets tighter, and many economists say this recession might drag on for longer than anyone could anticipate (and none of them anticipated this one), it will be interesting to watch how NASCAR and other sports handle the defection of both fans and sponsors.
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