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Monday, August 24, 2015

THE WEEK IN RACING BUSINESS

(What follows was written before Justin Wilson's accident at Pocono Sunday. It should be read in that context.)

Business of Racing stories crashed head-first into the news headlines last week. It proved yet again that one can't be considered an in-the-know racing fan -- or journalist (and there are more than a few pretending to know) -- without understanding at least a little about the Biz (and Politics) of the sport/industry.

Rob Kauffman set off tremors in the NASCAR garage area by withdrawing his financial support of Michael Waltrip Racing for a new alliance with Chip Ganassi Racing. As a result, MWR will cease operations as a full-time Sprint Cup team. Clint Bowyer is the highest-profile one looking for a place to work in 2016, but the harsh reality is a couple hundred jobs will be lost, and it's very questionable if all can be absorbed by the industry. NASCAR likely will need a few new "Start and Park" cars to have a 43-car field next year.

Kauffman's and Bowyer's quotes pre-Bristol were unusually revealing, with Kauffman saying MWR was not "viable." It calls into question how much primary sponsors Aaron's and 5-Hour Energy were paying the team and how much of it was being spent to make the cars competitive. Read Kauffman's ground-shaking quotes below in "Power Players." While not specifically named by Kauffman, Michael Waltrip's image surely has taken a huge hit, and it will be telling how Fox chooses to frame this story involving one of its "talent" when the network resumes NASCAR coverage next season.

Kauffman's words came against the backdrop of a significant stock market drop. Don't for a moment think a 2,000-point decline from the Dow's all-time high doesn't mean anything to the likes of Roger Penske and Rick Hendrick (a prolonged market slump will impact their auto dealerships) -- and their sponsors. While fans and race promoters cheer low gas prices, oil dipping below $40 a barrel could have negative consequences for the racing involvements of Mobil, Shell and Sunoco. 

Even a casual look at NASCAR's Xfinity and Camping World Truck Series teams shows how thinly many of the cars/trucks are sponsored. Chris Buescher almost won last Friday night's Xfinity race in a Mustang showcasing one of owner Jack Roush's businesses. Penske has, in effect, self-funded some of his cars via his truck leasing business. 

Over at IndyCar, some suspicions were confirmed with the settlement of Michael Andretti's legal dispute involving his race team and his sports marketing enterprise. A couple primary sponsors have apparently stiffed Andretti the last few years. He sued the New Orleans race owners for payment involving his promotion of that ill-fated event and his promotion of Milwaukee never met expectations. 

IndyCar is hurting for Big Time sponsors and one can't help but wonder about the future of teams like Sarah Fisher's going forward. And, while this has been a concern for several years, it's not too early to wonder if economic conditions will allow for a full 33-car field for next May's 100th running of the Indianapolis 500.

John Force still doesn't have his NHRA operation fully funded. Formula One's back end of the grid is near desperate for a larger cut of the funds doled out by Bernie Ecclestone. For the second straight year McLaren isn't displaying a major sponsor. Ecclestone is saying Monza, a near-sacred sight for Grand Prix racing, might not be able to pay the fee he demands for a race date.

One positive was the announcement that Nature's Bakery (to be honest, I company I had never heard of, and I guess that's the point of the sponsorship) will be Danica Patrick's new primary sponsor and that she has a new multi-year contract with the Tony Stewart-Gene Haas team. I don't see any way Nature's Bakery will be paying what GoDaddy was and it's reasonable to think Danica's own $ guarantee won't be what it was.

All of the above are worth considering while you are watching the laps go by . . .


I've written before that, while I am not a golfer, I follow the golf industry because I see numerous elements that compare with motorsports. I've been asked a few times over the years about the relationship between individual media people and drivers or owners and how this might be reflected in the extent or tone of news coverage. It's worth noting that, while Arnold Palmer's accomplishments rightly make him one of America's top-five sporting icons, Arnie was smart enough to gain favor by often taking the golf writers to dinner.

Anyway, I came across this story about Jordan Spieth. It's long, but revealing for those interested in such things:

http://grantland.com/the-triangle/the-need-for-spieth-jordan-spieth-golf-pga-tour-bridgestone-invitational-the-masters-us-open-british-open-sports-media/


POWER PLAYERS for the week of August 23: This week's 10 most influential people in the Business and Politics of Motorsports, as selected by long-time journalist/publicist and industry insider Michael Knight. 

  1.  Juan Pablo Montoya, Graham Rahal, Scott Dixon -- Who will win the Verizon IndyCar series championship Sunday at Sonoma? This matters because the champ will be expected to do more media and present an upbeat "face" for the series.

  4. Rob Kauffman -- His quotes about leaving Michael Waltrip Racing were blunt and close to devastating: "From a business standpoint, that didn't make sense any longer. You can't have a top-10 budget and top-10 resources and not be in the top 10 for a sustained period of time. It's a performance-related business. It's all about performance. It's a great sport but a very difficult business model. From a business decision, it just made sense to not go forward with that organization, which is not commercially viable."

    5. Danica Patrick --  Signs multi-year contract extension with Stewart-Haas Racing and new primary sponsor Nature's Bakery. What to watch for: If she can produce better race results and how she might reinvent her image to suit the needs of Nature's Bakery. 

  6. Bruton Smith -- Speedway Motorsports Inc. (Charlotte, Bristol, Sonoma, Atlanta, etc.) founder reveals non-Hodgin's lymphoma diagnoses.

  7. Bernie Ecclestone -- Formula One's commercial czar casts doubt on future of GPs at historic Monza and Nurburging because they can't meet his price. If it's a bargaining ploy, it's a scary one for those who believe such legendary tracks are as important to F1 as Ferrari and Lewis Hamilton. 

  8. Jimmy Prock -- His driver, Jack Beckman, didn't win last Sunday but their combination is setting new NHRA Funny Car records. They are the favorites going into the Chevy Performance U.S. Nationals and for the class championship. 

  9. Kody Swanson -- Back-to-back wins in the USAC Silver Crown Tony Bettenhausen 100 at the Illinois State Fairgrounds -- after starting 16th!

 10. Steve Kinser -- Sprint car racing's "King" no longer runs full-time with the World of Outlaws, but shows he can still win -- and attract press coverage and fans -- taking Friday night's 35-lap UNOH All-Star Circuit of Champions feature at Michigan's I-96 Speedway.

more next week . . . ]