• UNCONVENTIONAL WISDOM:

Monday, October 27, 2008

IT's the ECONOMY

I'll be a guest next Monday (Nov. 3) on Racing Roundup Arizona, for the start of NASCAR week here. That will also mark the beginning of RRA's 12th consecutive year on the air. Congratulations to (host) Jamie and (producer) Betsy Reynolds. The show airs 7-9 p.m. (AZ time) on 1310 KXAM radio. You can listen on http://KXAM.com or http://RacingRoundup.com .


NASCAR finally confirmed that Camping World will take over for founding series sponsor Craftsman next year in the Truck series. The announcement pegged it as a seven-year deal. The PR line is the Trucks will deliver "over $100 million worth of exposure."

The key quote was this from Camping World Chairman and CEO Marcus Lemonis. (I've added bold emphasis.)

“With the state of the current economy, Camping World’s main objective is to communicate our brand in the most cost-effective manner and to promote affordable, family fun. Additionally, we feel strongly that this sponsorship will dramatically increase our customer base in experiencing our entire product offering. We expect this relationship to not only benefit the teams and fans, but we will put a special emphasis on supporting the four auto manufacturers in selling more trucks and the Truck series sponsors to yield the same return on investment that we’ve enjoyed. Camping World will work diligently to promote the four manufacturers and team sponsors by positioning them as preferred product providers to the four million RV enthusiasts we currently serve.”

With Dodge already having announced the end of its Truck support, and Ford limited to technical help to Roush Fenway, this is good news -- if it actually happens. And works.

Meanwhile, here are some of NASCAR Chairman Brian France's comments about the economy, during the Camping World announcement Q&A:

"We're off, but only in sort of single digits as it stands now. We tend to fare much better than other industries thankfully. That's because sports are so culturally ingrained to fans. It's one of the last things that they want to not participate in."

"We're fortunate. We are nervous like everybody else. We're taking every precaution we can in terms of getting costs out of our system on behalf of the team owners, on behalf of the track operators. But this is also a time when you can't freeze either. You've got to still be aggressive and still push hard your product."

"I think the number is going to be close to between $80 and $100 million of new money that is predicted to flow into NASCAR from a team sponsorship in '09. Now, that's lower than we've traditionally had as a rate of increase. But nonetheless, with the backdrop of the economy we're living in today, it's fairly good.

"Most of the teams in the Sprint Cup level are well-funded. There are obviously some teams that aren't, but there are always teams that aren't. Some of that is based on performance, not necessarily the economy. So teams that tend to perform consistently well tend to do very well in the sponsorship area as you would think.

"But is it tighter? Are teams looking to be more creative? Sure. Are teams nervous or not hearing from their current sponsors about doing one thing or another thing differently or less? Sure. That's just the nature of it. Every industry is looking around trying to get more value, trying to get more out of something that they're already doing or may do in the future. That's just the nature of dealing with and depending on corporate America to the level that NASCAR does."
********************************************************************
Since I agree with everything Jeff Burton says here, I am just going to reprint his voice-of-reason comments from last weekend at Atlanta:

“Well I think that’s actually in a broader context, if you listen to some financial analysis the mood of the country has more to do with the economy than the economy has to do with the economy. I’m not sure I buy that. I’m not an economist, I don’t know. But it just seems to me that the economy, you can’t ignore it.

“You can’t ignore that people are being laid off, unemployment rates are rising, inflation is rising, stock market its doing what it’s doing, the bail-out and all that stuff. It’s such a big story that I think it would be wrong for us to just act like it’s not happening. More importantly is the people who are buying the tickets, they know what’s happening because they’re the ones that are getting furloughed and their wages are going down. I think that not talking about it isn’t beneficial. I do believe that our sport, as probably most sports, we have a tendency to beat this story into the ground, but on the same token, it is there. It’s not something that we’ve created by any means.

“The only thing that we can do as a sport, in my opinion, is what we have to do, we have to make a compelling reason why people need to come watch a race and why they need to tune into it on television. If we do that, then we’re going to have better days when the economy is good. We’ll have bad days when the economy is bad because I’d venture to say that our sport, if you look at what we race for, what it takes, what it costs us to spend a year to race vs. the purse that we receive, I would be willing to bet that we’re pretty low. The purse is maybe 25 percent, 35 percent at the most of what we have to raise to do what we have to do.

“So we have to have corporate America, if we don’t have it we can’t succeed. So it impacts us, because if the corporations can’t spend the money and the people can’t afford to come watch it, then there’s teams that don’t have it. Ignoring it doesn’t make it go away but I do believe we will beat a story in the ground.”
********************************************************************With the help of this Jimmie Johnson quote, from Atlanta, I hope we've rested the "any publicity is good publicity" falsehood forever. His reference is to the severe NASCAR penalties to the No. 83 Toyota Cup team for rules violations:

"The old saying that 'Any press is good press' is wrong in this respect. When you have that negative press on your team, it does put question marks in people's minds, and that is something that takes a long time to overcome. I've lived it firsthand. It's a tough thing to overcome."
********************************************************************
Two "amusing" TV moments from Atlanta: 1) Ryan Newman not knowing the name of the sponsor of his winning Kevin Harvick Inc. Chevrolet after the Truck race. 2) Sunday, when it was reported that Michael Waltrip had an electrical "short in his helmet," ESPN's Andy Petree said something to the effect that "that's been going on for a while. Just kidding, Michael."
********************************************************************
Have you PAID for your media workspace lately? Check this out from the Chicago Sun-Times:
http://blogs.suntimes.com/sweet/2008/10/obama_campaign_selling_chicago.html

[ more Blogging the Chase next Tuesday . . . ]