Alex Meshkin

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.

Has anyone noticed the decreased television advertising from Anheuser-Bush, Miller and Coors during NASCAR Sprint Cup race telecasts? Following the split of Dale Earnhardt Jr., Budweiser and Dale Earnhardt Inc.; Anheuser-Bush has apparently rapidly diminished their dominate presence over our weekly telecasts. In my opinion, this is the procuring cause to Miller and Coors’ also reducing their media placements during NASCAR broadcasts. While I don’t have the numbers to backup my observations, nonetheless, I think the anecdotal evidence is enough to question the “Dale Jr” effect on the return-on-investment (ROI) of the NASCAR television contract for Fox, NBC, TNT and ABC/ESPN.

So I question, is their enough of a demand to offset the loss of beer ads? If so, I certainly would be surprised if that demand will withstand the current economic pressure. But for sure, no one expected the self-interested actions of Teresa Earnhardt to have such a negative impact and affect so many other parts of the NASCAR food chain. It seems apparent that you can add the broadcasters to the list of people and companies that are keeping their distance from Teresa Earnhardt.

President of Toyota Motorsports and Alex Meshkin

Alex Meshkin, CEO of huvi; and an innovator of digital media secondary markets, is a serial entrepreneurial that is well documented in leading publications including CNBC, Fortune, Fox News, and many others. Alex Meshkin is not a newcomer to the technology world and at the age of 19 started his first internet company. However, he is most widely known for his success as the Founder and CEO of Bang! Racing, a company formed through a strategic partnership with Toyota Racing Development. In 2004, Bang! Racing became the most successful first year team in NASCAR history, going on to break numerous motorsports records; including Alex becoming the youngest NASCAR team owner in NASCAR history at the age of 23; and Bang! Racing becoming the first NASCAR team to bring Toyota their FIRST two victories.

Additionally, Alex Meshkin managed a Joint Venture between Bang Racing’s parent company (Bang!) and Vertrue Inc. (NASDAQ: VTRU), and strategic technology partner eBay (NASDAQ: EBAY) to launch the first consumer membership program in the field of motorsports targeting NASCAR fans. Together, Bang!, Vertrue and eBay launched an innovative consumer membership which delivered consumers deep discounts at leading NASCAR sponsors including; Home Depot, Sunoco and Target, and provided incentive credits redeemable through an online auction powered by eBay.

Most recently, Alex Meshkin served as Vice President & GM of Cloverleaf Partners a global software developer and sports marketing agency.

Alex Meshkin is an avid motorsports enthusiast, a passionate golfer and poker player.

LinkedIn Profile: http://www.linkedin.com/in/meshkin

Check out his videos on YouTube: http://www.youtube.com/alexmeshkin