Did You Notice? … Monster Energy could be the last title sponsor in NASCAR Cup Series history? Tuesday’s one-year extension, through 2019 was huge for a sport that has been hemorrhaging corporate sponsorship at the team level. Adding Monster for one more year after months of indecision finally gives them some financial news to boast about.
ALLAWAY: MONSTER ENERGY EXTENSION DETAILS
But it’s what happens after next season that has everyone talking. NASCAR Chief Operating Officer Steve Phelps revealed the sport may forego title sponsorship in favor of a new model that heavily involves both teams and television partners.
“I wouldn’t suggest that entitlement is not working,” Phelps told Bob Pockrass of ESPN. “But we want to make sure our sport is as easy or easier to do business with.”
To a certain extent, that’s true. Title sponsorship has always been difficult considering the deals both NASCAR teams and tracks have with competing companies. The old Nextel deal, for example, wound up pushing out competing cell phone companies like AT&T and Verizon from team sponsorship. It’s difficult for the exclusivity contract to be enforced with so many different players at the table.
But I also think NASCAR knows the writing on the wall. While preventing a short-term catastrophe of the Monster deal falling through, 2020 and beyond has to produce a new business model for the sport.
It’s simple math. Companies are leaving teams, costs are still high and there’s no money being infused to replace them. It doesn’t matter how much title sponsorship the sport has if there are no cars on the grid capable of running competitively.
Building on a year of success, @MonsterEnergy and NASCAR announce partnership extension. pic.twitter.com/qlakUkTaSU
— NASCAR (@NASCAR) April 10, 2018
The BK Racing bankruptcy case is a recent example of the sport’s financial troubles. This backmarker team has lost $30 million in three years, entering Chapter 11 bankruptcy where it’s currently being run by a trustee. That’s despite collecting millions in NASCAR prize money and being vested in the sport’s charter system. All that cash, including $35 million of owner Ron Devine’s own money, was spent just for the team to finish around 30th place.
You can imagine, then, what the costs are for the sport’s top teams. Wind tunnel time, testing, engineering and aerodynamic fine-tuning add up. Sponsorship woes have finally hit the big teams like Hendrick Motorsports (losing Lowe’s after this season) where they can’t possibly find companies willing to keep up.
NASCAR must find a way to make owning a franchise profitable. We don’t have major financial losses within MLB, NFL or NBA ownership. The sport also has the cash to spread around to make this happen. A $440 million per year NASCAR TV deal with NBC alone combines with additional revenue from FOX ($300 million). There’s plenty of secondary sponsorship deals and revenue for both the sanctioning body and the tracks themselves. ISC, for example, produced over $670 million in revenue through the first 11 months of 2017.
Can everyone work together to share a piece of the pie? I’ll strike an optimistic tone here. Team owners (through the Race Team Alliance) have more direct, honest communication with NASCAR than ever before. Decisions like cost-cutting through smaller pit crews and the controversial pit guns came with their input.
Meanwhile, the Drivers Council gives the sport’s big names a direct line to top NASCAR officials. The nine-member council does a good job of keeping their peers informed while pushing major issues like safety and competition.
Even France himself is sharing power and resources these days with plenty of other names. They range from Phelps to NASCAR President Brent Dewar and Vice President of Racing Operations Steve O’Donnell.
Finally, the sport’s TV partners also have a financial reason to work things out. They can’t be happy with ratings that continue spiraling downward despite paying (at least in NBC’s case) over 40 percent more for this 10-year deal that began in 2015.
Getting all these people to agree is going to be tricky. But it’s possible. At least in the short-term, the sport can beat down the narrative of “the sky is falling” as a major company has finally sat there and said, “I’m going to keep investing.”
Did You Notice? … The potential for restrictor plates in the NASCAR All-Star Race next month? Rumors keep growing as the sport weighs trying the XFINITY Series package from last summer at Indianapolis on a larger scale.
Could the sport be two-for-two in 24 hours? It hasn’t happened often as of late. But this type of exhibition is exactly where you try this type of package. Let’s face it; the racing at the 1.5-mile Charlotte oval can’t get much worse. There’s a reason we’re using the road course in the fall; just two years ago, Martin Truex Jr. nearly led all 400 laps in the Coca-Cola 600.
The sport’s intermediate package continues to be its biggest concern long-term. Just this Sunday, Brad Keselowski was quoted the cars aren’t “meant to run side-by-side” on those types of ovals. Say what? You mean the best part of racing, the actual act of running two and three-wide at high speeds, is impossible to do? That’s a problem.
With that in mind, NASCAR is smart to try the idea of plates. It’ll come with its share of critics but if the race is competitive? People won’t care. After all, this race is for the fans, right? Why not try and put a better product out there?
Remember, that package comes with aero ducts and a taller rear spoiler, too. Those are crucial changes in car construction that can be tinkered with down the road. It’s good for the sport to try something rather than sit there and pretend intermediate track racing is going just fine.
Did You Notice? … Quick hits before we take off…
- Yes, NASCAR can make the pit guns better. I understand why crew chiefs are so upset. But there’s no denying the challenge those guns made Texas that much more interesting. I feel like there’s this push these days by both drivers and teams to make it a little too easy. If the cars are all the same speed, aren’t tough to drive and nothing ever breaks, wouldn’t racing become single-file driving on the highway? Racing involves risk; removing it risks killing the sport. NASCAR needs to rediscover where that fine line surrounding risk is and what’s acceptable for all involved.
- Jimmie Johnson has had horrible luck this season. But Texas should have been a big weekend for the No. 48. I think Dover in three weeks is a huge race for them. If they can’t run well at the Monster Mile…
- Keep an eye on Darrell Wallace Jr. this weekend. He’s a driver who runs on confidence and getting a top 10 at a cookie-cutter track was a big deal. His team is at a disadvantage at those places and Wallace needed a confidence builder after a month of poor performances. Now, we head to a short track in Bristol, a place where his No. 43 team has run well. Add in Richmond, Talladega, and Dover (where Wallace almost won in XFINITY) and it could be a great stretch coming up for him.
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.