The View from Here: The Business of NASCAR

NASCAR officials introduced a new drug test policy that will begin on January 1, 2009. Drug testing will be conducted by AEIGIS Sciences Corporation beginning with all drivers at races in January. Random testing will include drivers, crewmembers, and NASCAR officials. NASCAR is declaring the right to test for any drug, from prescription medicines to steroids.

Overall, the policy is more in line with those of other sports. However, the new policy does not include a specific list of banned substances. Is this new policy going to be too broad? Some feel as though this policy opens the door for legal problems and that it can give somebody a pass to something.

Steve O’Donnell stated that he wants to keep the policy broad because it allows NASCAR to test for abuse of all substances. Most sports have lists of banned drugs because they focus on preventing illegal and performance enhancing drugs. NASCAR wants to leave it more open-ended because it knows that NASCAR has large safety issues. Something that may be legal in other sports could be harmful when racing. As Kyle Petty stated, “Look, a drug is a drug is a drug. This is not shooting hoops; this is not hitting a fastball. This is life and death. In a sport like this, everything should be off limits unless there is a medical reason.”

Three failed tests will result in an automatic lifetime ban from the sport and the governing body also reserves judgment to impose a lifetime ban after one failed test. Drivers must notify NASCAR when they are taking a prescribed medicine before they are tested. The drivers agree with NASCAR and feel as though there should be a tougher testing program and are happy to know that it will be applied throughout the entire sport. NASCAR has always been perceived as a clean sport, and this is its way of backing it up.

I feel that it is important that NASCAR is introducing a new policy. This is one step closer for NASCAR to be like the other major sports that have strict drug policies. Even though NASCAR is already perceived as a clean sport, it is important that the organization is able to back it up with results to prove it. Also, it is probably a good thing that the list isn’t specific because it would probably have to be constantly changed. This way will know that all drugs are banned because no drug is safe. Drivers shouldn’t have to worry about if the other drivers or crewmembers are on a drug or not. This is NASCAR’s way of making sure that the drivers are always safe. If you don’t play by NASCAR’s rules, then you don’t play at all.

And that’s the view from here.

MG

Posted by at 9:40 AM | Permalink | Comments (1)

Can the business of NASCAR be compared to that of Wal-Mart? Perhaps I am going to the extreme here, but the two enterprises have a great deal in common.

I am a business student and confess that I do not have a lot of knowledge about NASCAR, having only been to one race and almost a second (but a hurricane changed that opportunity). As we discuss the different aspects of NASCAR in our “Business of NASCAR” class, I hear so many Wal-Mart similarities woven into our class discussions.

As many of us know, Wal-Mart leads a secretive life in business. There is not much known about how the company operates. Its employees’ and suppliers’ conversations are held in strictest confidence. If word gets out that a supplier has talked, whether good or bad, the business relationship could be severed. NASCAR runs the same way. Contracts with drivers are kept extremely confidential as are the terms of sponsorships. Perhaps not to the severity of relinquishing the contract but you rarely hear about the terms of a contract, unless a case goes to court and the contract is available to the public eyes.

Wal-Mart and NASCAR are similar in their clientele. You have Wal-Mart lovers and Wal-Mart haters, as you do with NASCAR. Wal-Mart and NASCAR are parallel in that their followers are very loyal to the company.

NASCAR and Wal-Mart hold a great deal of power in negotiating with their suppliers. They both hold the upper hand. If you do not do business their way, then others are waiting in line to take your place. With Wal-Mart if you cannot supply your merchandise in a timely manner following its shipping provisions, then Wal-Mart can easily pull its business and forward it to a company who can, often without warning. In the NASCAR world, if you are late with your entry form, NASCAR holds the option to accept or deny entry into the race.

While the companies are different in so many ways, their likenesses are uncanny. They both are a business that has the reputation of having the upper hand, and they know it. They call the terms, they call how they want things done, and you must adhere to their rules.

And that’s my view from here.

AV

Posted by at 4:10 PM | Permalink | Comments (1)

I’ve been on vacation for the past few weeks and thus haven’t been submitting any blog entries, but now it’s back to work.

And, with the Race for the Chase nearing its end, everyone’s attention is on who will make the Chase—and it’s close. But rather than ramble on that topic, I’d like to address recent comments by #31 regarding the “long-term health of NASCAR”.

It seems that Jeff Burton believes it’s in the best interest of NASCAR, the teams, and the sponsors if the number of cars attempting to qualify for a race is limited to the 43 slots.

“The philosophy of having 48 cars all vying for 43 sports, I know that’s cool and everything. Or the thought that if you’re not good enough, you just go home because you don’t deserve to be in the race. But that’s not economically sound,” said Burton in an interview at Michigan last week.

He believes that spreading the sponsorship dollars over more cars de-values the sponsor—and even hurts teams because the sponsors will, in the current economic climate, not be as willing to risk backing a team that possibly will not make the race.

“Forty-three cars that are assured of being in the field is the best scenario for our sport,” Burton stated.

I’m not even saying the "F-word” (and here's more on the "F word") but to me it certainly sounds like that’s what Jeff is saying. And how does a team get to be one of the 43?

Here’s a thought for you -- if the number of cars attempting to qualify for a race is limited to 43, how do we get new drivers, new teams, and new sponsors into the sport? Yes, the sponsors of those 43 teams are quite happy knowing their driver will be in the race but I think it’s short-sighted in the long run.

But that’s simply the view from here.

Jon

Posted by at 11:25 AM | Permalink | Comments (2)

A couple of years ago, Dale Jr. uttered a four-letter expletive during a post-race interview. NASCAR hit him with a sizeable fine. Several other drivers have been known to cuss over their headphones when talking with their crew chiefs. When that has happened, NASCAR fined them for behavior unbecoming the sport.

Indeed, NASCAR likes to promote its clean, family-oriented sports image and likes its drivers and crews to reflect that image. In fact, sponsors and NASCAR have been blamed for the blandness of the sport, with fans citing the lack of the flamboyant drivers and hard-racing action they came to love in the past.

So, now that NASCAR is in the midst of a multi-million dollar lawsuit that weighs heavy on the clean-cut image that NASCAR has worked so hard to develop, what will the sponsors now think? Will we see a revolt of sorts by current sponsors as their contracts with team owners begin to expire? Will teams be faced with even more difficulty securing sponsors because of the nastiness of the charges along with the current economic situation that we’re all facing?

It’s hard to imagine NASCAR coming out of all this without some major bruises to its image as the sport without controversy, drugs, or scandals. Time will tell whether sponsors will reconsider the value of putting their names on cars to the tune of $20-25 million when the sport may be in court—legal as well as public opinion—for quite some time. This isn’t a “Kentucky lawsuit”; it’s a lawsuit that most everyone can identify with in one way or another.

And that’s the view from here.

Jon

Posted by at 9:22 AM | Permalink | Comments (0)

Well, I finished Mark Yost’s “The 200 MPH Billboard: The Inside Story on How Big Money Changed NASCAR” over the weekend. It was a very good “read” and put me onto several topics that I want to investigate further. Mr. Yost closed his book with an epilogue, “What’s Next for NASCAR?” Some of his observations were off. For example, he suggested that the company taking over the former Busch series could be expected to pay three to four times more than Anheuser-Busch did and we all know that wasn’t the case. Still, he raises some interesting topics.

One that struck me was that he saw NASCAR eventually building the Car of Tomorrow and selling it to the different teams. In that way, NASCAR accomplishes two important objectives: (1) make sure all the cars are the same so that no team has an advantage and (2) make MORE MONEY! NASCAR “owns” a great deal in the sport, including TV rights, merchandising rights for NASCAR merchandise, and even NASCAR Images, which controls photography and film. So, why not own the cars and have rights for building and selling them to teams? Seems like a possibility “down the road”.

And, in case you missed it (and that would be hard to believe), a former black female NASCAR official has filed a $250 million lawsuit for racial and sexual discrimination, sexual harassment, and wrongful termination. If, as they say, “perception is reality,” this will be a major blow to NASCAR’s drive for diversity.

And that’s the view from here.

Jon

Posted by at 3:29 PM | Permalink | Comments (0)

First of all, I hate cheaters just as much as the next person — whether it be racing, baseball (read steroids), or politics. But we have a philosophy in the U.S. that says that one is innocent until proven guilty. But, that’s not how NASCAR sees it. In NASCAR’s eyes, if something is amiss with your car, you obviously are a cheater and must be penalized.

Look at the obvious situations so far this year. Robby Gordon switches from Chevy to Dodge and receives a front nose for his Charger — but it isn’t the approved new Charger nose, which is currently undergoing NASCAR approval. Forget that R. Gordon didn’t realize it was the wrong part, forget that someone outside his team supplied the part, and forget that it was discovered in opening day inspection and thus the car was never run with the wrong nose. NASCAR simply says — “black is black and white is white, and that’s all there is to it!”

And now NASCAR discovers in the post-race inspection at Las Vegas that Carl Edwards did not have a lid on the oil reservoir encasement (or oil tank box). Five cars in the Nationwide series had loose lids on the oil reservoir encasement (and subsequently, the National Stock Car Racing Commission rescinded the penalties assessed to David Stremme, his crew chief, and car owner Rusty Wallace). But the appeal had to take place because NASCAR only sees “black and white”. Keep in mind that these “offenses” are not even close to being compared with last year’s penalties of Earnhardt Jr. (mounting rear-wing brackets illegally) and J. Gordon and J. Johnson (altering fenders). Those were overt modifications to gain a competitive advantage.

Despite all the technical expertise in NASCAR’s operations, the Big Boys simply don’t want to exercise any professional discretion; otherwise, everyone will be shouting “foul!” That’s the easy way out, NASCAR. For goodness sake, let’s not have cheaters — but everyone’s been guilty of an honest mistake!!

That’s my view from here.

Jon

Posted by at 11:53 AM | Permalink | Comments (1)

If last weekend’s fiasco in California did anything, it showed everyone — including NASCAR — that the current Sprint Cup schedule simply needs the same major overhaul that NASCAR gave its cars with the COT(oday).

OK, weather notwithstanding, look at the fallout of racing on Monday in California and having to be in Las Vegas by Friday morning (make that realistically Thursday late afternoon). And that’s after nearly two weeks in Daytona.

Look deeper into the schedule — Texas, Phoenix and Talladega start April. Then in June, there are back-to-back races at Pocono, Michigan and California (Infineon), ending the month in New Hampshire. Doesn’t get much better at the end of July and beginning of August with Indianapolis, then Pocono, Watkins Glen and Michigan. Then the season ends with Texas, Phoenix, and Homestead-Miami.

Bottom line is that any one of these venues is susceptible to terrible weather over a weekend that could disrupt travel schedules — and yes, attendance and TV viewership. But more importantly — especially in times of high gas prices — can’t NASCAR cut these teams some breaks by setting a schedule that doesn’t have them criss-crossing the U.S. week after week?

It’s possible but frankly NASCAR doesn’t seem interested in teams, drivers, or fans.

And that’s the view from here!

Jon

Posted by at 10:15 AM | Permalink | Comments (1)

Continuing the examination of our “NASCAR’s Wish List for 2008, we explain wishes 5 through 7, keeping in mind the “business” emphasis of the wishes. (Details on 8-10 are here.)

#7: Everyone loves the COT: The Car of Tomorrow is certainly now the Car of Today, at least in the Sprint Cup series. Tests at various locations last week showed that times were fairly comparable to those of the former cars. Most drivers had kind words for the COT as well. If success and happy drivers come out of Daytona, NASCAR’s efforts to create a safer car while minimizing team costs will be an overwhelming success. The fear of IROC style racing will be dissipated, and the fans can turn their attention back to racing and not controversy. It’s a win-win-win for NASCAR, teams and fans.

#6: One of the open-wheel drivers – preferably Montoya – makes the Chase: What better way to show the world that NASCAR racing is truly the best racing than to have an open-wheeler make the Chase. The new arrivals are adding to the diversity of the sport (at least “international diversity”) and can only help to entice open wheel fans to the NASCAR scene. That translates to fuller grandstands and larger TV audiences. And that makes NASCAR happy.

#5: An end to bickering over the 35 rule: We all know the 35 rule was instituted to ensure that major sponsors — doling out lots of change from their pockets — would have representation each week of racing. Despite the many calls — and there have been many calls from a variety of sectors — NASCAR isn’t about the scrap the rule. It’s still about the business of NASCAR, and ensuring happy sponsors is a primary goal. So, let’s get over it and go back to racing.

Remaining four wishes next week.

Can’t wait for Saturday—it’s been a long winter!

Jon

Posted by at 8:37 AM | Permalink | Comments (0)

A couple of weeks ago we posted our first blog entry for this racing season with NASCAR’s Wish List for 2008. We want to take this opportunity to expand on various wishes in order to explain why we “hypothesized” the way we did. Keep in mind that the “wishes” are based more on the business side of NASCAR than the racing side.

Here are three wishes.

#10: No “three-peat”. Las Vegas bookmakers give #48 a 4 to 1 chance of three-peating as Sprint Cup champion. It’s only been done once. We think NASCAR would like to see a close championship but with a new face (or even familiar face) in order to stimulate greater fan interest in the Race for the Chase as well as the Chase itself. An analogy would be the Chicago Bulls, UCLA under Wooden and even the Pittsburgh Steelers. Fans of those teams loved their dynasties but others were turned off by their repeated success.

#9: #88 makes the Chase. He’s been the most popular driver the last several years but has had his ups and downs. What better way to stimulate fan interest than to have Dale Jr. make the Chase — or even better, to win it all? Given all the off-season hype about Jr. winning races and making the Chase, fans would be sorely disappointed if after Richmond in September, he’s down in 14th or 15th place.

#8: TV ratings and track attendance improve. Of course, NASCAR wants these to happen but not simply to point to the sport’s popularity. Rather, sponsors and TV network exec’s would be thrilled at the possibility of greater exposure — and that’s why they pay big bucks for television contracts and bright logos on the race cars.

Stay tuned for further elucidation.

Jon

Posted by at 1:28 PM | Permalink | Comments (3)

After several years at the helm of NASCAR, Brian France said last Monday that NASCAR will minimize the number of changes it makes this year. His rationale was that NASCAR needed to bring back lost fans. I (and others) couldn’t agree more that the rapid changes he instituted did dampen the enthusiasm of many fans toward the sport they love(d).

However, there should be one change instituted as quickly as possible — the elimination of the “top 35 rule.” Joe Menzer in his NASCAR.com column on Tuesday called for the rule to be eliminated. Jeff Burton has indicated that sponsors for teams outside the top 35 are few and far between since there is no guarantee their teams will make the race. Even Darrell Waltrip was quoted in Menzer's article acknowledging that the “top 35 rule” has drawbacks as well as benefits to the sport.

Last year I wrote that the “top 35 rule” was patently unfair and in effect was creating “franchises."

If we’re not going to eliminate the rule entirely, how’s this for a compromise: top 12 must qualify on time (with so many past champions probably in the top 12, the chances of those drivers not making it are miniscule), positions 13-25 are guaranteed starting spots, and 26-42 (26-43 if no past champion’s provisional is used) qualify on time. That gives teams that have faster times than those in positions 13-25 a much better chance of making the race and not having to pack it in for the weekend at great expense.

Then again, I’m probably “spitting into the wind” on this one!

Jon

Posted by at 3:02 PM | Permalink | Comments (2)

We began our blog last year with our top 10 predictions. We hit on a few of them and felt really good. This year, instead of predictions, we offer NASCAR’s Wish List for 2008 — what does NASCAR, which is so often accused of pulling the puppet strings, want to see happen this year. In the coming weeks, we’ll discuss the wishes in more depth. So, here goes!

#11 (OK, we want to start with a joke): No more “debris on the track” cautions!

#10: No “three-peat”

#9: #88 makes the Chase

#8: TV ratings and track attendance improve

#7: Everyone loves the COT

#6: One of the open-wheel drivers — preferably Montoya — makes the Chase

#5: An end to bickering over the 35 rule

#4: Toyota Wins

#3: A New Venue (Track)

#2: Less boring races

#1: Danica “sees the light”

Posted by at 9:47 AM | Permalink | Comments (3)

So what do Major League Baseball and NASCAR have in common?

They both will probably have the same nightmare. What’s that nightmare? Think about how much trouble the MLB head office went to ensure that the World Series games would not be (1) during the day on a weekday and (2) not up against football at night. So what happens? First, Colorado sweeps the National League pennant. Bosox saves the day by clawing out of a 3-1 deficit to win the American pennant.

Then the NIGHTMARE—a Bosox sweep in four!

So, let’s now look at the situation in NASCAR. The New York front office increased the number of drivers in the Chase (and Jr. still didn’t make it), hyped the change in the points system to reward race winners, and kept talking about how the top five drivers in the Chase are all capable of winning the championship even as late as the Martinsville race. Three weeks ago I wrote that after Martinsville, the Chase would be down to two drivers — no one even flinched. Well, we now have exactly that — Teflon I and Teflon II.

Who even cares now that we know that Hendrick will once again carry home the trophy — just which of the Teflon men will it be? Do Tony’s fans care? Matt’s? Denny’s? Hardly!

Yes, gentlemen (and ladies): we have a repeat of the MLB Nightmare — except now it’s NASCAR’s turn. As Mike said, “twice of one or half of the other”! Better leave the lights on so as not to fall asleep.

Jon

Posted by at 2:51 PM | Permalink | Comments (1)

In Monday’s NASCAR.com headlines, it was announced that Bill Davis (of Bill Davis Racing--#22 Dave Blaney and #36 Jeremy Mayfield) is interested in selling part or all of his race team. Seems that even with the success of Blaney in his Toyota, Davis is having a difficult time competing against the likes of Hendrick, Childress, Roush/Fenway, DEI, and Gillette/Evernham. As they say, “money talks, nobody walks” but it looks inevitable that Davis will walk.
Now reintroduce the “35” rule — top 35 drivers in points are guaranteed a spot in that week’s race, leaving the small guys somewhat hanging out to dry. It is becoming increasing clear that the small one- and two-car teams will be history unless something changes. NASCAR mandated a limit of four teams for an individual owner because of Roush’s success with his five-car set-up a couple of years ago.
Maybe it’s time for NASCAR to visit the issue that plagues open wheel racing—the limited number of teams, which results in boring racing. How about it, NASCAR? Won’t you come to the rescue for the small guys and reinvigorated racing?
Probably not!
Jon

Posted by at 11:52 AM | Permalink | Comments (1)

"In Memory ... Without his leadership, this blog would not exist.
Enough Said ..."

Michael

Posted by at 1:56 PM | Permalink | Comments (1)