NASCAR can learn something from F1's barely-avoided financial crisis
The two biggest racing series in the world, Formula 1 and NASCAR, don't have much in common. NASCAR's big, bulky stock cars pale in comparison to F1's open-wheel marvels of engineering precision, with the wind tunnel meaning just as much to a team's finish as the driver in the cockpit. With side-by-side racing difficult in F1, there are more lead changes in one stock car race than there are in one-third of an F1 season.
But off the track, the two series share a common bond of multi-car team organizations that threaten to dominate their sport. It's a hot-button issue in a tough economy, and NASCAR should take note of the tumult that swept F1 this month.
This week's agreement by FOTA and the FIA to come together for the 2010 season not only preserved the future of the open-wheel series but also allowed for an important measure: cost-cutting. For the first time, the series' biggest organizations -- Ferrari, McLaren and Toyota among them -- came together on a plan to curb spending. Sure, it wasn't exactly what FIA President
Three new teams will still be entering the sport next year, and now the cost of staying involved will be low enough to keep the old ones from dipping in the red. That means while other series are struggling to attract new owners to the grid, the F1 series will actually expand next year by as many as half-a-dozen cars.
What does all that have to do with NASCAR? While series head
Solving the problem is difficult, but to make the playing field more cost-effective you have to find a way to make the big teams stop spending. A top-level Cup team these days has costs around $25 million per car, money not many people have when both manufacturer and sponsorship money is drying up. Yet when money is tight, the old saying rings true: "To the victors go the spoils." With the cost of competition going up each year, the bigger organizations can't stand pat with the sponsors they already have; rather, they're forced to add new ones in order to offset higher expenses.
Just look at the No. 17 of
What's interesting about that example is two of the sponsors listed (USG and R & L Carriers) came into the sport supporting smaller organizations that no longer exist. As the balance of power shifted, these sponsors jumped ship and aligned themselves with surefire exposure -- the coverage that comes from the sport's top teams -- while leaving one less financial piece of the puzzle out there for new owners looking to develop into contenders.
Now, with the manufacturer cutbacks, that cycle of gobbling up the smaller sponsors is only going to get worse. Teams like Richard Childress Racing are set to lose as much as $10 million next season from GM's recent struggles, leaving them in desperate need of additional financial support.
Of course, both teams wouldn't need that money if the cost of competition went down by $10 million. But how does the cycle of spending stop?
NASCAR is looking at several options -- crate engines appear to be one likely solution -- but nothing that's a permanent answer. To solve this problem it may take a group effort the likes of which the sport has never seen before. NASCAR just had a town hall meeting with all of its participants -- perhaps it's time for a second one with just the sport's multi-car giants in the room.
With all due respect to