A year ago, NASCAR entered its awards celebration week without a sponsor for the NASCAR Cup Series.
It left with one in Monster Energy, creating optimism amid questions about the sport’s health.
A year later, not much has changed.
As NASCAR heads to Las Vegas for another awards week, the pulse in the garage continues to flow with concern on the economic well-being of the industry amid many hurdles, including uncertainty with the series’ biggest sponsorship.
Monster Energy has not yet announced whether it would pick up the option to sponsor the series for 2019-20, a decision that needs to be made soon if NASCAR has to find another new sponsor for 2019.
While Brian France said he is happy with the sponsorship, it would seem that if all sides were happy, this decision already would have been a no-brainer. Monster Energy’s sports marketing executive declined to answer questions at Homestead about any upcoming decision.
Monster had a footprint at some races, including some impressive displays and extreme athlete performances. It brought MMA fights to select tracks. Other times, it didn’t do all that much.
A brand that relishes being disruptive, it often shuns traditional marketing avenues (such as television advertising and signage). It has yet to use NASCAR drivers the way it uses other athletes as the NASCAR season is so long, they haven’t had much time to appear at Monster events.
The reported low price for the deal — $20 million, maybe a little bit more — also hurt as far as optics to team sponsors. Why should a sponsor shell out possibly more for a full season with one team if it could have its whole name on the series? Granted, team sponsorship delivers different benefits, but it just created another hurdle.
Sponsorship in the sport as a whole is a mixed bag. Longtime major companies such as Target, Farmers Insurance and Great Clips have ended sponsorship deals. MillerCoors cut back on its investment with Team Penske, and Subway so far hasn’t announced if it would return after bolting from Daniel Suarez, supposedly over his handing out doughnuts as part of an NBC prerace segment at New Hampshire.
Some companies, such as Credit One, have increased investment. But at least a third of the top 30 cars from 2017 still seek significant sponsorship for next season. Drivers such as Matt Kenseth and Danica Patrick wanted to continue racing and couldn’t land deals despite one making the playoffs and being a past Cup champion and the other being the only female in the sport.
NASCAR must find ways to increase sponsor value or create a system where the purse money covers enough to pay a decent salary for a driver and a team to remain competitive.
After the Daytona 500 (Patrick’s last NASCAR race), NASCAR will have lost several of its most popular drivers over the last three years: Jeff Gordon, Tony Stewart, Carl Edwards, Kenseth, Patrick … and, of course, Dale Earnhardt Jr., whose last Cup race came at Homestead.
While France indicated that 22 of the races didn’t decline in attendance, the public companies, whose bulk of revenues come from NASCAR races, show their admissions revenues had dropped 3.6-4.6 percent (depending on how one reads the reports) in the regular season and track operator ISC reported that through 25 races, viewership is down 10 percent.
Despite claims that these declines are cyclical, NASCAR is headed for its 10th consecutive season of admissions revenue declines, according to the public companies annual reports.
NASCAR hopes other data will encourage sponsors: It was one of the top-two sports shows on 22 of its race weekends. Its social engagement has risen 32 percent year over year.
NASCAR believes it has a crop of young talent. But the question is will talent be enough? Will good racing even be enough?
The biggest challenge for NASCAR remains energizing the fan base, creating an atmosphere where fans not only want to watch these drivers but feel such a connection that given the chance, they’d want to go have a beer with them as well.
Ryan Blaney, whose NASCAR podcast and social media video of his home after his first win showed off some impressive tattoos and empty beer cans, could resonate with fans. Darrell “bubba” Wallace Jr. next year will become the first full-time African-American driver since 1970 in Cup. Chase Elliott has the Elliott family fan base as well as the sympathy vote as a driver who has seven runnerup finishes with no wins. Kyle Larson owns the Stewart-esque “race anything, anytime, anywhere” persona. Hendrick youngsters William Byron and Alex Bowman, as well as Joe Gibbs Racing’s Erik Jones, have an opportunity to build fan bases.
Hurdles remain as many of these drivers never built local fan bases as their rise to NASCAR’s top level consisted more of racing in regional series instead of weekly at a short track. Of NASCAR’s best races this year, if one believes a non-scientific Twitter poll of Jeff Gluck’s followers, few came at 1.5-mile tracks that dominate the schedule. But in another Gluck survey, 76 percent of people enjoyed the 2017 season.
NASCAR’s plan includes increasing the number of weekends where the NASCAR Cup drivers are only on the track Saturday and Sunday. They hope to combine that with more interactive activities for the drivers with the fans, hoping that something different resonates with the fan base. The jury is still out whether that will be successful in the majority of markets and whether it would have a negative impact on a track’s bottom line, specifically the number of people who camp during the weekend, or on sponsorship if companies feel that less time on track (and potentially less traditional and social media chatter) hurts their return on investment.
NASCAR has tried to cut costs for teams in addition to shorter weekends. On Wednesday, NASCAR announced it would cut the number of over-the-wall crew members. Whether it makes pit road safer, as NASCAR says, is to be determined. Having 40 fewer people on pit road certainly sounds safer, but if a tire carrier now carrying two tires results in more uncontrolled tires or if more crewmen suffer injuries from trying to do more, that could make it just as dangerous.
Teams certainly will save money. Six-figure salaries, uniform costs, administrative costs, travel costs and taxes could make it worth $200,000 or more a person.
The change meets one of NASCAR’s goals — to find ways to cut costs without impacting competition (this would impact all equally) and in a way that fans for the most part won’t notice. They’ll still see pit stops, just maybe they will be a little slower.
Those pit stops could come with the teams using a pit gun leased from NASCAR at a rate that would be much less than the spending seven-figures in engineering newer, faster pit guns. Again, few fans would notice the difference except to see which tire changers have the best skill and not the best tool.
It goes back to whether cutting costs alone will help the sport. As long as sponsorship still is a higher percentage of revenue than purse money, teams are going to need more sponsorship to survive.
Sponsorship often requires confidence in the sport, where it’s going and its leadership. It’s why NASCAR tries to paint a picture of growth and doesn’t want to acknowledge specific challenges publicly. Any mention of the challenges could turn into a storyline of admittance that things aren’t all that rosy and put sponsorship into question.
But people know what they see. They see Kenseth and Patrick without rides, teams such as Stewart-Haas Racing and Richard Childress Racing still looking for sponsorship to fill seats, and they can see the empty grandstands at some tracks. They can see that the charter system, designed in part to increase investment in the sport, hasn’t had that effect in the three years since it was implemented.
And they can see the biggest NASCAR sponsorship, from Monster Energy, not giving any indication if its “fun” with NASCAR will continue.
NASCAR deserves credit for making changes quicker than it has in the past. But change is tough, and it’s tougher amid an atmosphere where several forks appear in the road, and several opinions of the path, all of which contain hills.
So off to Vegas the sport goes, appropriately enough. Every few blocks, visitors can enter into lands of mixed make believe and reality. Whether they leave up or down or even depends on how they roll the dice.