Alex Meshkin

The Associated Press (AP) has reported Brian France, CEO of NASCAR, has directed his management to work with teams in developing new business models that can help them withstand the current economic crisis. As we are all aware, NASCAR teams rely on corporate sponsorship to fund the majority of their operating budgets, which is substantially different than any other major sport. Whereas, NFL, NBA, NHL and MLB teams participate in higher levels of revenue sharing as a result of a franchise business model.

“We’re trying to do more with less. That’s the difficult part of this economy,” France said following his state-of-the-sport address to media at NASCAR’s Research and Development Center. Just back in December, NASCAR issued a statement stating that NASCAR heading into 2009 was “strong”.

This outlook is a rather quick reversal, but perhaps the gravity of the current economic climate and mass sponsor deflections is making an impact.

Doing more with less? Working with teams to develop new business models? I apologize, but in my humble opinion, it’s a little too late for a half-baked plan. But even worse and what is frustrating is NASCAR’s continued unwillingness to restructure the distribution of television revenues to rightly supplement teams’ operating budgets.

What NASCAR needs is a business model which more closely replicates Formula 1 or a franchise structure like every other major sport. As a fervent advocate for team rights, I have repeatedly voiced the need to develop a franchise model that would enable teams to weather macroeconomic difficulties; and subsequently, become less cyclical and more stable during recessions and economic turmoil. The time for leadership, sacrifice and decisive action on behalf of the France Family is NOW. But to the contrary, the Brian France plan is nothing more than reinforcing their past strategies of working with teams to help locate and secure sponsors. While his intentions may be honorable; they are nevertheless naïve when considering there is a global economic recession; and specifically, when the NASCAR industry is in a depression of historic proportions. At this moment, I don’t believe there is a single corporation that is considering spending $15-$30 million required to fund a primary sponsorship program for a NASCAR Sprint Cup team. So I am rather befuddled with Brian France’s simplistic strategy to save the sport, which unfortunately in its current form will contribute to the sport’s certain collapse.

Is it possible that the past success of NASCAR is blinding Brian France from seeing the light? Reflecting back to 60 years ago to the earlier days of NASCAR, Bill France Sr. (Brian France’s grandfather) executed a flawless business plan to convince the then stock car racers and event promoters to become part of his newly formed organization and sanctioning body (NASCAR), whereby he gained complete control over stock car racing. The foundation of NASCAR’s “business model” problems ironically stem from the grand success of Bill Sr. and his unilateral control of a racing empire, including control over the majority of racing venues (International Speedway Corp) and the stock car sanctioning body. Over the past half-century, teams competing in NASCAR relied almost exclusively on corporate sponsors to fund their operations – enabling the France Family to retain a majority of the sports revenues and amass a large network of racing venues, and establishing NASCAR Holdings, an incredibly profitable wholly owned private company.

Those times have dramatically changed and for too long, NASCAR teams have tolerated the exploitation and willingly bore the total burden to exclusively fund their operations through advertising and sponsorship. The rapid increases in costs of racing and teams’ operating expenses of the past 5 years, combined with the minimal increase in sponsorship value – have brought the teams’ very existence into question.

One must wonder, how long can the France Family continue their racing monopoly? Historically, race teams have avoided conflict with the France Family; and the only entities to challenge the France Family’s monopoly have been race track owners, such as Burton Smith and Speedway Motorsports. Even through the France Family has weathered many possible anti-trust challenges with settling most disputes outside the judicial system; I believe the current financial crisis and advertising recession is about to test the resolve of the France Family and their prehistoric business model.

In a stark contrast to the past decade, NASCAR is falsely promoting an image of growth and strength by stating that 15 new organizations have applied for licensing to compete in the Sprint Cup Series. What they fail to mention and what many novices are unaware – almost all of those “new” teams are merely opportunistic racers attempting to profit by a method called: “start and park”, which allows them to collect sizable race winnings (in comparison to their expenses) with a team and car specifically built to just run one or two laps, enabling them to collect profits – all without adding ANY value to the sport. What a sad day it is for the diehard NASCAR fan.

As many of you know, I was the founder of Bang Racing which was NASCAR’s most successful first year team in history. At the young age of 23, I built and operated this highly successful team and we made history finishing 2nd in our first race (Daytona) and winning our 13th race (Michigan International Speedway), which was the first win for Toyota in NASCAR history. While all this is now historical facts found in the archives of NASCAR history, what is typically not understood is that even as a very competitive team, our business model was fundamentally flawed because generating a profit was nearly impossible. Simply put; the cost of running a NASCAR team far exceeds its sponsorship/advertising revenue potential and without significant “business model” changes by the France Family, teams are doomed for failure.

NASCAR must be the only sport where the most profitable teams are the biggest losers’ and where finishing dead-last or not even attempting to win makes more money than being a top competitor. Something is dreadfully wrong when the most competitive teams with great on track performance cannot survive because the costs of running their teams far exceed their revenue potential. The problem is clear: without teams receiving a larger share of the sports’ multi-billion dollar television contracts – there will be no strategy that can make viable a long-term solution for the sport – that is the simple reality.

However, being the “optimist”, I hope Brian France and will realize quickly that his family has the unilateral ability to deliver the change in business model the teams and sport require to survive.

Sources are telling me that instead of focusing on reinventing themselves, NASCAR is anticipating a future without automotive sponsors. Is this an omission from NASCAR that they lack a value proposition? Regardless of the poor economy or slump in automotive sales – if NASCAR sponsorship has a positive ROI, automakers would not be consider jumping ship. The reality is simply the ROI for the automakers are far below most other mediums and NASCAR may finally be getting the message. But unfortunately, it may be too late for NASCAR to adjust and to keep the financial support of the Big 3 and Toyota, but surely it’s worth a more concerted effort to evolve their business model and objectives to try and retain the majority of their automotive partners.
NASCAR today must be more than just a marketing platform. It needs to become a technical platform and support R&D objectives for the automakers. Evaluating NASCAR in the most cynical viewpoint, one could argue that the archaic technology, i.e. the use of carburetors, instead of fuel injection, is continuing the public persona that the Big 3’s product portfolio is less than innovative. It’s time for NASCAR’s leadership to make the necessary changes in the best interests of their lifeblood – their teams and automakers.

I want to enforce my statements in my post on July 21st:

NASCAR has a real opportunity for leadership – and can provide automotive manufacturers a real marketing platform that demonstrates alternative energy as performance cars – that are viable, affordable and energy efficient – and return NASCAR to its roots as “stock car” racing at its best.

NASCAR is standing at the crossroads, where the wrong decision could be the final nail in the coffin. Their choice may be a future of IROC style racing or one of a balance of innovative technology with the proper cost controls in place to secure the long term stability of all stakeholders. Unfortunately, if NASCAR becomes the next IROC, I am afraid their future will most likely be rather bleak.

RE: NASCAR Says: Sport looks strong heading into 2009

Quoting the former Presidential Candidate and Senator Hillary Clinton, NASCAR statements on Friday truly requires a “willing suspension of disbelief” if they want us to think the “sport looks strong heading into 2009.”

Nothing could be further from the truth and it pains me to see the sport I love destroyed by in-action and failure to comprehend the gravity of the economic times. The Big 3 automakers are on the cusp of bankruptcy, unless President Bush provides an immediate multi-billion dollar bridge loan from the Troubled Assets Relief Program (TARP). Without the Big 3 – the NASCAR economy will rapidly contract and a large percentage of teams will be added to list of defunct organizations. And with that – NASCAR thinks the sport is “strong” – but in reality – teams are dissolving faster than Kyle Busch racked up victories in the beginning of 2009; and without competitive teams – NASCAR is heading for a death spiral.

Without sweeping changes to the fundamental way NASCAR operates – the long term future is bleak. In comparison to Formula 1, following the announcement of Honda to close their F1 Racing operations, the FIA, the sanctioning body of Formula 1 racing, immediately acted with the support of their constructors (teams) to implement meaningful cost cutting measures for the 2009 and 2010 seasons. Formula 1 Cost Reduction Plan

This type of leadership and decisive action may curb future team closures and ensure the viability of the sport. Contrasting the bold leadership of FIA and F1 to NASCAR’s failure to address their challenges is cause for great concern. NASCAR’s value proposition for automakers and corporate sponsors is decreasing rapidly and they must act not only to increase their value proposition; but act to immediately cut costs and increase teams’ participation in the television revenues.

Without describing my complete cost reduction plans, the key areas that MUST immediately be changed by NASCAR are the following:

• Length of the race weekends – two day shows instead of three days at the track
• Reduction of race team members allowed at the track
• Elimination of credentials and “hard card” for necessary race team personnel
• Limitation of number of sets of tires available for use per race weekend
• Elimination of track testing at non-sanctioned race tracks
• Limitations of wind tunnel testing for aerodynamic development

As always, I offer my opinion to strengthen the sport and help ensure its long term viability.

Over the past several weeks, I have been inundated with inquiries about a variety of topics that I have discussed about the state of NASCAR and the sponsorship crisis. I feel compelled to address and clarify some of my previous statements and respond to a recurring theme of certain readers’ comments.
Many of the NASCAR faithful have repeatedly stated: “the sky is not falling NASCAR has a larger television audience today than in 2001”. While this may true – it has little to do with the enormous problems facing NASCAR today. The problem is one of economics that simply don’t add up.
As a former team owner, I can speak to the fact that there is an alarming disconnect between the highly profitable NASCAR Corporate; and the costs of operating a team and the corresponding costs to sponsor a team. It is NASCAR’s “disconnect” and perhaps even ignorance to the fact that NASCAR teams are facing a sponsorship depression that is the fundamental problem – and it is this blindness that will ultimately cripple NASCAR if they continue down this same pathway.
On Sunday, Brian France, Chief Executive Officer of NASCAR was asked; Are you certain you’ll have 43 car fields next year?

We’re pretty confident about that. I said before to many of you, you know, we’re also criticized for having too many cars.

I don’t know if he is taking lessons from the former Iraq Information Minister – Baghdad Bob.

But unless he is counting on Dave Marcus and Morgan Sheppard – having 43 competitive cars is extremely unlikely.
Just like the global financial crisis, the problems were not created overnight and may require the governing body to stimulate the NASCAR economy. But NASCAR needs far more sweeping changes than just the teams receiving a larger share of the television revenues. A variety of topics that must be addressed include; dramatic cost savings for the teams, incentives which drive fan interest – larger focus on winning -- less on consistency, and greater shares in revenues so teams can sell sponsorship packages for considerably less -- increasing the value proposition for corporate sponsors.
The basic message which seems to be lost in the entire dialogue over the sponsorship crisis – is not that companies haven’t wanted to become involved in NASCAR marketing – it is just cost prohibitive; too much risk and the ROI is difficult to measure. If we withdraw ourselves from the current economic crisis and rewind the clock to 2007; and if teams could have marketed Sprint Cup primary sponsorships for $10 million – do you think we would have the dramatic sponsor shortage of today? I don’t think so – the problem is primarily the price not the product.
Now I want to be clear – the product needs innovation and a fresh approach to bring die-hards back into the fold and make the sport more interesting to all sports’ enthusiasts. However, Brian France has only focused on the latter; and subsequently, by attempting to reach out to non-core fans he not only failed to grow the fan base, but he alienated many loyalists which has diluted the value proposition for many NASCAR sponsors.

On Sunday Morning, Bruton Smith conducted an interview with ESPN. After questioned about the challenging times that is facing NASCAR; Smith reaffirmed his desire to acquire NASCAR and said, “And it’s getting closer”, referring to the possibility of the France Family looking to sell NASCAR. Is Smith just stirring the pot? Or perhaps, is the France Family finally considering ending their strangle-hold on the sport?
Hypothetically, let us assume Smith’s statements are backed by an element of fact and that the France Family is looking to sell NASCAR. It is my opinion that a change in ownership from the France Family to Smith would not bring about the change needed to put NASCAR back on the track for growth. As discussed in my most recent blog entry, The Failing NASCAR Economy: A Time for Action! - NASCAR must act to bring forth changes to support its lifeblood – the race teams. A Smith regime would only continue the same old policies of providing the race tracks a disproportionate share of the television revenues as compared to the racing teams. These policies need to change – NASCAR Sprint Cup Teams must receive a greater portion of the television revenues earned by the sport – because without Teams there is no NASCAR. Yes, tracks are valuable, but as Formula 1 has proven, track owners and promoters are willing to host events without large subsidies from the governing body.
The best avenue to save our sport and put it back on track, allowing it to grow into the next decade, is for an entrepreneurial executive; who understands the sport, new media and the market trends to lead a leveraged buyout – partially funded by a team franchise model – where 43 Sprint Cup Teams would receive a minority ownership and participate in profit sharing to ensure the stability of the premiere NASCAR series – the Sprint Cup.
The impending fluctuations expected in the number of competitors in the second most watched sport in country – the Sprint Cup Series, is completely unacceptable. A new ownership structure must include policies and an agreement to secure the future of the Sprint Cup Series by enabling Team Owners to purchase Franchises and receive votes in the future of the sport that they have all built. This new structure would eliminate the sanctioning body from competing with teams for sponsors and create a more healthy sport to ensure its long term future.
2008 has been the year of “change” – Americans want “change”, NASCAR Fans want “change”, NASCAR Teams want “change”. If the France Family provides the opportunity for “change” in the leadership of NASCAR – let us all hope that it is the “right change” that comes to Daytona Beach.

Most will agree that the current economic recession will have a significant financial impact on NASCAR teams and the sport as a whole – but does it really need to be this way? In 2009, there will be significantly less Sprint Cup teams competing on a weekly basis – and yet, in economic downturns other sports such as the NFL or NBA do not have reductions in teams. Why is this so?  The answer is rather simple – other sports operate as a democracy with all teams participating in the economic benefits of the television contracts; while NASCAR on the other hand, is structured much closer to a dictatorship – with the profits being retained by NASCAR Corporate which is owned solely by the France Family.
Let’s examine the recent history and evolution of NASCAR: during the global economic expansion following the tragic events of 2001 – 9/11 & the death of Dale Earnhardt Sr., NASCAR experienced unprecedented interest from corporate sponsors; and growth was fueled by new television contracts with Fox and NBC. Because of NASCAR’s unique business model, which is vastly different than other sports, the industry flourished from 2003 until recently, gathering new teams, with investors and manufacturers flocking to the industry.
As a point of reference, NASCAR is the ONLY major US sport without a franchise model including profit sharing agreements. NASCAR Teams operate in a free market where teams must survive without much financial assistance from NASCAR Corporate; and where new teams can easily compete if they have the financial backing. I was a personal beneficiary of this policy – and at 23 years of age secured an agreement to led Toyota Motorsports into the NASCAR Craftsman Truck Series and went on to build  their competitive platform for their NASCAR operation.
I am very fortunate to have realized my lifelong dream of owning and operating a top tier NASCAR team; and even more rewarding to have brought Toyota Motor Sales their first two NASCAR victories. However, this so-called free market is a complete farce! The teams must secure over 90% of their operating budgets from corporate sponsors – a/k/a advertisers. What is more infuriating, and what is not common knowledge, is that NASCAR and its sister company ISC retain the vast majority of the sport’s healthy television contract revenues, and even compete against the teams  for corporate sponsors -  the  lifeblood of the race teams.  As many know, AT&T was forced to leave Richard Childress Racing (RCR) as a primary sponsor because NASCAR Corporate signed an agreement with Nextel (now Sprint) with an exclusivity provision precluding other wireless and telecommunication companies from sponsoring any racing team. So with teams on the verge of a depression – and with automotive manufactures and corporate sponsors reducing their involvement – NASCAR is busy lining their pockets at the expense of the teams.
The most fundamental precept is that without teams – there is no NASCAR; but somehow teams have failed to act on this most basic concept to leverage their position within the sport. Maybe in the past the very wealthy owners such as Rick Hendrick, Jack Roush and Roger Penske were complacent and satisfied with receiving a nominal share in the television revenues; but in today’s economic climate and the ultra competitive advertising marketplace – teams who want to keep standing on their feet, need to act now and demand a fairer share in revenues – not for personal profit; but simply to survive.
The management of NASCAR has a real opportunity to bring forth a “rescue plan” to save teams from closing their doors and fracturing the appeal of NASCAR; which could have irreversible effects on future television contracts and ultimately the profits of the France Family. The beauty of the NASCAR “dictatorship” is that they don’t need to hold a vote or seek the opinions of others; instead, they can just swiftly act to provide an increase in the teams’ alterative revenues, which would enable teams to offer sponsors a lower cost of entry to advertise in NASCAR.
You can’t expect any company to spend $20M to sponsor a NASCAR Team – the ROI isn’t remotely competitive. NASCAR needs to think long term and be willing to sacrifice some of their short term earnings for long term stability and growth in the NASCAR economy.

Over the past several months, as the advertising market has become increasingly more challenging, I have written numerous posts about the need for NASCAR and Sprint Cup teams to evolve and innovate to stay competitive in the corporate boardrooms. In my posts NASCAR 2.0 and NASCAR Sponsorship 2.0, I discussed opportunities to generate revenues and exposure through digital media.

My unique perspectives are a result of “one of kind” experiences which are vastly different than any other thought leader in the NASCAR industry: a web 1.0 entrepreneur, NASCAR Team Owner (Bang Racing), and today, an executive in the current social and digital media industry. While there are unlimited opportunities for NASCAR to leverage digital media technologies and corresponding social/digital business models; I have a specific proposal for NASCAR and specifically Paul Brooks, President of NASCAR Media Group.

I know from my personal experiences in working with Paul Brooks at NASCAR, he is one of the most forward thinking executives at NASCAR and I hope he embraces the following proposal. For those unfamiliar with NASCAR’s approach to partnerships and licensing; NASCAR has historically required substantial licensing fees to pursue any type of business relationship, which in all fairness has generated significant profits in the past decade. However, moving forward in the dynamic digital economy and facing the challenges to continue to grow their audience and fan base, NASCAR must now look to tap into emerging technologies and unlock entrepreneurial ingenuity to develop innovative business models to increase fan exposure and create new revenue sources.

The first initiative I believe NASCAR should pursue is to open up access to the racing data acquired through the on-board computer/black box. Just to be clear, I am not suggesting that NASCAR should allow live telemetry for the racing teams, but I am proposing an online database which could be accessed for technology entrepreneurs, game developers, media, and entrepreneurs and racing teams. By enabling open access to the racing data that could be parsed and leveraged, businesses and entrepreneurs could bring forth innovation to drive new revenue sources and digital media exposure for NASCAR and its teams.

Technically speaking – NASCAR needs to publish a set of Application Programming Interfaces (APIs) which could be available for commercial and non-commercial use that could create the opportunity to unlock the creativity of technology and digital media entrepreneurs and leverage the private equity markets to develop business models to reignite the excitement and consumer interest in NASCAR.
Even though my current business focus has little to do with NASCAR or motorsports, I strongly believe that NASCAR must embrace new media business models and techniques. Paul, if you are interested to speak regarding these ideas -you know how to reach me. Best, Alex Meshkin.

Everything that could be said has been said – the Allstate 400 at the Brickyard was a total disaster and a complete disgrace for the entire NASCAR community. The most troubling aspect with the tire debacle was simply – the problem was easily avoidable. Goodyear saw the problem firsthand when it tested in April. The drivers saw it. And ultimately NASCAR refused to prevent this foreseeable tragedy. If Goodyear and NASCAR do not confront potential disasters and make proper plans to accommodate the problems, then NASCAR has a huge obstacle moving forward.
Without a doubt this was the most pathetic race I have ever seen; and with the economy in turmoil, this may be the straw that breaks many NASCAR Racing Teams’ backs.
The only redeeming result of the miserable race on Sunday – was NASCAR finally accepted responsibility for the actions or lack thereof. Earlier this week, Robin Pemberton Vice President of Competition of NASCAR released the following statement:

I can’t say enough how sorry we are and it’s our responsibility being NASCAR that we don’t go through this situation again, said Robin Pemberton, Vice President of Competition. The race didn’t come off like we had hoped, the fans didn’t get what they exactly wanted and we’ll do everything in our power – it won’t happen again, I can tell you that much.

Now that NASCAR has accepted responsibility, they should at least compensate the teams for the extreme cost for the extra tires; and at best refund the ticket costs to the 200,000 fans who witnessed this “race” on Sunday.

In my posting NASCAR Sponsorship 2.0, I previously discussed how teams have a real opportunity to leverage their “content” through digital channels creating supplemental advertising revenue to offset their losses in traditional on-the-car sponsorship. Some may ask, is there really an opportunity in digital advertising for NASCAR teams? A recent report from eMarketer, projects online advertising for sports sites will double from 2008 to 2012 – to $2 billion.

The sports site online advertising market is mostly untapped by NASCAR and remains a huge opportunity for race teams to tap into and ensure their continued viability in these difficult economic times.
While the most dedicated NASCAR fans are not your typical early adopters of online services; there still remains a tremendous opportunity to harness the power of the loyal demographic who embraces the internet as a regular source of news and entertainment. According to Quantcast, NASCAR.com generates approximately 3.7 M monthly unique users and peaks at over 6.5 M during the beginning of the season. So while the audience may be limited in numbers, the unmatched advertiser loyalty provides a desirable market opportunity to distribute content directly to fans through digital channels for racing teams such as Hendrick Motorsports, Roush Fenway and Joe Gibbs Racing. Unlike the franchised sports teams of the NFL, NBA, NHL and MLB; NASCAR Teams have complete autonomy of their online presence and content. This provides a significant value proposition where teams can leverage their content through a variety of online business models to create interaction with fans and ultimately new sources of advertising revenue. This would likely result in considerable exposure for their existing sponsors; and consequently create a new advertising inventory that would be measurable and provide a clear Return on Investment (ROI).
As a former NASCAR Team Owner, Sports Marketer and Digital Media Entrepreneur; I have succeeded in bringing new sponsors such as eBay and Toyota into NASCAR, and leveraged online advertising to unlock revenue sources from digital channels that created a history making NASCAR racing team. The potential has never been greater and the most successful teams have the largest market opportunity to generate significant value that can be monetized in the digital economy.

Over the past few years corporate marketing and advertising budgets have made a dramatic shift from Old Media towards New Media, which provides measurable customer acquisition with a recognizable ROI. Today, current NASCAR Sponsorship programs are structured much like Old Media, which fails to present corporate marketers with the value presented through “new media” channels. Now there are some who will say – sports marketing isn’t Old Media or New Media but Sports Media. While Sports Media does present a unique value proposition – at the end of the day, it does not provide corporate marketers a measurable customer acquisition medium -making it very similar to Old Media.
When specifically analyzing NASCAR as a marketing platform it’s undisputed that it provides unparallel consumer brand loyalty for sponsors; however “die-hard” fans, which are the most brand loyal – are unfortunately also a dying breed. As our country continues to face high inflation and a challenging economy for the middle-class, which is the loyal mainstay of the NASCAR demographic; it will become a less attractive marketing medium to corporate marketers.
Across the country, many businesses are attempting to adapt to this challenging economic market. Over the past number of months, the newspaper industry has announced wide scale layoffs as they attempt to transition their business to more online operations. The latest causality is The Atlanta Journal-Constitution that announced cuts to its work force by approximately 8 percent or 189 jobs. NASCAR is not alone; and needs to take heed and understand that it is no different than t the challenged models of the newspaper and Old Media industries – which also offer a branding and awareness platform with no real method to measure customer acquisition for its advertisers. Old Media is in a state of peril; and NASCAR and its teams must not make the fatal mistake of assuming they are immune to the fragile economy. Now is the time for them to reinvent themselves or they will face a similar dreadful business fate for their sponsorship prospects.
As a lifelong fan, former team owner and new media entrepreneur – I see numerous avenues to upgrade NASCAR from its current “1.0” platform to a “2.0” marketing approach; and leverage digital media technologies and social marketing techniques to provide unparallel fan interaction and advertiser ROI.
Back in 2003, in conjunction with the launch of my team Bang Racing with Toyota Motorsports, I developed a marketing platform and corresponding online venture to engage consumers and enable advertisers to target fans with online promotions and incentives. We successfully deployed a “points” based auction powered by eBay (a Bang Racing sponsor) and delivered unmatched ROI to our sponsors.
Today there exists technologies, which if employed could provide NASCAR and teams with a solution. Available web 2.0 architecture and social marketing techniques would enable NASCAR, teams and sponsors to leverage existing technology and increase their exposure, interaction and ultimately the sponsors’ ROI.
The most basic web 2.0 technologies, which have transformed online marketing, journalism and even politics, are “blogs”. They are free and easy to use but yet, not a single driver, team or even NASCAR has implemented one. This most basic concept is far beyond the understanding of most NASCAR insiders and demonstrates the antiquated approach to marketing.
NASCAR racing is entertainment and content; and while NASCAR Corporate controls the “content” at the racetrack; and teams are unable to successfully monetize their at-track presence – racing teams do have the ability to monetize their “content” away from the track – if they employ these new technologies. “RaceWorld”, which was a failed attempt by Michael Waltrip to engage fans in a physical structure, further demonstrates a lack of current business and technology savvy of NASCAR teams. Today, teams must embrace and engage fans through technology and the internet rather than expensive and traditional channels. A great case study is the success of online video – which is dominated by user-generated content – not by television networks or studios – this is the genius of the success of YouTube.
NASCAR teams, such as Hendrick Motorsports, Roush Fenway Racing and Joe Gibbs Racing could offset the devastating effects of projected manufacturer financial support losses and a difficult sponsorship market by simply distributing content through a variety of successful online businesses, which would increase advertisers’/sponsor’ impressions; while providing new revenue sources.
Through the use of live online streaming, micro-blogging, social networking and other web 2.0 concepts – NASCAR Corporate, racing teams and motorsports sponsors have the ability to receive an ROI capable of sustaining the growing costs of the sport. What are they waiting for – the race is on – and time is running out!

According to the Associated Press (AP) today, General Motors officially announced their first round of motorsports spending cuts. Troubled General Motors has notified two racetracks that operate NASCAR events that their current contracts will not be renewed as part of an overall $10 billion cost-cutting program.
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.

Scott Cooper, vice president of communications for SMI, said nobody is panicking.

We’ve seen bad times with the economy before, and we’ll likely see them again, Cooper said Wednesday. At the end of the day, we’ve still got a sport that pairs up well with the American car manufacturers. We believe the sport will continue to have tight relations with those manufacturers.

Read the whole article at ap.google.com

2007 Indy 500 Champion – Check, 2007 IndyCar Championship – Check, Superstar Actress Wife - Check, NASCAR Sponsor – Only in his Dreams.

In 2007 Dario Franchitti was one of the most accomplished drivers in American motorsports. When he moved from IndyCar (IRL) to NASCAR in 2008 he was full of hopes and dreams for an exciting future – and yet now he finds himself without a “ride” in 2008. What is happening in NASCAR? For Dario Franchitti, he isn’t sure what his future holds, but the former open-wheel star said Wednesday he’d like to remain in NASCAR.
It is not surprising, when viewing NASCAR and the economic climate today, that Dario Franchitti lost his ride when team owner Chip Ganassi closed down the unsponsored No. 40 Dodge – with 17 races into Dario’s first season in NASCAR.
But there is more in the making of this decision and the announcement really doesn’t surprise me – you have a team whose performance has been downright awful, a rookie driver struggling to adapt to a new form of racing, mass inflation in an already expensive business and serious downward pressure on the U.S. economy – specifically corporate advertising budgets. This is a wicked mixture for more future shakeups in the financially changed business model of team ownership in NASCAR.
The only question in my mind is when will there be a similar announcement from the Yates Racing organization. I can’t image that the Ford Motor Company will continue to fund the operations of a sponsor-less team; regardless of the fact that their performance has been promising.
More dark days are ahead for the NASCAR economy; rising gas prices and overall inflation are just the beginning – soon to come are significant effects of poor race attendance and souvenir sales. Since NASCAR Corp. is mostly focused on protecting the bottom line of their sister company – International Speedway Corp (ISC) – I would image there will be no relief in sight for the fledging racing teams – which are truly the heart and soul of NASCAR.