NASCAR roundtable on economic welfare of sport (cont'd)

SBJ: In the news recently, Dale Earnhardt Inc. lost one of its top sponsors, Menards, and other midlevel teams are fighting just to retain their current sponsors, much less find new ones. What is the future for teams and is consolidation coming?

Waltrip: I just know there's more stuff going on in that garage than I've ever seen before. Folks asking, "How's your business? What's your plan? Three teams, four teams?" That's healthy. That's a front where team owners genuinely want to know what's going on. As long as we all know each other's business and what's going on, there are opportunities to save sponsors and save jobs and field cars. We've listened to every opportunity and tried to understand everyone's goals and thoughts. ... I say that, but there will be consolidation, there will be less teams next year, there's no way around it.

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It's still a great place to be, the sport is extremely solid by every measure you could have and car count could go down quite significantly and you could still have an extremely solid sport.

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MARK COUGHLIN

Lauletta: I call it "the shifting sands of the garage" because it's going to look a heck of a lot different. It could be good or it could be unfortunate. The economy is difficult now, but it's not going to be difficult forever. So, the hard part when you're on the team side: Do you jump in and do something to make it through a difficult time because a sponsor left or do you hunker down and stay with a plan? But there is a lot of stuff going on that's going to make the garage look different than it does today.

Waltrip: The best we can figure, there's 24 teams that have full-time sponsors. After that, there's some part-time sponsors and then there's no sponsors. As you entered 2007 and more so 2008, there were teams without sponsors, but they were like, "We'll get our car in races and we'll get the sponsors." Well, those sponsors never came and that attitude won't roll into 2009. It'll be really interesting to see, not only how many cars show up for the first five races, but also how many of them are sponsored and what's the attitude in the garage about racing. I hope ... I just think it's going to be different.

Coughlin: Whether there's 150,000 or 100,000 people in the stands, any sanctioning body would give its eye teeth to have 43 cars starting on a given Sunday. In the event cars aren't showing up, it's not going to be the end of things. It's going to be important how we handle that and react to it. It's still a great place to be, the sport is extremely solid by every measure you could have and car count could go down quite significantly and you could still have an extremely solid sport. It's going to be important how we react to fans and clients and what message we convey back to them. "Where's the sport going, is my money being wasted, am I getting 15 percent less because there's 15 percent fewer cars in the race?" It makes the type of analytics that folks like us provide to clients help them understand where the value is locked up and how to unlock it. You can still get a great return on your investment; some other things might be going on in the background, but understanding that hard-core fan and how to engage that person ... they love nothing more than when a company shows that they're fans, too.

Waltrip: I don't think it'd be a terrible thing if there are fewer cars. I don't even think it's a bad thing.

Lauletta: Not only is it not a bad thing, it's a good thing if it stops the erosion of the value proposition we all have. We [Ganassi Racing] shut down the 40 car because we didn't have the right sponsorship for Dario [Franchitti]. It wasn't that we didn't have sponsorship, but I was not going to propose to Chip [Ganassi] that we start taking less from a fee perspective than what we had on our other two cars or what we thought it was worth. If we in the sport don't stay disciplined to that and you have owners or tracks taking that value proposition and really cutting it until it's bleeding, that's going to be really difficult to come back from. It's not going to be like this forever. If we start rolling out Nationwide cars that people can put their logos on for 5 grand, that's worse than just saying, "You know what, we're just not going."

Burch: It's encouraging that we haven't seen an exodus of people leaving the garage. We've seen sponsors go from team X to team Y or a full season to a more strategic partial season, but companies still see the value in the sport. As long as we can keep people in the sport at whatever value level is appropriate. ... If we start seeing sponsors leaving the sport totally, that's a red flag for everybody.

Lauletta: We do have a sponsor leaving the sport: Texaco. They've been around the sport forever. I was involved in every conversation with them. They looked at what they were trying to get out of it, which was difficult to get to, but once we got there, it just wasn't paying off for them. It doesn't mean they'll never come back. You know what, I've spent a lot of money in my old world [on the brand and agency side] and I've wasted a lot of money, so I'm not going to sit there and say, "You still have to do it even though you're not getting what it's worth." So they're going to take a break and hopefully they'll come back. But that's a better way to go than to have them stay in it and it doesn't work because then they'll ultimately leave and never come back. If they leave the sport, that's OK, as long as they're not aggravated or got screwed. That's just the life cycle.

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When you take something away, it's less valuable to me. Forty-three cars, that is the content, good racing, good personalities. I'd hate to be sitting here in five years and we're down to 35 cars. Time out. We've got to have full fields.

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TRIP WHEELER

Wheeler: From a common sense standpoint, Michael Waltrip [as a driver], that is the sport. The first race you don't run, as a fan, the value of what I'm watching is less. I agree, you don't want to take sponsorship for nothing and undercut prices, but my fear is the slippery slope. You're 40 cars, then you're 39, you're 38. I think everybody has to help the teams field good, full-funded cars. That's the product. When you take something away, it's less valuable to me. Forty-three cars, that is the content, good racing, good personalities. I'd hate to be sitting here in five years and we're down to 35 cars. Time out. We've got to have full fields.

Waltrip: It happened in '02 or '03, we were down to 39 cars, other guys were starting and parking and, really, we don't even remember it now. Just think of the 100,000 people at Talladega. Most of them want to know how Dale Jr.'s going to do, they want to know how Tony Stewart is going to work out and what's going to happen with Jeff Gordon. The rest of it is just white noise; every now and then a guy like me runs up there and takes the lead and everybody's like, "Yeah, that's Dale Jr.'s buddy there. He can still draft." To me, you can read more into the number of cars than is significant. ... Last year, I picked the worst time in the history of NASCAR to start a team. Fifty-one cars, at least 47, showed up and it almost took a wonderful sponsor in NAPA and made them say, "We don't want to do this anymore, this isn't fun." A better problem to have would be less cars than too many.

Lauletta: The bigger issue is the cost-value relationship. When you could get a full season with the same driver, it was a good cost-value relationship. At Miller, when we had our logos all over Rusty Wallace, we were spending a lot of money, but it wasn't crazy money, which is what it takes now. We're past that point now. The agency guys will tell you that you just can't find that many companies willing to spend that much money because the return, except for a couple of guys, is not there.

Coughlin: The slippery slope from a marketer's standpoint ... look at the Claritin program. They're putting very few dollars into the sport when it comes to actually getting the car on the track, but they're spending $15 million to $20 million in media, which is good because some of it is in nonendemic programming. But if you're looking for the Claritin car, you're never going to find it. Same thing to a certain extent with the Gillette Young Guns. Go out and get the collective rights. What are the rights dollars and what are the working dollars? When it's upside down and you're paying so much for the platform and you have no dollars left to leverage it, you're seeing a lot of brands go to the Nationwide Series. There, you can get a leading driver from the Cup Series and get his likeness. Moms going down the grocery aisle may not know the difference, but she knows that somebody is going to like it when she brings it home. It's an option we have to look at all the time versus the big time. But you are pushing a lot of people out or to the brink. Do you follow a Tony Stewart or do you stay where you are and take a chance at a reduced cost? Home Depot built that equity in Tony. We work with sponsors who don't have enough money left to do themed creative. Why are you here in the first place? It's absurd.

Head2Head
• Is the DEI/Ganassi merger good for both teams? (Continued)