Posted by: David Welch on October 24, 2008
Detroit’s dark days cast a long shadow. And NASCAR is starting to shiver in that shade. An Oct. 23 story in the Washington Post revealed that the Big Three are pulling back on sponsorships at NASCAR races. General Motors said that would happen back in July when the company announced sweeping cost cuts.
That means NASCAR will have a make-or-break year coming up. The typical NASCAR team gets 80% of its funding from corporate sponsors, the Post said. A lot of those sponsorships deals are three-year contracts that were forged two to three years ago when NASCAR’s popularity was soaring, says Peter DeLorenzo, publisher of Autoextremist.com. That means that next year and in 2010, when companies are either struggling through a recession or limping out of one, NASCAR and its teams will be trying to get companies to re-up their sponsorship. Marketing budgets will still be thin.
There’s one more challenge to America’s favorite motor sport. As the Big Three pull back on NASCAR (assuming the U.S. carmakers emerge from the credit and economic mess) they will have lived a few years with a smaller presence at stock car races. They may finally realize that they didn’t sell as much on Monday after winning on Sunday as they thought. So the carmakers could redeploy marketing cash elsewhere just as they have shifted away from traditional media. Or, as DeLorenzo says, “NASCAR hit its peak a couple of year ago.” If the sport can’t find other sponsors or revenue sources, it could keep slipping from that peak. And I was just gettin’ a hankerin’ to watch cars go ‘round in circles.