10 YEARS LATER: REMEMBERING THE END OF RACING's SPONSORSHIP BOOM

By MICHAEL KNIGHT

Monday, Sept. 15, 2008 was a bad day for motorsports.

A very bad day.

That’s when the cash well that fuels drag – and all other types of racing -- officially went dry. At least for the foreseeable future.

The fundamental underpinnings of Wall Street were so shaken by the collapse of Lehmen Bros., bailout of AIG and overall lack of confidence in the system, well, you’d have thought 1,000 dragsters had zoomed past the New York Stock Exchange.

Billionaire investor Warren Buffett called it an “economic Pearl Harbor.”  

Others said it was the financial world’s Sept. 11.

In a number symbolically significant to every racer, the New York Post reported that, in the aftermath, the market was “500 trades away from Armageddon.”
So here’s the new reality: Brian France, Tony George and Tom Compton are no longer the most important men in racing. Henry Paulson and Ben Bernanke are.

The Treasury secretary and Federal Reserve chairman have been injecting more money into the markets than nitro into Tony Schumacher’s engine in an attempt to keep the economic wheels turning. While the health of the speed industry is far from their highest priority, the success – or failure – of Paulson’s and Bernanke’s efforts will determine whether throttles stay flat, or flat-line.
Team owners – whose own net worths likely have plunged like cliff divers in Acapulco -- have discovered just hanging on to existing sponsors is tougher than beating Schumacher for the Powerade championship. Kenny Bernstein will toast his 30^th consecutive season with Budweiser in 2009, but I understand the actual scope of that great promotional opportunity is on hold, pending a budget review as InBev takes over Anheuser-Busch.

As for signing new sponsors? To quote Al Michaels: Do you believe in miracles?

“The economy stinks,” five-time Top Fuel champion and businessman Joe Amato said recently. “People are cutting back all around. I don’t care if you have a good story or not, it’s hard to get people to throw millions of dollars at sponsorship . . . I know people who have parked (their race cars) because they can’t afford the gas and the hotel bills. Forget what it costs to run the car.”

While we’ve been down this road before, Gary Scelzi said of his decision to stop after Pomona: “With the economy in the state that it is, business being off in these tough times . . . I feel it is in my best interest . . . to go back to work at Scelzi Enterprises.”

The economic downturn comes as competitors continue to struggle with issues ranging from safety to the price of nitro. Plus, those accustomed to winning Wallys in Top Fuel and Funny Car will have to spend against Alan Johnson and His Highness Sheikh Khalid Bin Hamad Al Thani’s Qatar petro-dollars.

Al-Anabi Racing could do to NHRA what Toyota did in NASCAR. Overnight, it became more expensive for everyone else to compete.

Now, there’s even greater pressure on NHRA and the agencies it hired earlier this year to sell sponsorships and generate national media attention. More than before, they need to produce additional revenues for the teams, and make the series increasingly valuable to corporate customers.

And Full Throttle, which takes over from Powerade, better live up to its promise to more aggressively activate its title role and promote drag racing with, well, energy. 

Follow Michael Knight on Twitter: @SpinDoctor500

(as published on DragRacingOnline.com, October 2008.)