NASCAR Sponsorship Struggles: Just Got Real

Friday: September 14, 2018

By Shane Beck
Las Vegas, NV

  With the 2017 NASCAR Monster Energy Cup Series driver, Martin Truex Jr, being the latest to fall victim to the loss of sponsorship dollars.  The question that many are asking is why?  For that matter a better questions may be how, how does your last years champion ship team fail to secure sponsorship dollars for the future 2019 racing season?

  NASCAR teams historic ally have depended upon sponsorship dollars to stay a float, to build a racing program and maintain it' relevance.  With seven time NASCAR Cup Series driver Jimmy Johnson losing Lowes Home Improvement in 2019, and now the #78 team owner of Furniture Row Racing, Barney Visser announcing their closing their doors at the end of 2018 due to lack of sponsorship dollars, the state of NASCAR is on rocky ground.  It's not easy for a single car owner like Barney Visser to survive for vary long.  Red Bull Racing which owned and operated it's own team was short lived, they lasted only six years.

  The cost of a top team in the NASCAR Cup Series can cost $30 Million to operate annually, sponsors pay for the majority of those expenses.  In the early years, the 1990s, sponsors like GM Goodwrench stuck by their driver through thick and thin.  Drivers would develop an identity as, in this case Dale Earnhardt as Mr. Goodwrench.  Driver Mark Martin was known as Mr. Valvoline, while Rusty Wallace was always the driver of the Miller car, Terry Labonte was the Kelloggs car and others we're well know with the identity of their sponsor.  Not only the sponsor but the colors were always consistent.  

  Many companies are not shelling out those same dollars and receiving the same benefit for those dollars, teams have been forced to split up the number of events that a sponsor would get the hood of the car and color scheme to cover the cost of operations.  Another words, if you have three ten million dollar sponsors who split the racing season in thirds, then you achieve the total operating expense of $30 million to cover your operations.  However, if one of those sponsors doesn't renew and you still need $30 Million to operate, you either cover out of pocket or find another sponsor.  This is where the problem lies, the value of what the teams are putting out isn't worth the benefit to the sponsors and they're reluctant to renew.  Farmer's Insurance sponsored Hendrick Motorsports $67.28 million dollar deal, the deal was for 102 total races, far short of the season total.  Kyle Busch might be the only driver left that runs one sponsor for the duration of the season.  The Bang for Buck theory!  Not getting enough Bang for their Buck.  It's become way to expensive, even for fortune 500 companies. 

  So what can be done, how will these teams not only survive but start to thrive?  I believe the bottom line is NASCAR needs to take a step or two back, they need to dumb it down.  NASCAR needs to make it cheaper for the teams to operate and need to do it fast.  This sport has become a victim of the times and has out priced themselves.