Race Weekend Central

Did You Notice?: Even Hendrick Motorsports Navigating NASCAR’s Sponsor Challenges

Did You Notice? … The number of races where major NASCAR teams have needed primary sponsorship this year? A glance at several of the top programs shows that even some of the most valuable NASCAR ownership groups, according to Forbes have used either manufacturer backing or their own businesses as major sponsors.

Perhaps the most notable example is Stewart-Haas Racing, the four-car Ford team who’s needed two cars’ worth of primary sponsorship at times with Danica Patrick’s largest backer, Nature’s Bakery, restructuring its deal. But virtually everyone (with a few notable exceptions) have had to dig into their pockets at some point this season.

Let’s take a closer look.

Stewart-Haas Racing

This group has endured the largest set of sponsor issues. Only Kevin Harvick out of the four-car program has primary sponsorship secured for not only this year but 2018 as well.

The lawsuit between SHR and Nature’s Bakery is well documented; in the end, its restructuring to just four races as primary sponsor left Danica Patrick’s No. 10 car millions in the hole. So far, the team hasn’t gone a race unsponsored with Aspen Dental on the hood for 11 of 22 races thus far. But you wonder how much more SHR was able to squeeze out of that contract; their agreement was originally for just four events.

Clint Bowyer, meanwhile has gone the year with only a variety of 2-3 race deals. Co-owner Gene Haas’ company, Haas Automation, has been on the car for 12 of 22 races. Other than Watkins Glen, where Five Star Urgent Care made its debut on his Ford the other sponsors have been smaller, existing deals within SHR. Mobil 1, for example, decided to spread their money among all four cars in the organization rather than back one driver. They’ve been on the car four times while Nature’s Bakery, re: the settlement with Danica has been on twice.

Then there’s Kurt Busch, whose Monster Energy deal only covers half the season. Haas Automation fills out the rest as Gene Haas continues to fulfill his pledge to get the best talent regardless of personal cost.

Looking ahead to 2018, SHR may have more races to fill. Monster’s contract remains uncertain as they’re already the presenting sponsor for the Cup Series. Patrick has made clear over the past few weeks her patchwork situation after the Nature’s Bakery fallout won’t be enough for the No. 10 car; she needs more.

At the same time, there’s a reason why veterans like Kasey Kahne and Matt Kenseth could end up here. Haas, along with co-owner Tony Stewart has shown a willingness to be the one top-tier team that will pay for talent regardless of sponsorship. With Busch as a template, that bodes well if these veterans remain available but don’t come with money. On the flip side, the team turned down Busch’s option to “negotiate a long-term deal.” If Busch winds up out of their price range does that mean the lack of sponsorship is finally making Haas close his wallet?

Joe Gibbs Racing

It’s a mixed review here. Denny Hamlin and Kyle Busch remain fully sponsored with comfortable deals from FedEx and M&M’s, respectively. Those contracts, some of the largest in the sport cover all but a handful of races. Longtime backers Sport Clips and Interstate Batteries fill out the rest for those cars.

Daniel Suarez, with long-term backing from Arris also appears comfortable over the long-term. Stanley and Subway Restaurants fill out his No. 19 Toyota for all 36 races.

The problem, then came with Matt Kenseth, whose longtime backer Dollar General bailed after the 2016 season. Kenseth has needed ToyotaCare, manufacturer money to fill the void in four races thus far; more coverage is needed. The 45-year-old, near the end of his career may have the talent but is not as attractive in the boardroom as 21-year-old Erik Jones. Guess who’s got the No. 20 ride for 2018? Toyota, already potentially on the hook to help keep the No. 77 afloat for Furniture Row Racing next year is only willing to do so much.

Hendrick Motorsports

HMS, the most valuable team entering the year (according to Forbes, they’re worth $350 million) has been able to remain stable. Jimmie Johnson’s Lowe’s deal was for all 36 races and the company is signed again through 2018. Chase Elliott and Dale Earnhardt Jr., the sport’s Most Popular Driver have some of the highest sponsorship value in the sport.

The trouble has come in the form of Kasey Kahne’s No. 5 car for the future, not the present. Farmers Insurance and Great Clips, two companies that fill 22 races as a primary sponsor won’t be back in 2018. Patchwork deals fill the rest of the schedule but none were stepping up to back him on a more full-time basis.

That could be the reason HMS went to teenager William Byron to drive the No. 5 car even though owner Rick Hendrick seemed reluctant earlier this season. Remember, Elliott spent two years running XFINITY even though he was a championship-caliber driver. Hendrick likes to cultivate young talent, utilizing its relative stability rather than rush someone up too soon.

But consider how Byron comes up to the Cup Series: bringing sponsor Liberty University along with him. The press release Wednesday says Liberty and Axalta Coating Systems will cover a majority of races at the No. 5 car; we don’t know an exact number for the college but it’s clear it will be several races.

Let’s say Matt Kenseth was tabbed as a one-year replacement instead to give Byron some more time to develop. You think Liberty would have either A) backed Cup and XFINITY at the same time or B) wanted to build a branding campaign around a 45-year-old? There’s a hard truth in that.

So Hendrick would need to find sponsorship for Kenseth, a bit of a tall order considering the 2017 shortfall he’s currently experiencing at Joe Gibbs Racing. Considering the dramatic loss in deals, combined with further contracts expiring in 2018 (Alex Bowman is still an unproven commodity of sorts with Nationwide) and the financial risk was not worth taking. Sports is a business, after all….

We’ve talked about the sport’s three biggest teams but there are plenty more jostling with sponsorship concerns. Richard Childress Racing is losing Menards to the Wood Brothers and will need backing for its third car to continue full-time beyond this season. Chip Ganassi Racing is busy replacing Target for former point leader Kyle Larson in 2018. Roush Fenway Racing ran Ford EcoBoost once for two-time winner Ricky Stenhouse Jr. and Roush Performance Parts a handful of times for Trevor Bayne. But there’s one notable exception we haven’t mentioned…

Team Penske

Penske has two rock solid sponsorship deals in Shell/Pennzoil and Miller Lite. That allows them to fill in smaller deals here and there and remain financially stable for two championship-caliber teams: Joey Logano and Brad Keselowski. What sets those two drivers apart? Logano was once labeled the “best driver of the next generation” by Mark Martin and has already racked up 18 Cup Series wins by the age of 27.

Keselowski, for his part knows how to use social media better than anyone on the Cup circuit. That instant connection to fans also turns into a measurable return on investment for sponsors regardless of on-track performance. While he’s aging (33) that’s still within the coveted 18-34 market that makes advertisers drool.

It’s also put the team in position to expand the right way with Ryan Blaney. They’re in the perfect position to grow under the charter system rather than have the responsibility to keep up four cars.

That’s a closing thought in this sponsorship chase. For teams like Hendrick, folding a team just didn’t ever seem like a viable option. A $350 million outfit is going to go and lease/sell a charter where the going rate is $3-$4 million? That’s not enough to save employees in the shop when the cost of operating one of their top-tier outfits could be ten times that. No, it’s easier to keep the team going, swallow your pride and potentially take a lower-cost sponsor and lower-cost contract from a young kid trying to make it.

Such is the state of the sport in 2017.

Did You Notice? … Quick hits before taking off….

  • Kyle Larson is struggling. The man who’s led the point standings for the bulk of the year lost second place to Kyle Busch last week. Five runs outside the top 20 in the past seven races, paired with no wins is easily his worst stretch of the season. But keep in mind Jimmie Johnson suffered through similar bumps in the road over the summer en route to championships. The real gauge for Larson is Michigan this weekend, a track where he won in June after earning the pole. If the No. 42 team stumbles through a Sunday there, well… maybe there’s more reason to be concerned.
  • Along the same lines, Hendrick could see not one but two of their teams miss the playoffs. While Earnhardt is in a “must win” situation young Chase Elliott is now vulnerable enough that one bad run will knock him out in favor of Clint Bowyer. 10th and 13th the last two races may seem alright but with the way Bowyer’s running, it might not cut it.

 

 

 

About the author

Tom Bowles
 | Website

The author of Did You Notice? (Wednesdays) Tom spends his time overseeing Frontstretch’s 40+ staff members as its majority owner and Editor-in-Chief. Based outside Philadelphia, Bowles is a two-time Emmy winner in NASCAR television and has worked in racing production with FOX, TNT, and ESPN while appearing on-air for SIRIUS XM Radio and FOX Sports 1's former show, the Crowd Goes Wild. He most recently consulted with SRX Racing, helping manage cutting-edge technology and graphics that appeared on their CBS broadcasts during 2021 and 2022.

You can find Tom’s writing here, at CBSSports.com and Athlonsports.com, where he’s been an editorial consultant for the annual racing magazine for 15 years.

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12 Comments
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DoninAjax

So why does Hendrick need $40,000,000 for sponsorship for one car? To me that’s on him.

So a smaller team goes to a potential sponsor and says the car might qualify quicker than other cars but they’ll get to “race” and he won’t. And even if the car makes the event there’s a very good chance he won’t be mentioned at all during the broadcast. That’s on the TV networks who decide in the morning meeting what they’ll show during the event.

Then there’s Brian. He inherited on of the biggest companies in the US, SOLD HIS SHARES in the company and proceeded to obliviously “drive” it toward a cliff. Who will be the primary sponsor when Monster bails for the same reason as all the sponsors: not enough ROI.

DoninAjax

Should be “one of the biggest companies”.

Mike

If I were CEO of a smallish shop or a gazillionaire multinational, honestly, I’d be hard pressed to see the value added by nascar in its present form. A sponsor spends significant money on the car & then bzf/fox/nbc extort even more on top of that.

Back in the day when Benny, Ned, Buddy, et al would talk about the “Spacely Sprockets Chevy” or “Cogswell Cogs Ford” it was value added. All of this was prior to the super expansion of nascar out of Dixie. If my sprockets & cogs get no mentions, no air time, a diminishing crowd, a diminishing tv audience, & a culture that isn’t product loyal (think the Toyota tundra with the “3” sticker) it simply isn’t worth the capital investment.

DoninAjax

As Astro would probably say now, “Rots of ruck, Brian!”

kb

LOL……..

Bill B

Well at least the cat’s out of the bag now, NASCAR is ailing and currently contracting with respect to revenue and funding. We all knew that but the idiot in charge has maintained the spin to “remain calm, all is well”. While I hate to see the “used to be a sport” I love falling apart, it pleases me that it makes the emperor look like the fool that he is. Any other CEO would have been removed long ago but, as the saying goes, it’s good to be king.
The final blow will be either Monster not renewing at the end of next season or the networks drastically cutting their bids when the TV contracts come due next time. IMO NASCAR has no chance of turning the ship around until there is new leadership that is more interested in the long term health of the sport than the dollars they can suck out in the short run.

russ

Nascar has always been about spending somebody else’s money. Most if not all of the mega team owners could easily afford to campaign a car for a season. But of course they won’t, just like Nascar wants somebody else to pay the bills for the races it promotes.
The question is can this business model continue? How could it be changed, or adapted to todays reality? Guess we will see over the next few years.

Bubba

While your last two questions do need to be answered the rest of your post makes me wonder how long you’ve been following NASCAR ?

salb

I guess this is a prime example of bigger not always being better. They may have stopped testing to save money, but that just meant the $$ were spent on something else…more technology, more wind tunnel time, more engineers, fancier software and pull down rigs. In the end, is it more cost effective? There’s always some hot new thing that usually cost lots of $$ and requires specialists to run it. There has to be an end somewhere, and we may be witnessing it.

bud sudz

All the while, fans go from seeing 43 teams, to 49 teams, to 37 teams compete in a cup race.

kb

Wow, an effort from the writer…congrats. Good breakdown! Shocked. HOWEVER…for the sake of truth….”has already racked up 18 Cup Series wins by the age of 27″. Technically NO. He racked them up at 26 years of age. He has not won a race YET as a young 27 year old!!!! Just sayin and trying to keep it accurate as it so often is not. IMO!

The big picture of this article with my minor point, but a point none the less as these things seem to be circulated as truth…is how NASCAR is in trouble and they don’t have a freaking clue, or more importantly don’t care! WOW, just wow. Nothing new here, but in black and white…who at CASTLE DAYTONA is telling the EMPEROR WITH NO CLOTHES…THE TRUTH????????????? SOMEBODY MUST, or they will go down with ship with nothing to show for it. IMO.

Bubba

Is this you Joey ? ?

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