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Inside NASCAR: The cost of keeping Nationwide Series viable

April 06, 2011, Jill Erwin,

NASCAR officials, team owners walk fine line to keep Nationwide Series viable

Money makes the world go round. Any race team can tell you that's true. The phrases "cubic dollars" and "the best way to wind up with a small fortune in racing is to start with a large one" aren't just tired cliches, they're fact.

Even in the best of times, owning a race team can be a break-even proposition. And the "economic downturn," or whatever phrase one prefers to describe the struggles in the past several years, has made itself felt throughout racing.

"The lowest we can race for is $100,000 a race."


But nowhere may that be more evident than in the Nationwide Series. Brett Bodine, the director of competition, Research & D Development, said Nationwide is 'the most diverse series we have from the front of the field to the back."

With costs spiraling upward -- estimates range from $5.5-6.5 million to run a competitive, top-20 team -- and purses being cut for the second consecutive season, the work is constant in trying to keep the series a viable outlet for those already in it and make it enticing for those considering entry into the field. It's a job not only for NASCAR officials, including Bodine, but for the teams themselves and those charged with being a steward for the series.

While most teams will not go on the record with how much money they're getting from sponsors and where that money goes, Kenny Wallace has no such qualms.

Wallace moved to RAB Racing this season and is eighth in the points. He makes sure to mention he's not getting paid by RAB, instead counting on his TV money and personal appearance contracts.

So where's RAB's money going? Let Wallace tell you.

"We lease motors from Triad every week," he said. "Depending on what program you use, that's $25,000-$35,000 a week, per engine. Let's say $30,000 a race for a motor lease. That's the way it is, no way around it. If you're going to run in the top 20, you need six sets of tires. That's $1,900 a set, so that's $11,400 a week. When you leave the shop, you're out $41,400 for six sets of tires and one motor. Period. That's the truth and that's the way it is. People just don't [expletive] get it.

"OK, let's say we're going to go to Texas. We'll take our crew members and fly them there. Then we have hotel rooms. If we take and we get 10 rooms, times $200 a night for three nights, that's $6,000 for hotel rooms. We don't have the choice to get the $99 a night rooms because they jack the prices up. Let's go 10 crew members times 500 bucks for plane tickets. That's $5,000. For hotel rooms and plane tickets, that's another $11,000. That's just to travel.

"Our payroll: let's say we have 12 crew members, which is as little as we can get away with. Ten crew guys, a secretary and media person. Let's just be silly and give them $600 a week, so that's $7,200 a week. I've got to build a race car. We have to build this new car, because it's 2011. It's $70,000 for a new car. So we build six new cars, that's $420,000, divided by 34 races equals $12,352. So that's almost $72,000. We have the shop rental, we've got expenses like you have at home. Here's what we say: The lowest we can race for is $100,000 a race."

Got all that? Good.

Budget busters

While specific numbers are generally harder to come by from most teams, they're all more than willing to tell you the biggest budget-busting items.

For them, it's an easy top three of engines, personnel and travel. With the weekly cost of engine rental running smaller teams in the $25,000-35,000 range, plus the cost for the larger teams to actually build those engines, it's a taxing toll.

J.D. Gibbs, president of Joe Gibbs Racing, said his team's main cost is personnel. For it, it's worth the money to have the best people working on its cars, and with consecutive owners' championships in Nationwide it's hard to argue his outlook.

Now, getting those people to and from the race tracks, along with fuel and upkeep for the haulers, takes another big chunk out of the bottom line.

For Steve Newmark, president of Roush Fenway Racing, it's a cost worth taking on.

"Some of the smaller teams are going to [spend] less," he said. "At the end of the day, larger teams ... we run ourselves in a certain way. Our owners are not going to allow us to do cut-rate programs at the Nationwide level.

"I think that with those programs, there's a commitment to quality. That's part of the struggles. You could cut corners to try to adapt to the market, but I think you'll find that the top programs, that's not how we want to operate our businesses. At some point you have to make a decision."

That decision becomes harder to make as you climb down the hierarchy of teams in the series. With the obvious cash crunch, there have been noticeable changes. At Phoenix, only 40 teams ran the Nationwide race. At the other four races so far in 2011, at least five cars have run fewer than one-third of the laps and at least three in each race have run fewer than 15 laps. At Las Vegas, nine cars ran fewer than 15 laps, though one was ruled out for an accident.

Smaller teams that want to stick around have a few options to keep costs at bay. Borrow a set of tires from another team. Reuse an engine for multiple races by running it only a handful of laps every weekend. Bring a sparse crew, or none at all, when there's no intention to make it to the first pit stop.

But what about the teams that do want to compete? Where are their cost-cutting measures?

"We try to understand the industry and where it's headed. And we try to make rules, regulations and policies that are in favor of the team owner."


NASCAR's role

Bodine's been a driver. He's been a team owner. So he knows the sport from inside the garage. Now he's trying to control costs from a different perspective, as the man in charge of keeping NASCAR's series financially viable.

He's not new to the sport. He, and other NASCAR officials, knew the challenges that switching to the new Nationwide car full time this season would bring. So they planned ahead.

Cost-cutting measures began being implemented several years ago with the advent of the gear rule for the 2005 season. The sanctioning body set maximum RPM limits for each series, which helped decrease the cost of engine research and development.

After that came the tapered spacer, which reduced horsepower. Those two together helped to make the engines as a whole, and the parts within them in particular, more likely to last.

But one of the biggest moves NASCAR made in terms of cost-cutting for teams was the decision to make it so teams could use engines multiple times.

Gibbs is a big fan of the shift.

"The fan doesn't know how many times you run your engine," he said. "They don't care. The stuff they won't miss is what you can do to make a better show."

Which is precisely what Bodine and the rest were after. The hope was that the money that was being saved then could be put toward the influx of new cars that needed to be built for this season.

"Those three together were a well-thought-out process and put in place to save on engine budgets," Bodine said. "We felt like we affected the budget in a really big positive way with those being put in place."

But where there are steps, others want leaps. Each team obviously has its own goal in terms of what will help it produce more competitive budgets and race cars.

The problem for Bodine is in trying to balance all that. He's not in it for one team; he's in it for all of them.

"It's very difficult to make rules and policies that affect everyone in a positive way," Bodine said. "It's all in the way people's business models are. They all need different things to happen to affect their budgets positively. It is a juggling act. We work very hard, us at the R&D Center and [Nationwide Series director] Joe Balash and his folks and even [NASCAR vice president of competition] Robin Pemberton and [Cup Series director] John Darby, and we work very hard to try to identify those areas and try to react positively.

"We try to understand the industry and where it's headed. And we try to make rules, regulations and policies that are in favor of the team owner."

From team to team, appreciation flows for the steps NASCAR has taken.

"I do think NASCAR has been more focused on this than they historically have been because they recognize the economic situation," Newmark said. "What we all will continue to push is to not make one small adjustment and pat ourselves on the back. We all want the Nationwide Series to succeed."

"They do a great job; they're always working with the teams to take the cost out of the equation," said Jonathan Gibson, vice president of marketing/communications for Penske Racing. "Nationwide has done a great job of really focusing on the manufacturers and getting the equity of the brands. What you see on the track is something that's real exciting for the fan. We definitely want to get the fan excited and I think that what I would say is we're always working with the sanctioning body to take costs out of the system. More so than ever, there has been great cooperation."

But as with anything, you can't please everyone all the time.

Rusty Wallace has been vocal on changes he would like implemented as he oversees a Nationwide-only operation. (Autostock)

Testing his patience

Rusty Wallace is constantly on the go. He's got a TV job which takes him all over the country on weekends and a Nationwide team to run during the week, the latter of which employs nearly his entire family.

One place he wishes he didn't have to go is Pikes Peak, Colo.

Following the decision to ban testing on NASCAR-sanctioned tracks for the 2009 season, teams had to find someplace new to test. This season, Nationwide is allowing four tests at NASCAR tracks, to help teams adjust to the new car, but they are held the day before the race weekend starts. And with all Nationwide teams given clearance, even the Cup-affiliated ones, it undercuts exactly what Wallace was hoping for.

Wallace has long said the largest challenge facing his team, and other Nationwide-only teams, is closing the gap to the Cup teams. He pushed -- hard -- to open up testing on NASCAR-sanctioned tracks for Nationwide-only teams. His argument is that Cup teams are getting twice the track time, with both Nationwide and Cup practices, and that information overload is a massive disadvantage for the "little guys."

Wallace got some testing, but not the kind that will help him in races as much as he'd like. So instead, he's charged with finding the money to send both his cars -- driven by his son, Steve Wallace, and Michael Annett -- to places including Pikes Peak, Milwaukee and Virginia International Raceway.

"I would have much rather taken that same money and given it to the track I'm actually going to race on," Wallace said. "I'm doing this at tracks that I'd rather not be at. I'd rather be going to Michigan and spend my money with tracks we're actually going to race at."

Bodine said Wallace's ideas were not falling on deaf ears.

"We heard Rusty and we understood his position," Bodine said. "As a sanctioning body, we have to do things for the whole garage area.

"We're allowing extra track time with this new car, but in a way where there is minimal additional cost. It's the day before the event, so there's a very minimal impact negatively on a budget."

Wallace estimated the total cost of sending two cars and people to Pikes Peak was going to be upward of $100,000. That's money he thinks he shouldn't have to spend, if NASCAR officials would open up testing for Nationwide-only teams at sanctioned tracks.

So he got a little bit of what he wanted, but far from the whole enchilada.

"The toughest thing we have to deal with is competing against the Cup-related teams," Wallace said. "Those cars come right out of those Cup shops. Because of that, it's become very expensive for me. We love it and we work hard, but it's night and day difference.

"One thing I realize though, and that's if these guys just raced themselves without racing the best, how good they are is going to plateau," Wallace said. "They need to race Kyle [Busch], Carl [Edwards], all these guys. We want to race against the Cup guys. We have to have them to put asses in the grandstand. We've just got to do whatever we do on a performance basis to help these young guys catch up to these other guys."

With a competition gap and a serious financial crunch, what does the future hold for Nationwide?

Facing the future

Bodine has seen all this before. As recently as two seasons ago, there were fields in the Truck Series that fell short of the maximum 36 entrants. The struggles were as real then, for it, as they continue to be now for the Nationwide Series.

But Bodine said the tide has turned for the Trucks.

"All these same cost-savings initiatives were also put into the Truck Series and we saw the positive impact," Bodine said. "There was an opportunity for new ownership that came in and they took advantage in a down market and now it's doing quite well on the ownership side.

"That will also happen in Nationwide. There will be teams that run other series, they'll see a downturn in car counts, see they're not putting the maximum number on the track, and they'll see that as an opportunity and they will invest in the Nationwide Series."

No one knows when the economy will turn around, when sponsorships will rebound, or when money will be easier to come by for teams.

Bodine says it's on its way now. With the changes that have already been implemented, there has been some relief.

Those with the teams know a shorter schedule, perhaps 28-30 races, would alleviate even more of the costs. That, however, is not as easy a fix as it might seem on the surface. There are track owners and contracts and a PR battle to be waged if that were a direction NASCAR were to consider.

But that doesn't mean the concerns and wishes of those like Wallace won't still be considered moving forward.

"We're always working, always looking," Bodine said. "Myself and some of the folks who work with me here at the R&D Center and with the teams, we're trying to understand their costs and what their latest heartburn might be. If we see something or think there might be something there worth taking action on, we will."