Global crisis threatens NASCAR

The sport needs sponsors willing to shell out millions in order to keep cars on the track

CHARLOTTE -- The phone rang off the hook at Hendrick Motorsports in June 2007 as prospective sponsors lined up to spend their money on Dale Earnhardt Jr., NASCAR's most popular driver, who had just signed a five-year contract with the team.

"We want in, and we know it's going to be expensive," was the message Hendrick heard over and over. Mountain Dew's AMP Energy and the Army National Guard ultimately teamed to pay the tab, estimated to be at least $30 million annually.

A mere 15 months later, the calls from sponsors aren't coming in as regularly to shops all across NASCAR. The weakening economy has made funding difficult to come by, and the financial meltdown has put once-solid teams on perilous ground.

"It's a scary time right now," said driver Jeff Gordon. "We see strong teams struggling to get sponsorship."

Two-time champion Tony Stewart learned just how scary when he decided in June to leave Joe Gibbs Racing's successful three-car operation to run his own team.

Stewart pulled in split sponsorship from Old Spice and Office Depot for his car, but he had to work to find funding for teammate Ryan Newman. He announced last week the U.S. Army signed a one-year deal to sponsor 23 races next season for Newman -- winner of the Daytona 500 -- but he still has 13 races to sell.

"I feel like with the economy, the way it is right now, we're right in line with where we need to be," Stewart said. "It's more important to take the extra time and get the right people than to just get people."

As companies tighten their belts or even fail, sponsorship money that once flowed freely to all sports teams and leagues is in danger of drying up. And it's auto racing that could suffer the most, said Craig Depken, an economics professor at UNC-Charlotte who specializes in sports.

"It's primarily driven by the sponsors," Depken said, "and not just NASCAR. It's just about every motor sport there is."

With sinking auto showroom sales, declining attendance and rising operating costs, no form of motor sports is safe -- not even the glamorous, globe-trotting Formula One Series. The Canadian Grand Prix was dropped from the 2009 schedule, leaving no races in North America, and Max Mosley, head of F1's governing body, warned that the whole series could be in peril if drastic cost reductions are not made within two years.

The soft economy already is affecting several teams in NASCAR, which is built around independent car owners who rely heavily on sponsorship to pay the bills. A collapsing economy could destroy it.

Operating costs are at an all-time high, and NASCAR's current business model calls for sponsorships to make up at least 75 percent of its budget.

A decade ago, a top-name sponsor spent about $4.5 million. Today, it varies between $25 million -- what Aflac Insurance reportedly will pay for sponsoring Carl Edwards next season -- and the $30 million-plus that's on Earnhardt's car.