Cashed Out

Unpublished

Four stories, four differing perspectives of how the economic environment has changed NASCAR

<p> Four stories, four differing perspectives of how the economic environment has changed NASCAR</p>

In celebration of Athlon Sports' upcoming 10th annual Racing magazine, we've dug into the archives to uncover some of the most memorable features, profiles and Q&As that have graced our pages. Visit the site daily for more retrospective looks at NASCAR throughout the decade.

Article originally published in 2011 Athlon Sports Racing annual

— by Tom Bowles

For the better part of half a decade, critics have beaten up NASCAR like prizefighters boxing for the heavyweight belt of Who Killed The Fastest Growing Sport In America. The stories of sorrow may change, but the punch-throwing theme remains the same: An uppercut of negativity surrounding declining attendance and decreasing revenue, the sanctioning body going from unparalleled growth to an open-heart wound for seemingly everyone but itself to see.

Now, after a tumultuous 2010, even the sport’s top officials can’t hide behind a torrent of ugly statistics. Television ratings, trailing off since the last contract began in 2007, entered a freefall that peaked during the playoffs when five of the 10 Chase races had fewer viewers than Danica Patrick’s debut in the Nationwide Series last February. Even the Homestead finale, in which three men entered neck-and-neck for the championship, was down eight percent from the 2009 numbers, the capper to a year that began with the lowest Daytona 500 rating since 1991. Apathy wasn’t just limited to couch potatoes; the France-controlled International Speedway Corporation, owning over half the Cup schedule and tracks, saw an 18.7 percent drop in ticket revenue in the third quarter of last season alone.

You hear the stats, look at a list of teams laying people off and you’d think NASCAR was on its deathbed. That’s somewhat deceiving. Like with any business, there are peaks and valleys, but keep in mind that there are still some very good things happening in the sport. Sponsorship deals remain in the $20-$30 million range for top teams, and a national television contract for all 36 races is in place through the end of 2014.

Clearly, though, valleys can only last for so long before panic sets in. A reversal of fortune is needed in 2011 more than ever, with anxious executives from sponsors to manufacturers looking for positive signs upon which to build. But can it be fixed? How much do they need to? And why did it get to this point, just five years after a ratings peak had the NFL looking over its shoulder for the first time in a generation?

Finding that answer means going beyond the political correctness of Daytona Beach, peeking outside the box at the sport’s once-boisterous middle class. After all, those in the best position to advocate for change are the ones whose blood, sweat and tears of the past have been most directly affected by failure in the present.

Four stories. Four chapters that weave together to identify clues on problems, solutions, and whether successes will strike NASCAR once again.

From single-car powerhouse to praying for sponsorship
Twenty-seven years ago, good friends Tim Morgan and Larry McClure came to the Cup Series for what would be an unthinkable purpose today: They needed a hobby.

“When Morgan-McClure began, Tim and I just did it just to have fun,” says McClure, whose No. 4 car started off slowly, not running full-time until 1988. “We were doing it small-scale, weren’t even looking at (the sport) nationally and what it was doing.”

The 1990s changed all that. An upset winner in the 1991 Daytona 500 with Ernie Irvan, the duo won the Great American Race twice more, in ’94 and ’95 with Sterling Marlin. Marlin peaked at third in the standings in ’95, and suddenly, this “fun” outfit had become a force in NASCAR.

“It took our hats off,” says McClure. “We thought, man, we had arrived in the biggest sport, and we don’t see an end to it. We just thought it was going to continue to grow.”

It did. Just not for them. Beginning in the late 1990s, multi-car teams, which had always been around to challenge Morgan-McClure Motorsports, suddenly began to emerge as powerhouses.

“When there were two-car teams like Junior Johnson did (in the 1980s), there was tremendous competition within them,” explains McClure. “There were these big egos. They didn’t want to share information.

“So the foot came down, and the manufacturers got more involved. All of a sudden, (multi-car teams shared) a lot of information. They started trying to make the cars exactly equal, the engines exactly equal.”

That philosophy shift took its toll. By 1998, Roush Racing had five cars, while three-car Hendrick Motorsports captured four straight championships with Jeff Gordon and Terry Labonte. That was also the last year Morgan-McClure finished in the top 10 in points, with expansion plans falling short as a hardworking single-car shoestring gradually saw economic disadvantages and manufacturer preferences outweigh its effort.

“Around 2001, 2002 the money was killing us,” adds McClure. “It all was about money. Then, they let Toyota in, and their money separated the teams even further, made it even more of a corporate, three-team, four-team entourage.”

“What you have now is you’ve got two or three teams and, maybe, you have a two-car team that’s really just an extension of somebody’s four-car team,” Morgan says. “So if you have 10 cars out there that are affiliated, do you think as a fan it’s reasonable to assume that those cars are going to compete with each other as aggressively?”

Still, despite a lack of regulation — NASCAR didn’t step in with a four-car limit per owner until 2009 — both men refuse to place blame.

“They played the game by the rules that were there,” says Morgan. “And we played the game by the old rules. We don’t feel like, even today, they did a better job racing than we did. We feel like they did a better job marketing than we did. And we should have woken up to that earlier.”

Oversleeping proved costly. Losing Kodak to one of the multi-car giants (Penske Racing) in 2004, the advent of the Chase, and some new qualifying rules created an environment that crippled a team that never found replacement funding.

“During that Chase period, if you’re working hard to get a sponsor and you’re a team that shouldn’t finish 15th and you finish 15th, you’re not even mentioned (in the press),” Morgan explains. “(The Chase) takes away from the overall effectiveness of the sponsorship of anybody outside that group. They’ve basically just become ghosts during that period. They’re not even noticed. That’s a bigger issue than (officials) realize.”

“We’ve got to have the last-place car just like we have the first-place car,” adds ­McClure. “I think that’s the thing we’ve forgotten about — the whole field is important in NASCAR.”

That’s where even the top 35 “locked in” rule can be crippling, creating inequality within a 43-car field composed of those coming to race and others simply trying to make the field.

“You don’t have the fastest cars necessarily racing,” adds Morgan. “That encourages mediocrity. Once you get in the points, you’re paid mostly just to sit there and coast since you don’t take chances to get out.

“The old system, if teams did so poorly they couldn’t qualify week after week, then they got in trouble with their sponsor. But it should be that way. I think the way the system was set up was very fair.”

Instead, a tornado was unleashed, the perfect storm that left MMM damaged in its wake. Once a wonderful story, Morgan and McClure now sit and wonder how they wound up on the outside looking in.

“It’s hard to (place) blame,” says Morgan. “This thing moved so fast, the corporate money came in there and NASCAR was growing at the same time. It was hard for them to control their growth and keep perspective. They worked hard, made some good decisions. But I guess maybe sometimes you gotta revamp.”

The owner pauses. He knows revamping is the only way to get the No. 4 back on track, change needed to bring a car that’s been dormant from full-time competition since the end of 2007 — even with $37 million in career prize money to his name.

Development in the unemployment line ... not on the track
J.J. Yeley’s been on both sides of the seesaw. Brought up as a Joe Gibbs Racing prospect, he made his name by taking the No. 18 Interstate Batteries Chevy from Bobby Labonte’s hands in 2006. It was the break of a lifetime, one the USAC Silver Crown Champion never fully realized until stepping foot on the sport’s hallowed grounds of Daytona.

“Seeing so many fans, that’s the biggest thing,” he remembers of the 150,000 in the stands. “My wife and I were completely wowed at just how friendly NASCAR was.”

That era of good feelings extended inside the garage. Overshadowed by fellow youngster Denny Hamlin, Yeley got released after just two seasons at JGR. But back then, it was a driver’s market, owners banging down doors and throwing money at any type of experience. Six career top-10 finishes? That’s six more than Yeley needed to continue full-time.

“It made me feel good there were a lot of opportunities,” he says. “I went with what I thought was going to be the best position.”

It wasn’t. Hall of Fame Racing was a struggling single-car effort, without the resources or funding to be successful. In only nine months, Yeley got booted into a shockingly different world.

“In 2008 and 2009, it really surprised everyone that money all of a sudden got really tight,” says Yeley, now 34 and backed into a corner for two-plus seasons to start-and-park or retire from stock car racing in his prime. “There was nothing available. And there really hasn’t been a whole lot available since.”

So Yeley sits on the other side of the garage, racing mostly with teams that typically run 30th or 35th on a day when they run the distance at all.

“From a sponsor that understands the sport, they know there’s a chance they may not ever get seen,” he says. “To me, TV has been the downturn because if you’re at a racetrack, there’s racing going on all over the place. It may not be for the lead, but it’s usually 10th-15th, 15th-20th, there’s five to six cars throughout just racing their tails off. But on TV, you don’t always see that.”

The timing of Yeley’s career unraveling also coincided with the economic crash. The nation’s worst recession in 70 years caused the bankruptcy of General Motors and Chrysler, unemployment rates of over 20 percent in regions close to several racetracks (Michigan, Martinsville for starters) and forced companies to roll back their advertising. For Yeley, it’s a factor that can’t be understated — fans and sponsors staying home simply because they don’t have any cash.

“You don’t have families that can afford it,” he claims. “It’s going to take awhile for those fans to afford to come back. NASCAR just has to get a little more creative with what they’re doing at the tracks because there’s not as many dollars out there being spent.”

From sold-out crowds to empty seats. What gives?
That’s where Pocono track President Brandon Igdalsky comes in. The grandson of founder Joe Mattioli, he started out collecting trash as a teen during the sport’s early growth spurt in the 1980s. Managing the track’s concession stands a decade later, one of the sport’s most powerful young business executives saw firsthand just how much the fans were overwhelming a 2.5-mile, triangular-shaped facility that’s held two spots on the Cup Series schedule since 1982.

“It was a crazy time,” he says. “When we put the new backhouses for concessions in behind the grandstands (during the late 1990s), we had to call in more beer that first year. Our beer sales almost tripled.

“For awhile there, it was almost like Field of Dreams. If you built it, they would come. Tracks didn’t have to sell tickets. They just took orders.”

The peak for the Northeast Pennsylvania facility occurred at the close of the 20th Century. A flurry of great races, punctuated by Jeremy Mayfield bumping Dale Earnhardt on the last lap to win the June 2000 event, left the facility forced to do the unthinkable — actively advertise for fans to stay away.

“In ’99, I remember my grandfather put an article in the paper telling people if you don’t have a ticket, don’t come,” he says. The fans who came empty-handed would have to wait eight hours in misery outside, as the rural area was one-way in, one-way out on race day. “We had no room.”

Ten years later, the track can only wish for the glory days. Igdalsky admits that they “came close to selling out” last in 2002-03 before the numbers began a slow but steady slide downhill. Specific figures are hard to come by — official attendance stats through NASCAR have listed 105,000 for four years, but a local paper, the Pocono Record, did an estimate based on aerial photographs and crowd-counting techniques that put that number at 48,000 last August. How do they move forward?

“None of our fans are saying ticket prices are an issue (for 2011), so we’re happy about that,” he explains, somewhat contradicting Yeley. “It’s not just a matter of putting on a race anymore. They want more bang for their buck. And rightly so. It’s a different world, a different time right now. People want the most quality for each dollar they’re spending.”

So Pocono has focused its promotional efforts on other parts of the experience — beautiful, year-round lodging facilities adjacent to the track and a 25-acre solar farm. Also, track ownership is reviewing plans to build additional entertainment nearby.

“The product at the track this year was unbelievable. It was one of the best years I remember in a long time in terms of the on-track races, the experience,” he says. “I think like in any business, there’s dips and valleys. Right now, we’re on the way back up from the dip. I definitely see things turning around.”

The sponsorship struggle
In a sport held together by Fortune 500 support, the key to sustaining any upward trend is convincing companies to keep spending money. That’s where Bob Jackson comes in. Jackson is a marketing exec whose client list has included Joe Gibbs, Dale Earnhardt Jr. and Boris Said, but whose 27-year background mostly involves that elephant NASCAR wishes would go back to the zoo — the NFL. What’s the difference between the two?

“Parity,” says Jackson. “So many times, you see a team that is 4–12 in one year, then making the playoffs the next. That happens a lot.

“In NASCAR, to me, it seems like you know who’s going to be the top 10 or 12. There’s going to be cars who come in and get a top 10 every now and then, but I feel like it’s the haves and the have nots. It’s just hard to compete with the big boys if you’re an independent.”

The stats bear that out, as just 35 drivers with only 10 different chassis/engine combinations cracked the top 10 last season in Cup. Compare that to 45 drivers and around two dozen combinations from 2001, and an ugly trend leaves sponsors unwilling to take a chance at new opportunities.

“I’d like to see everybody be competitive out there. But there’s four or so big players in the NASCAR game, then everybody else,” he says. “I have to look out for what’s best for the sponsor, because they are too hard to find to put them into something that’s not going to work. Every one of them wants something that can be measured. Every one of them wants to see what their return on their investment is.

“Win on Sunday. Sell sponsors on Monday. That’s the way to do it.”

Those problems create a trickle-down effect, as young Nationwide Series drivers have struggled to stay in seats, while Cup driver infiltration takes its toll. Jackson is working hard for a number of teenage phenoms to acquire the opportunities they need. The problem is, with no owners and sponsors taking risks, there’s no money to give them the long-term chance needed for success.

“Unless you’re one of the lucky ones,” he says, “like a Joey Logano that gets handpicked by one of the top teams, how are you going to break in and really show how well you can do if your only choice is to go with an underfunded independent? It’s tough. It’s really tough.”

Jackson sighs. He can’t make a convincing argument alone.

Solutions and conclusions
Four stories, four differing perspectives. Yet these men stand together in identifying common concerns more than they would have guessed.

“Back in the day, we had personalities,” McClure says. “Everybody sounded different and talked different, acted different, came from small towns. Then, it changed to the corporate world, and it appeared to be all about money and not so much the competition.”

“‘Boys, have at it to a different level’ is what I’d push,” says Igdalsky, referring to NASCAR’s 2010 “edict” of laying off punishments for on- and off-track conduct. “Give the guys a little more freedom, and let ’em have a little bit more fun out there.”

But even the best-laid plans nowadays seemingly come down to money. The smartest, most flamboyant driver is handicapped if his car doesn’t have the parts and pieces to compete.

“Sometimes, NASCAR these days reminds me of Major League Baseball that doesn’t have a salary cap,” adds Jackson, whose answers lie in marketing parity. “It’s like the Yankees and Red Sox against the Kansas City Royals. But how do you tell a Rick Hendrick or a Jack Roush, that’s built their team up so beautifully, ‘OK, you have to cut it in half now’? You just can’t do that, can you?”

Sounds like a job for a young, up-and-coming leader, a behind-the-scenes stalwart capable of being Brian France’s right-hand man. In other sports, now’s the time when the charismatic leader emerges, saving everyone from their own excess in reestablishing structure and success before it’s too late. Yet not one of these men has a young star who comes to mind.

“I don’t know who’s going to take it to that next level,” says McClure. “But we’re going to go through a lot of changes. Bill’s (France’s) children are, certainly, super intelligent. And hopefully capable.”

Looks like they’ll need to be. There’s nowhere else to turn — more than ever France’s leadership stands out as the key to keeping all of these different problems from sinking the sport.

Otherwise, each one of these stories is destined for an unhappy ending, a parking lot of faltering dreams in a sport that once thrived on making dreams come true.

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