Nascar In High Speed Collision With The Economy

Nascar’s Sprint Cup Series kicks off in just a few weeks with an exhibition event February 7th at the Budweiser Shootout taking place at Daytona International Speedway in Daytona Beach Florida. Then the 36-race series really kicks into gear the following weekend with the biggest Nascar event of the year, the Daytona 500 on February 15th.

For the past decade Nascar has grown in leaps and bounds, from an organization that was primarily funded by ticket sales and merchandise to one driven by lucrative sponsorships and advertising. As the economy falters those sponsors are cutting back or pulling out entirely. The NY Times reports that in the 2008 racing season 400 companies put up more than $1.5 billion dollars in sponsorship funds. About one third of that was provided by big automakers. Much of it has been slashed for 2009.

One result is that teams across the country are merging to save money resulting in wide spread job losses. The American Winston-Salem Journal Newspaper reported recently that 700 jobs had been cut by Nascar teams and suppliers.

Famous race car driver Dale Earnhardt Jr., who is also the owner of JR Motorsports, says they will be running one full-time Nationwide car this year instead of the two they had last season. “Everybody's been making job cuts and stuff here and there, trying to do whatever they can to maintain their organizations and keep their teams together.”

Race tracks around the country are slashing ticket prices, offering fan incentives and trying to find other creative ways to maintain attendance. At the Daytona 500 grand stand tickets have been reduced from $99 to $55. That’s the lowest Daytona 500 ticket price since 1995. At the Auto Club Speedway in Fontana CA front row grandstand seats have been cut from $55 to $35. Texas Motor Speedway will have tickets for as low as $20 for its Sprint Cup races this year.

Traditionally test sessions are scheduled at tracks around the country to allow teams to tune their cars performance in preparation for races there. Now Nascar has banned these tests for the entire season to save money. Drivers like three-time Cup Series champion Jimmie Johnson don’t like the ban. His consistent success on the track is built on good “data acquisition”. Team owners on the other hand might be happy to be saving an estimated $60-70,000 for each testing session totaling millions of dollars over a season.

So far there has been no reduction in this year’s 36-race schedule, but potential cuts are definitely on the table. As 2009 unfolds more changes will certainly be in store.