Alex Meshkin

It is not possible to predict the road NASCAR will travel by the time we reach the final 2019 checkered flag, but it will be entertaining to speculate.

This decade begins as NASCAR tail spins in the wrong direction it’s a sharp contrast to the beginning of the last decade when NASCAR viewership, attendance and corporate interest were all surging. Today, all of those trends are in reverse, and this decade will truly define whether NASCAR remains as a mainstream sport or becomes another fledgling motorsport series.

I believe the major stories and events that will affect NASCAR in the coming years will have little or nothing to do with on track racing. So let me begin with a few predictions before we take our first green flag of 2010.

2009 was a dreadful year for the print publications and it appears a mainstay in the NASCAR industry is also on the brink. It’s no secret that after the boom years of NASCAR earlier this decade, advertisers and sponsors have left the sport in droves – but until now the primary victims were racing teams. But on Monday, this time it was NASCAR Scene and its website, Scene Daily.

According to Daly Planet, it’s rumored the title that launched in 1982 lost almost its entire staff on Monday. It is run by the American City Business Journals, which is based in Charlotte. ACBJ is owned by Advance Publications, which publishes magazines such as The Sporting News, Vanity Fair, and GQ.

One thing is clear, print media and NASCAR is a lethal combination in today’s economic times. Let’s just hope that management at NASCAR begins to listen to their fans and competitors and bring about the right change to invigorate the sport’s fan base and advertisers.

Everyone is aware that a severe sponsor recession is hitting the NASCAR industry. But many are blaming the broader economic crisis as opposed to examining the dreadful trends eroding the NASCAR value proposition. NASCAR is facing a steady drop in television viewership, race attendance and overall fan interest, and the costs to operate a Sprint Cup team has almost tripled since 2002. Today, the top three teams – Hendrick Motorsports, Joe Gibbs Racing, and Roush Fenway Racing— are seeking complete season sponsorships between $22 million to $25 million. With the going rate per race anywhere from $500,000 to $750,000 – is there ANYONE who believes there is a ROI for sponsors at these prices? I don’t believe so.

Another alarming business trend, is that now, most sponsors want single-year deals. These days, a six-race package for $3 million qualifies as a “big deal” in Sprint Cup circles. The marquee free agent among sponsors is Ask.com, which spent about $4 million on its team deal with Hall of Fame Racing for the 2009 season and likely won’t spend more than that on the next deal, if indeed, the search engine decides to stay in the sport. Big name sponsors Allstate, DeWalt, Jack Daniel’s and Jim Beam will leave after this year, choosing to save that money or spend it elsewhere.

And of course, we are all aware of the market forces pushing the automakers to reduce their financial exposure to NASCAR – so I will ask the same simple question I have been asking for two years.

Why isn’t NASCAR doing anything to help the teams to ensure the long term viability of the sport?

I think the answer is pretty simple – they don’t feel they need too. And instead, want to continue pocketing the vast majority of the sports’ lucrative television contracts. And why, you may ask, has NASCAR (France Family) been able to dominate teams? I believe it is because NASCAR teams haven’t united into an association or partnership demanding the right changes to the sport. Just look across the pond to Formula 1 – while they face their own unique challenges, they do have a much more fair and logical business model. The teams are part of an association (Formula One Teams Association – FOTA), that collectively negotiates on financial matters and the adoption of rules affecting competition in their sport.

Whereas, when you look at NASCAR, you have a dictatorship run by Brian France, who I believe most will agree has single handedly undone many of the incredible accomplishments of his late father and grandfather. But as a former NASCAR team owner, I know the teams feel powerless. But it the truth be known, NASCAR is nothing without the teams. Now is the time for the teams to stand up and make a stand – the team owners are the only hope to save NASCAR. Teams must unite on common principles:

• Increased competiveness: major changes are required to the Car of Tomorrow to ignite fan interest
• Reduced operating expenses: less personnel at the track and NASCAR needs to follow the lead of Formula 1 and require race engines to be used at more than one event
• Modern technology: embrace fuel injection and alternative fuels/energy sources to make NASCAR an R&D platform for the automakers.
• Greater Revenue Sharing: Demand an equal share of the television revenues split between NASCAR, Race Tracks and Teams.

These 4 basic principles could reduce annual corporate sponsorship prices from $20 million down to $10 million – a marketing budget that could be justified to corporate executives. Plus, these changes would reignite the automakers interest in investing in the sport and most importantly, bring back the on-track excitement that race fans expect.

If teams do not take a united stand, but rather chose instead to continue to run around in circles spinning their wheels – they are facing certain annihilation.

Earlier today, Jeremy Mayfield was granted preliminary injunction from the U.S. District Court in Charlotte, NC – lifting his suspension levied by NASCAR – so he will be allowed to race this weekend at Daytona. This initial victory for Mayfield presents potential challenges for NASCAR and their credibility.

For those who are unfamiliar with the complexities of the judicial system, the legal threshold for receiving equitable relief is “irreparable harm” and without a question, IF Jeremy Mayfield is innocent, his continued inability to race, meets and exceeds this threshold for the U.S. District Court to intervene and provide relief to Mayfield. Or in the words of U.S. District Court Judge Mullen:

“Harm to Mayfield significantly outweighs harm to NASCAR”

While many in the NASCAR community may see this court proceeding as an isolated issue between Jeremy Mayfield and NASCAR – I believe this case could have significant rippling effects on the entire sport. Ultimately, it will challenge the “dictatorship” of the France Family and most likely require far greater transparency in NASCAR’s future actions. NASCAR’s arrogance may have finally caught up with them. Unlike any other major sport, NASCAR refuses to publish a list of banned substances – and Jeremy Mayfield claims (through his attorney) that NASCAR’s drug testing program does not meet federal workplace guidelines or follow proper procedure of SAMHSA [substance abuse and mental health services association].

But the greater dilemma that NASCAR faces is how to proceed with the ongoing Jeremy Mayfield legal battle. After NASCAR spokesman, Ramsey Poston, made accusations that Mayfield tested positive for methamphetamines, NASCAR would face a significant credibility challenge if they decided to settle the continued legal actions of Mayfield to circumvent continued discovery and future hearings/trials. However, on the flipside, the continued legal battle (Permanent Injection Hearing and Possible Civil Trial for Financial Damages) could expose very damning evidence for NASCAR and other competitors. It’s no secret that NASCAR “plays favorites” with their application of the rule book and other policies, so IF other competitors have tested positive for banned substances, and NASCAR failed to enforce their “policy”, it could cause severe and lasting damage to NASCAR. So everyone, watch out in the days and months ahead – lots of debris could be flying through the air.

Rumors are running rampant that Danica Patrick is going to jump from IndyCar to NASCAR. Is this a negotiating tactic with Andretti Green Racing and Chip Ganassi Racing or is she seriously considering a move to stock car racing? One must wonder why the poster child of IndyCar Racing would take the risk and make a move to NASCAR, which undisputedly, is crumbling as I speak. I can image NASCAR dangling HUGE financial incentives and prepackage endorsements, but why take the risk?

On the flipside to NASCAR’s continued problems with retaining the support of the automakers, IndyCar Racing is poised for a significant rebound in sponsorship demand and automotive support in the coming years. There is widespread speculation that Volkswagen/Audi, and possibly Toyota, BMW and Mercedes-Benz may join the IndyCar series in 2012. This is the result of IndyCar’s long-term vision and planning to strategically position itself as a “green” marketing platform for the automakers. A few of years ago, a move to NASCAR may have been considered a “step up” – but one most wonder if that still holds true today. Two of the most prolific IndyCar racers in this past decade struggled (and I am being kind) in their attempt to cross over to NASCAR. Dario Franchitti, the 2007 Indy 500 and IndyCar Champion failed miserably in his 2008 NASCAR foray and Sam Hornish continues to struggle. I don’t mean to be disrespectful to Danica – but she couldn’t remotely keep pace with Sam Hornish or Dario Franchitti in IndyCar, so I don’t expect her to be any more successful than Dario or Sam in NASCAR (Note: Dario and Danica were teammates 2006-2007). The odds are clearly against her if she makes the move.

My sources indicate that NASCAR, led by Brian France is offering significant guarantees to lure Danica to NASCAR. So if her primary motivation is money – we should expect her to make a debut later this year in preparation for the 2010 NASCAR season. A more intriguing question remains – why is NASCAR focused on attracting one driver, when the entire sport, (namely race teams), are facing financial annihilation? This not only is short sighted, but outrageously blind to the real problems facing the sport.

Many believe Danica is NASCAR’s bandage to stop hemorrhaging sponsors, fans and other commercial interest. I remain skeptical. While I agree she would drive a short term bump in ratings- the fundamentals of NASCAR racing is spiraling out of control – and no amount of estrogen is going to stop the bleeding. NASCAR needs to focus on fixing the business model challenges for teams and improving the COT – so the on-track racing can return to what fans deserve and expect.

Treating NASCAR like an amusement park and adding a new “attraction” may seem like a good idea – but in the end, it will only disguise the fundamental challenges that may devastate the sport that many still love. And Danica, well, she may be just another bump in the road for NASCAR – and at the end of the day, regret her move in the wrong lane.

According to Sports Media Watch, FOX has its lowest rated NASCAR season ever.

A year of declines has concluded with FOX drawing its lowest average rating for NASCAR since the net began airing races in ‘01.

Excluding the rain delayed Coca Cola 600, 12 NASCAR races averaged a 5.1/11 rating and 8.5 million viewers on FOX during the 2009 season, down 11% in ratings and 9% in viewers from a 5.7/12 and 9.3 million last year, and the lowest rated season ever for NASCAR on FOX.

Last Sunday’s Autism Speaks 400 drew a 4.0/10 final rating on FOX, down 11% from a 4.5/11 for the same race last year.

Every single, solitary NASCAR Sprint Cup telecast on FOX — all twelve races, the Budweiser Shootout and Daytona 500 Qualifying — saw declining ratings this season. 10 of the 12 races saw double-digit declines, including the last nine.

Despite the declines, NASCAR on FOX easily topped its competition. The 5.1 rating for NASCAR races on FOX is 65% higher than the 3.1 average for the ‘09 NBA Playoffs (not including the ongoing NBA Finals) and 16% higher than the 4.4 for last year’s MLB Playoffs (including the World Series).

Additionally, the 8.5 million viewers is 42% higher than the 6.0 million for last year’s college football bowl games (including the BCS), and is only slightly off from the 8.9 million viewers for last year’s NCAA Tournament (including the Final Four).

Ratings for NASCAR on FOX in 2009.
Asterisk (*) indicates race was moved to another day because of rain.

Date	Net	Race	2009 rtg	2008 rtg	2007 rtg	vs. ‘08	vs. ‘07
Sun., 2/15/09	FOX	Daytona 500	9.2	10.2	10.1	-10%	-9%
Sun., 2/22/09	FOX	Auto Club 500	6.0	6.2	6.7	-3%	-10%
Sun., 3/1/09	FOX	Shelby 427	6.5	7.1	6.3	-8%	3%
Sun., 3/8/09	FOX	Kobalt Tools 500	5.5	6.4	5.2	-14%	6%
Sun., 3/22/09	FOX	Food City 500	4.5	5.5	5.1	-18%	-12%
Sun., 3/29/09	FOX	Goody’s Fast Pain Relief 500	4.6	5.3	5.3	-13%	-13%
Sun., 4/5/09	FOX	Samsung 500	4.7	5.4	5.6	-13%	-16%
Sat., 4/18/09	FOX	Subway Fresh Fit 500	3.6	4.4	4.4	-18%	-18%
Sun., 4/26/09	FOX	Aaron’s 499	5.0	5.7	5.4	-12%	-7%
Sat., 5/2/09	FOX	Russ Friedman 400	4.0	4.5	4.3*	-11%	-7%
Sat., 5/9/09	FOX	Southern 500	4.0	4.8	4.2*	-17%	-5%
Mon., 5/25/09	FOX	Coca Cola 600	3.3*	4.7	4.5	–	–
Sun., 5/31/09	FOX	Autism Speaks 400	4.0	4.5	2.3*	-11%	–
Average rating			5.1	5.7	5.6	-11%	-9%

Questioning the future of Dodge’s continuing involvement in NASCAR is nothing new – back in September 2008, I wrote about the pending withdrawal of Dodge from NASCAR and unfortunately this appears to be the plan for 2010. (http://tinyurl.com/dlymm8)

Many, at first glance, didn’t feel that the Chrysler bankruptcy filing on Thursday would have any effect on the Sprint Cup teams backed by Dodge. And Chrysler was quick to issue a statement on Thursday reaffirming their commitment to NASCAR. It really should not come as a surprise that the new management from Fiat realizes the current iteration of the COT and the marketing platform offered by NASCAR is too expensive and doesn’t align with their new focus. Fiat/Chrysler’s new focus is on small fuel efficient cars and not on outdated large cars that inspired the NASCAR “Car of Tomorrow”.

Many sources strongly believed that Chrysler (Dodge) may pull its NASCAR funding in 2010. As many know, Dodge already slashed its motorsports budget by 30 percent this year. Then the question becomes this: What would happen to the teams that Dodge financially supports, if indeed they pull their support? That is the great unknown.

As I have professed for over two years, NASCAR is facing a crossroad; but yet, it continues down an ill-fated pathway of an outdated “Car of Tomorrow” instead of adopting a fresh approach that would leverage “green technologies” such as, biofuels and renewable energy, and a branding platform that is attractive to companies like Fiat. As I stated in July 2008,

You must wonder – why is NASCAR asleep at the wheel? Over the past decade, NASCAR has developed a phenomenal market platform for all types of companies – but without the financial and marketing support of the carmakers – NASCAR teams can’t afford to operate.
The time is now for NASCAR to embrace tomorrow’s future – alternative energy and fuel efficiency branding is required for the long-term viability of the sport as a marketing platform for the automotive manufacturers. (See: http://tinyurl.com/cwcjpj)

I am a strong believer that negative events create opportunities. NASCAR and the Big 3 (GM, Ford and Chrysler) at one time were going down a parallel road, but unfortunately as NASCAR started to become a rapidly growing mainstream sport in the early part of the decade and corporate sponsors rushed into the sport with their large marketing budgets looking to tap into this brand-loyal demographic, NASCAR lost sight of the value proposition and ROI required to keep the Big 3 involved in NASCAR. In the next couple of years, many will ask, why didn’t NASCAR do more to keep the Big 3 involved? The answer is quite simple, NASCAR and their Teams have a huge disconnect, and what’s good for NASCAR isn’t always what’s best for their Teams. Unlike all other major sports, like the NHL, NBA, MLB, and NFL; NASCAR team owners don’t have any say in the direction and decisions of the sport, nor do they participate in the financial upside during the good times. But what I do know is that they do bare the majority of the consequences during the difficult times. When Chrysler/Dodge leaves NASCAR, many teams will suffer and likely shutdown, but NASCAR Corporate will face very little short-term repercussions.

With the economic recession, dreadful environment for automakers and falling ratings of NASCAR racing, NASCAR has the opportunity to implement needed changes to put the sport in a position for growth and long term sustainability.

The solutions and answers for NASCAR are quite simple: race a car that is aligned with the automakers objectives, provide a fair distribution of revenues to competitors (teams), implement rigid cost controls; and, equally as important, please allow the drivers the freedom to race without the fear of penalties for relatively harmless actions. NASCAR, after all is said is done, should be entertainment.

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.

Ad Sponsors Peeling Away From NASCAR, Too

Looking to catch a NASCAR wreck? Here’s one: The racing association’s sponsors are pulling out, NASCAR CEO Brian France told a Reuters summit. France insists he’s talking to potential new sponsors, but wouldn’t name names.

NASCAR saw a $150 million gain in sponsorship revenue in 2008, a gain France says won’t be repeated. “The question is, are we going to back up,” he said.

Frustrated over the lackluster excitement of the 2008 NASCAR Sprint Cup Series – I feel I am not alone. The racing was bland, personalities were muffled and there was not a compelling reason to watch most races. I tend to be a traditionalist in my view of the sport and the championship points system – but times have changed; and subsequently, their needs to be a dramatic adjustment to ignite fan interest.

We all agree that NASCAR has a lot of problems. Simply but, this may be an example of the “chicken or the egg” syndrome. The fundamental metric which must improve is fan viewership. While this is not the end all solution – it would significantly improve teams’ ability to attract more corporate sponsors. At the same time, increasing fan viewership alone will not fix the sponsorship depression and teams’ ability to finance their operations. NASCAR needs resurgence – and if fan viewership is a MUST to reverse the current trend to drive more sponsor interest – then HOW do they make it happen?

Unlike any other major American sport – NASCAR rewards consistency over victory. So basically, under the current points system – you could finish second in every race and pretty much be guaranteed the Championship in the Sprint Cup Series. I don’t know about you but I have never celebrated my favorite driver’s runner-up finish. The famous philosopher Ricky Bobby once said, “If you ain’t first, you’re last”. Or, as legendary driver Dale Earnhardt put it, “Second place is just the first loser”. It’s time for NASCAR to incentivize and reward winning! Fans celebrate winning drivers and sponsors reward winning teams – the Championship and monetary system needs to reward “winning” and not “staying out of trouble”.

I’m curious – is there anyone else out there wondering why a driver can win the Sprint Cup Championship without a single race victory? It doesn’t make sense to me! And furthermore 4 of the 12 that qualified for the 2008 Chase for the Cup didn’t even win in the regular season. Sorry guys, while I have the greatest respect for Jeff Gordon and Kevin Harvick – honestly, you didn’t win in the regular season (or the Chase for that matter) – so you shouldn’t have the opportunity to be the Sprint Cup Champion.

So here are the basics of my proposal to increase on-track excitement and create more fan interest:

• You must win a race during the regular season to be a part of the Chase for the Cup and the Chase should be limited to a maximum of 10 drivers.

• The Chase Contenders should have a completely different points system which makes the championship more competitive and puts an emphasis on race victories.

• Redistribute the championship fund year-end bonuses to individual race victories. For example, if you were to take $20M from the year-end points fund and add $550K to each race victory – that would increase the average race winnings for 1st place to about $1 million per race. This would encourage drivers to take risks and forgo their “points racing” mindset which is ruining the sport.

NASCAR’s failure to act and evolve – if continued down this slippery slope – will result in further sponsor deflections, which could cause an irreversible contraction in all aspects of the sport we all love.

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.

I typically do not publish press releases but I believe Robby Gordon Motorsports (RGM) and Jim Beam should be commended for their efforts to support our troops and their families. Starting tomorrow – on Election Day, RGM and Jim Beam will launch an online charity auction giving racing fans and all Americans the opportunity to show their patriotism, and to bid on a rare racing collectible – with 100% of the proceeds going to support our troops.

If possible check out the auction at: www.ebay.com/operationhomefront

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Deerfield, Ill. – November 3, 2008 – As Veterans Day approaches, racing enthusiasts and philanthropists will have a chance to bid on a unique racing collectible while supporting America’s service members and their families. Robby Gordon Motorsports (RGM), in combined efforts with Jim Beam® Bourbon, has kindly donated the special edition Jim Beam/Operation Homefront race car hood to Operation Homefront for auction.
RGM and Jim Beam created a special Operation Homefront paint scheme for the Richmond and New Hampshire NASCAR® Sprint Cup Series™ events in order to increase awareness of Operation Homefront, a nonprofit organization dedicated to providing emergency assistance and morale to U.S. troops and their families. To celebrate Veterans Day, they will run this paint scheme once more in Phoenix and will increase their commitment by auctioning off the hood to help raise funds for the organization.
“When Jim Beam asked me about running the paint scheme again and donating the hood, I was 100 percent in,” said Robby Gordon driver of the No. 7 Jim Beam Dodge. “Veterans Day is a time to remember the commitments made by the men and women who have served this country, and I’m proud to join Jim Beam in supporting Operation Homefront and our nation’s military families.”
Amy Palmer, founder and vice president of operations for Operation Homefront®, expressed her appreciation for Jim Beam’s and Gordon’s ongoing support. “Robby and Jim Beam have done so much for the families we serve,” she said. “We know we can count on them as well as NASCAR fans to be there for the military community.”
Jim Beam, the world’s No. 1-selling bourbon, formed an association with Operation Homefront earlier this year when it recognized the organization had the same commitment and values as the Jim Beam brand – true character, integrity and doing the right thing.
“This donation is aimed at helping the people who risk their lives to protect our freedom, our troops and their families,” said Brian Gallagher, manager, Jim Beam Racing. “We’re so proud of Operation Homefront and all that they do.”
The hood, autographed by Robby Gordon, will be auctioned off on eBay starting November 4 with the auction closing Veterans Day, November 11, just in time for holiday gift giving. All proceeds will go to Operation Homefront through eBay’s charitable arm, eBay® Giving Works, a fundraising platform for nonprofits that offers buyers and sellers the opportunity to support their favorite causes through trading on eBay.
To access this auction directly, view additional pictures and place bids go to www.ebay.com/operationhomefront

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.

The global credit crisis may be slowing the M&A markets of Corporate America, however, mergers and acquisitions remain all the buzz in NASCAR. Back in July, I wrote Team Consolidation on the Horizon and it appears more likely than ever that Michael Waltrip Racing (MWR) led by Robert Kauffman will acquire Chip Ganassi Racing.
Additionally, speculation is running rampant – Gillette Evernham Motorsports (GEM) will acquire Bill Davis Racing (BDR). With BDR having yet to secure a replacement for Caterpillar for the #22 Toyota Camry, the value proposition of the proposed acquisition appears to be strictly around the coveted partnership with Toyota Motorsports and BDR’s ownership in Triad Racing Development. So it appears that if both transactions are completed; and Gillette changes from Dodge to Toyota – Dodge Motorsports will be left with just Penske Racing and Richard Petty Racing. Furthermore, I suspect at the root of Gillette’s motivation to acquire BDR is the reality that Dodge is looking to leave NASCAR all together. As my readers know, earlier this month Dodge announced their plans to leave the NASCAR Truck Series and with the founding Dodge Sprint Cup Team (Evernham) possibly joining the Toyota camp through the BDR acquisition – I think this will be most definitive indication that Dodge is saying “bye bye” to NASCAR.
It’s rather apparent, that in 2009 the pit lane of the NASCAR Sprint Cup series will be dominated and owned by just a few organizations. One must wonder – will NASCAR reverse their policy to limit teams to just 4 cars? – Because in 2010, Roush Fenway Racing will be required to “sell” one of their teams which is expected to be transferred to Yates Racing. However, NASCAR may reverse or postpone plans to prevent any additional sponsorship deflections.
With primary sponsors becoming increasingly elusive and operating costs continuing to soar, the benefits of team consolidation may be the only way for the NASCAR teams to have a fighting chance of survival. The fact is clear: The economies of scale and integrated marketing advantages are vital to remaining competitive on the track and attractive to the few remaining potential sponsors.
Is there any hope for NASCAR’s future? Yes, but not without some major changes and “redistribution of wealth”. NASCAR’s unfair revenue model and overall lack of innovation are the primary contributing causes to the sponsorship crisis for race teams. NASCAR needs to immediately revise the distribution of TV revenues to fairly compensate the race teams – or face the reality that the life expectancy of many NASCAR race teams are limited at best and more teams will continue to close their doors.

The first domino has fallen in the shakeup with the Big 3 automotive manufacturers’ involvement in NASCAR. The exit announcement by Dodge is the latest blow to the NASCAR Craftsman Truck Series which has yet to find a title sponsor to replace Craftsman in 2009 and beyond. In 2009, Dodge will not provide any financial support to any teams in the series. Dodge Motorsports senior manager Mike Delahanty said,

“We’ll have no factory-funded teams.”

Delahanty told ESPN.com,

“When times are tough, there are certain things that are lower on the priority list than others.”

This leaves us to ponder: Are the other series next? For years, rumors have circulated that Dodge would pull out of NASCAR- is it finally happening?

Earlier this decade Dodge was a powerhouse in the NASCAR Truck Series, winning 46 of 99 races from 2001-2004 and championships with drivers Bobby Hamilton in 2004 and Ted Musgrave in 2005. This year, Dodge scaled back its involvement and provided manufacturer support only to Bobby Hamilton Racing-Virginia. However, Dodge informed the team that its factory support would end this season. Delahanty said the manufacturer’s involvement with the Sprint Cup and Nationwide Series is unaffected.

Now you might ask: why hasn’t NASCAR attempted to “fix” the Truck Series value proposition to raise its “priority” with Dodge and the other manufacturers – the answer is part of the problem for NASCAR – with unprecedented sponsorship deflections in the Sprint Cup Series, the Truck Series is a low priority for NASCAR.

As the former owner of Bang Racing, Toyota’s first NASCAR Team to compete in the Truck Series and the leading competitor of Dodge Motorsports, it is a sad day for the entire NASCAR community. As I have predicted, it is only a matter of time before all of the Big 3 reduce their involvement in NASCAR. The writing is clearly on the wall – the inverse proposition of marketing costs versus benefits is an alarming trend and appears to be continually ignored by the NASCAR leadership.

Instead of squarely addressing the concerns of corporate sponsors and automotive manufacturers’ – NASCAR seeks new automotive partners to rejuvenate the floundering Truck Series. In 1999, Dodge Motorsports announced their plans to enter the Truck Series and, at the time, were widely credited with saving the series. In 2003 the Truck Series was still floundering andfloundering and the Big 3 began scaling back yet again, but Toyota Motorsports and Bang Racing soon entered the the Truck Series and delivered an unprecedented amount of media attention which fueled substantial increases in technical, financial and marketing spending from the Big 3 manufacturers in the Truck Series. But now times are tough; and with the uncertainty and questionable sustainability of the Truck Series, combined with plummeting light-truck sales; the odds of NASCAR finding new automotive manufacturer partners is rather slim. Sadly, it appears NASCAR will attempt to solely treat their symptoms and leave the underlying problems unresolved.