Lifestyle

GM: NASCAR's Latest Problem


GM's bankruptcy is only the latest problem plaguing NASCAR, whose major sponsors and target audience have been badly hurt by the dire economy

1. NASCAR: Revving in Support of Chevy, and the Rest of GM

Less than a week after NASCAR called a mandatory state-of-the-circuit meeting for all Sprint cup drivers and team owners to discuss the dire economy, General Motors filed for the largest industrial bankruptcy in U.S. history. While the U.S. government will pump an estimated $50 billion into the failed company, ensuring at least its short-term survival, there was no word earlier this week as to what the bankruptcy might mean for GM's motorsports sponsorship programs, putting their estimated $125 million annual NASCAR investment into question.

NASCAR has likely been hurt more than any other sport as a result of the current economic climate. Attendance is down because of the high cost of traveling to races, while TV ratings are off due to a perceived lack of exciting ones. Every telecast on FOX has seen a drop in ratings from the respective 2008 broadcast, with total ratings on the network down 13% from last year. And only an estimated 100,000 people attended the NASCAR Sprint Cup Autism Speaks 400 at Dover International Speedway, well off the approximate 140,000 in years past.

Among possible solutions discussed by NASCAR execs—including Brian France and Lesa France Kennedy, grandchildren of founder Bill France Sr.—at the recent summit were how to bring back fans who may have left the sport, NASCAR's image, and the circuit's new car. Broadcast partners are solid, with TNT and ESPN splitting broadcasting rights through the remainder of the regular season, and ABC airing the Chase for the Sprint Cup when it starts in September. What's more, Danica Patrick's IRL contract runs out at the end of this season, and NASCAR undoubtedly will make a push for her to switch over.

In Dover, GM was able to at least celebrate some success on the track. Chevrolet driver Jimmie Johnson won the race, with Tony Stewart, another Chevy driver, taking second. In all, 21 NASCAR racers drive Chevrolets, including Dale Earnhardt Jr., Jeff Gordon, Johnson, and Stewart; Chevrolet has won the last six Manufacturers' Championships, and 10 of the last 14.

NASCAR team owner Rick Hendrick plans on staying the course with Chevrolet, which cut NASCAR spending by 30% at the start of the season but has changed little since the announcement. "I have a lot of faith in GM, especially Chevrolet," he was quoted as saying. "I've been with them for a long, long time. Our business is good, the products are good…we're going to be O.K."

2. Cowboys Stadium Opens for Business

It figures. There was absolutely no way high-flying Dallas Cowboys owner Jerry Jones was going to be content with a standard ribbon-cutting ceremony when he officially opened the doors to his $1.15 billion stadium in Arlington, Tex., last week. Instead, according to the Fort Worth Star-Telegram, Jones "placed large white panels with the stadium logo on its west end-zone glass doors to look like a ribbon. Along with his family and Arlington Mayor Robert Cluck, Jones pulled a lever to open the glass doors, "symbolically cutting the ribbon," after which nearly 1,500 Cowboys employees, their invited guests, and local leaders filed into what is now the biggest and grandest sports playground in the U.S.

However, the stadium's more than 2,000 workers still have much work to do before the June 6 George Strait/Reba McEntire concert, the July 19 CONCACAF Gold Cup soccer quarterfinal doubleheader—the stadium's first sporting event—and before the Cowboys' home preseason opener Aug. 21. Some parking lots are still to be paved; locker rooms, suites, and back-of-house areas continue to be finished out; road work also continues on surrounding surface streets and the nearby highway; and 20-odd luxury suites out of an inventory of 280 remain to be sold. But there's no doubt at all in the collective minds of the stadium's brainchildren—from Jones to chief architect Bryan Trubey of Dallas-based HKS Inc., Cisco (CSCO) technologists, executives of general contractor Manhattan Construction, and structural engineer Walter P. Moore—that in Texas-speak, they'll "get 'er done."

Such state-of-the-art facilities as the new Cowboys Stadium are of paramount importance to a team's bottom line and ability to attract major events and sponsors, draw spectators on a continuous basis, and garner international media attention regardless of on-the-field record. (Cowboys Stadium will break all previous barriers in this regard.) Such facilities, as we've often stated in the past, are also critical to the surrounding community's ability to attract major revenue-generating events, create jobs, build community pride, and forge an international identity.

After NFL preseason games are complete, Cowboys Stadium will host its first collegiate football event, when Oklahoma takes on BYU in a nationally televised season kickoff game. The NBA All-Star Game is scheduled for Feb. 14, 2010, the first mega-sporting event to be held in the venue. The stadium and the Cowboys will host Super Bowl XLV a year later.

For now, however, it's George, Reba, and a busy summer under big, blue Texas skies.

3. It's Got Legs: Stanley Cup Finals Take Center Ice

One hundred sixty to be precise. Legs, that is—at least at Superior Fish in Royal Oak, Mich., where the number of octopi sold before the May 27 Detroit Red Wings playoff game hit 20.

With the Wings besting the Chicago Blackhawks and the Pittsburgh Penguins sweeping the Carolina Hurricanes, the NHL—unlike the NBA—has landed the Finals of its dreams. Will this year's rematch of last year's Stanley Cup Finals turn out the same? No matter—the league, NBC, and cable network Versus stand to benefit greatly from another clash of the league's two best teams amid what some are calling the renaissance of hockey.

Besides cephalopods, NHL jerseys are selling well in Michigan, with Nicklas Lidstrom's No. 5 and Henrik Zetterberg's No. 40 among the top sellers in and around Detroit's Joe Louis Arena. (That's certainly a better merchandising scenario than in Dallas, where thieves stole "nearly $7,000 worth of [Texas] Rangers [baseball] jerseys, plus jackets, hats, and hooded sweatshirts" from a team store early on the morning of May 31, according to The Dallas Morning News.)

Ratings are pretty good as well. Game 1 of the Finals earned a 2.6/5 overnight Nielsen rating on NBC on May 30, compared to a 1.2 rating (2.4 million viewers) when Versus aired Game 1 last year. Versus has seen significant ratings increases for their entire playoff coverage. Total viewer numbers on Versus were up by at least 35% in the earlier playoff rounds.

Comerica Bank, finally, may very well be the bank of the spring sports playoff season. Besides sponsoring the Red Wings, the bank is also the official bank of the NBA Finals-destined Los Angeles Lakers.

4. Finally, NBA Finals Arrive

If the NBA and NHL were to run a marathon, who would win? This year it's fans of both sports who have been rewarded for their patience, in the form of two terrific championship matchups.

While the NBA didn't get the Kobe Bryant-LeBron James matchup of its dreams, the league is certainly not without rim-high ratings. TNT's broadcast of the Cleveland-Orlando Eastern Conference Finals Game 6 on Saturday, May 30, drew 8.3 million viewers, up 29% from the 6.4 million viewers for Celtics-Pistons Game 6 last year (which aired on ESPN on a Friday). For the whole Eastern Conference Finals, TNT averaged 8.6 million viewers, up 36% from the 6.3 million viewers for the Lakers-Spurs Western Finals in 2008. Magic-Cavaliers also finished as TNT's most viewed Conference Finals ever, beating out the 7.8 million viewers for Lakers-Timberwolves in 2004.

Like the NHL, sales of NBA Playoffs merchandise are up, 32% higher than last season as reported by the NBA Store in New York and on NBA.com. Interestingly, the league also reports that sales of the James' MVP T-shirt are up 70% from Bryant's MVP shirt last year. The NBA also currently has the two most popular free sports applications for the iPhone and iPod Touch in Apple's (AAPL) iTunes App Store, with more than 500,000 total downloads so far of NBA Game Time and its companion video application, NBA Playoff Highlights.

5. Supreme Court Nominee Sonia Sotomayor and Sports Labor Law

Sonia Sotomayor, President Barack Obama's first Supreme Court nominee, grew up in a public housing complex in the Bronx in the long shadow of Yankee Stadium and grew up rooting for the Yankees. "I hope this will not disqualify her in the eyes of the New Englanders in the Senate," President Obama joked on May 26, as the sports industry eyed a woman who could wield a profound influence over sports labor law for decades to come.

While she cast the decision that kept Maurice Clarett from joining the NFL straight out of high school, Sotomayor's most famous labor ruling benefited baseball's labor union. As a New York district judge in March 1995, she was assigned a case that pitted the National Labor Relations Board against Major League Baseball owners. The owners, fighting a players' strike, had unilaterally changed baseball's rules on free agency and salary arbitration.

When the MLB Players Association resisted, the owners locked out the players and hired replacements to continue spring training, mostly minor leaguers with only the slimmest chance of reaching the majors any other way. The MLBPA complained to the Labor Board, which sued to prevent the owners from making such changes outside of the collective bargaining agreement negotiating process.

Two days before baseball's 1995 season opener, Sotomayor issued a temporary injunction and ruled in favor of the Labor Board, ruling that the owners had engaged in unfair labor practices and putting the expired CBA back into place. This essentially ended the baseball strike—the 1995 season started late, but it was played with regular major league rosters.

Since that ruling, no owners in any of sports' major leagues have unilaterally attempted to change basic labor agreements during work stoppages. The NFL, facing possible labor disputes when its current CBA expires at the end of the 2010 season, should watch carefully and pay particular attention should Sotomayor pass through the nominating process and ascend to the high court.

6. Lifelock Liplock for WNBA?

It finally happened. At last, a U.S. pro sports team put a corporate sponsor on its jerseys (MLS doesn't count—they're channeling their more successful European brethren).

Just months after losing a major corporate sponsor (Discover (DFS)), seeing a storied franchise fold (Houston Comets), and reducing team rosters from 13 to 11 players, the WNBA launched a new policy that allowed teams to solicit jersey advertisements. The first team to take advantage of this is the Phoenix Mercury, which negotiated a three-year deal, worth at least $1 million annually, with LifeLock. As part of the agreement, LifeLock will appear on all things Mercury, including the US Airways Arena court, the team's Web site, and in e-mail campaigns and social networking initiatives. Additionally, LifeLock will give all WNBA season ticket holders a free, one-year membership.

I'm glad that a franchise finally was willing to break the taboo of putting endorsements on jerseys. For teams in need of operating revenue, uniforms are the premier real estate in sports sponsorships. Consider that every time highlights are shown on TV, Company X's logo will be front and center. If the Mercury can earn $1 million a year, imagine how much the Phoenix Coyotes could command.

Regardless, the move is not likely to start a trend. American pro sports are so steeped in tradition that the thought of a major pro league selling out to corporate sponsors seems blasphemous. However, even David Stern acknowledges that the WNBA is his laboratory, and with the Bobcats, Pacers, Nets, and Kings all facing financial difficulties, don't discount the long-term possibility of jersey ads finding their way into the NBA. In the meantime, LifeLock's national profile skyrockets from this story, but don't blindly buy in to the product…even LifeLock CEO Todd Davis has had his identity stolen!

7. Not to Be (Completely) Outdone by Cowboys, 49ers Announce New Stadium Deal

According to a team announcement on June 1, the San Francisco 49ers have reached an accord with the city of Santa Clara, Calif., to build a new $937 million NFL stadium there. Before the project can move forward, however, the agreement must be approved by the Santa Clara City Council and Santa Clara residents.

According to team disclosures, the facility would be publicly owned by a stadium authority, while the city would retain land ownership. The financial parameters limit the city's investment to $79 million, with no new taxes or other costs to Santa Clara residents. Another estimated $35 million would come from a surcharge to overnight guests at hotels near the stadium site, while the remainder of the cost will be covered by the team, the league, and related stadium authority revenues, including sponsorship and naming rights.

The term sheet was discussed June 2 at a special session of the Santa Clara City Council. Whether the 49ers will purchase the adjacent Great America theme park from Cedar Fair (FUN) is "still under consideration, but not an issue the city is tackling," according to the local business journal. The stadium is projected to open in 2014, two years later than initially thought.

"Why do we like this deal?" asked 49ers Chief Financial Officer Larry MacNeil in the San Jose Mercury News. "Largely because it's one of the best sites in the Bay Area for a stadium. … The existence of traffic infrastructure, and public transportation at this site, is really key for an NFL stadium." Santa Clara city consultant Keyser Marston Associates also indicated in the paper that the stadium "would create 515 permanent full-time equivalent jobs and $41 million a year in economic activity," and that "doesn't include 1,350 construction jobs the 49ers say would be created while the 68,500-seat venue is built."

8. Athletes Who Became Executives in Other Sports

Jerry West has ditched his NBA roots to become the new executive director of the PGA Tour's Northern Trust Open. Although it does happen, it is not every day that you see an iconic sports figure become an executive in a different sport. Here are five of the most prominent occurrences.

5. Larry Scott. The newly appointed Commissioner of the Pac-10 Conference, Scott was once a professional tennis player, finishing his career with a 1-18 singles record and 20-39 doubles record. Since the Pac-10 is known more for USC football than tennis, it is safe to assume that Scott was hired for his business acumen, and not his poor pro credentials.

4. Troy Aikman. There is no better way to get into the front office of a pro team than by purchasing it. In Aikman's case, when he couldn't decide between MLB and NASCAR, he bought into both. In 2003, Aikman founded Hall of Fame Racing with fellow Dallas Cowboys quarterback Roger Staubach, and in 2009, he bought part of the San Diego Padres with Jeff Moorad.

3. Steve Nash. Growing up in Vancouver, Nash had a well-documented affinity for soccer. It comes as no surprise then that when his hometown was looking to bring in an MLS franchise, Nash signed on to be a part of the ownership group. The Vancouver MLS team will begin play in 2011.

2. Jerry West. As a former player, head coach, and general manager of the Lakers, some of "The Logo's" best days were in L.A. Now, the man who traded for Kobe Bryant is heading back to the City of Angels to become the executive director of the PGA Tour's Northern Trust Open. Among his job responsibilities, West will educate the community about the event and "engage the community through public appearances."

1. Joe Gibbs. A Hall of Fame football coach, Gibbs led the Washington Redskins to Super Bowl titles in 1982, 1987, and 1991. A year before he first retired from the NFL, he created his own NASCAR team. Finding equal success on the race track as he did on the gridiron, Joe Gibbs Racing has won three Sprint Cup championships since 2000.

9. UEFA Champions League Final Sponsors

If you watched FC Barcelona defeat Manchester United in the UEFA Champions League Final on May 27, you undoubtedly saw the names of six companies emblazoned next to the pitch. An official sponsorship of Europe's biggest sporting event costs $35 million to $47 million annually. Here is how long each of those companies has been a Champions League Final sponsor:

Ford: since 1992

Heineken: since 1994*

MasterCard: since 1994

PlayStation: since 1997

Vodafone: since 2007

Sony: since 2007

*Heineken subsidiary Amstel Light was an official sponsor of the Final through 2006, when Heineken announced that it would assume the branding.

10. The Other Cheeseheads

In the annals of extreme sport, the Gloucestershire "Cheese Rolling and Wake" has got to be the big cheese.

Held in the southwest England hometown of JK Rowling, Harry Potter demigoddess, the annual event attracts thousands and has taken place at the end of May for "possibly hundreds of years" and "may have been started by the Phoenicians, the Ancient Britons, or the Romans," according to the official Web site. It evolved from early fertility rites, hopes for a bountiful harvest, or more likely, ancient iterations of that wacky British sense of humor à la Monty Python and the Goodies.

The cheesy competition comprises five heats (one for ladies!) down a very steep and stubbly hill. At the official command of the Master of Ceremonies, a guest "roller" pushes a 7-to-8 lb. wheel of Double Gloucester down the precipice and 2 to 20 spirited competitors per heat, many clad in no more than a loi


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