David Ragan has no problem impressing a car owner, especially after winning at Daytona International Speedway last July. But car owners don’t do the hiring in NASCAR during this current economic environment. That job belongs to sponsors.
Ragan is like so many other out-of-work drivers right now, talking to anyone who’ll listen to his sales pitch. His schedule is filled with board rooms with hopes of convincing them racing is the best way to spend their advertising dollars.
The sluggish economy has put a premium on matching drivers perfectly to a company. While winning is the ultimate goal by everyone, Corporate America measures its success by increased sales, not checkered flags.
As companies keep a closer eye on their bottom lines, many now are scared away by sticker shock. It generally takes about $15 million a year to be competitive.
But it doesn’t stop Ragan from trying.
“We’ve got a lot of irons in the fire,” he said. “It’s just a matter of which one materializes. We’ve got a lot of meetings with a lot of companies. It’s just a matter of find some sponsorship.”
The search for funding has forced teams to change their approaches, especially in a nervous financial climate.
“I think everybody’s business model changed a couple of years ago and we’re all having to adjust to it but at RCR (Richard Childress Racing) we’ve been very fortunate, we’ve been able to resign sponsors, be able to have really good corporate interest,” car owner Richard Childress said.
At the same time, Childress was forced to drop one of his Sprint Cup Series teams after he couldn’t find sponsorship. Although he had a commitment of nearly $13 million from one company, it wasn’t enough so he shut the team down.
“Well, we all have to adjust to the model,” Childress said. “It’s just a matter if you’ve got x-dollars to race with you have to figure out how to race with it and NASCAR understands the challenges that’s out there today for the teams and they’re going to do what they can to make their adjustments as well.”
Ragan’s No. 6 Ford likely will be scuttled next year by a lack of sponsorship – if he can’t land a deal in the next couple weeks.
In the past year, Home Depot, UPS, General Mills, DeWalt and DuPont have scaled back their support. Red Bull and Crown Royal have left the sport.
NASCAR chairman Brian France admits the sport faces some serious financial issues, and like everyone else he’s not sure where to find the answer.