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December 06, 2008
Ominous events in Asia and Europe
By DAVID GREEN
This is the chance you take with you get so deeply involved with companies outside the specific industry of automobile racing. Your fortunes become tied to theirs.
It didn't make much of a splash on TR.com or any other NASCAR-centric news outlet, but Honda and Audi pulled out of racing this week -- Honda departing glamorous Formula One, and Audi abandoning the European and American Le Mans series.
The two manufacturers were at opposite ends of the racing spectrum; Honda was pretty darned inept in its most recent F1 endeavors, while Audi was all but unbeatable with its turbodiesel-powered sports prototypes.
But it was the bottom line, not the finish line, which counted.
Toyota hastened to assure that it was not going to depart F1. This is now the world's premier automaker and, without much question, the most successful financially. The question is how long will even Toyota be able to thrive in the thickening cloud of global economic chaos?
Audi still plans to compete in some elite endurance races this year, including Sebring. And Honda, as far as anyone knows, will fulfill its obligations as engine supplier for the Indy Racing League. This year.
As for Chrysler, Ford and General Motors, it seems ludicrous for anyone to think there's not a real serious possibility that their NASCAR endeavors are going to be all but deleted. If the Big 3 executives' pleas to Congress are not exaggerated, they're going to go belly-up without a government bailout, and if they get the bailout, how sympathetic toward auto racing do you think elected officials who oversee what they do with their Christmas presents are going to be?
Just about as sympathetic as they were toward the auto company CEOs using their corporate jets to make their first pilgrimage to D.C. to beg for a handout, I would suspect.
Likewise, we have put all our NASCAR eggs into a handful of baskets as far as the racing industry is concerned. Now, let's see what happens if manufacturers bail or collapse and corporate sponsorship money from non-automotive sources dries up. Let's see if Hendrick, Roush and one or two other superteams, sans $40 to $50 million in marketing revenue, can or will still put a full field of cars on the tracks.
Or, perhaps the depressed economy will make it possible for a few of the have-nots to get their feet in the door and there will be a reprise of the independent team in a NASCAR world that has seen the economy level the playing field in a way that would impress even Gary Nelson. And perhaps, with the Middle East sheiks having to cut down from a dozen to only eight or nine multibillion dollar mansions because of slumping oil prices, NASCAR fans will actually be better able to afford to attend a race or two than they were able to during our times of so-called prosperity.
In Great Depression I, as we may soon begin referring to it, auto racing survived. Indianapolis, which closed six years because of global war, did not miss a 500 during the hard times between world wars.
Even in a worst-case economic scenario, I suspect there will be a 2009 NASCAR season. It's going to be interesting to find out the details of just what it's going to be like.
Surely we learned a long time ago we are not insulated from rumblings on other continents, as many of us felt right up until Dec. 7, 1941. It does, indeed, matter to NASCAR fans that Honda and Audi are hitting the kill switch on significant racing enterprises. Or, at least, it should.
December 6, 2008 | Permalink
Comments
David,
When I saw Honda and F1, I knew this would be your topic.
My thoughts on the manufacturers pulling out of racing is, "so what?" As long as girls and guys want to drive cars fast, there will racing, in every form, somewhere. I'd go so far as to say their involvement has turned racing into a circus that is concerned with profits, and advertising, but not racing or the fans. NASCAR isn't about racing or fans any longer. NASCAR protects sponsors and mega-teams.
Bottom line. They will race. NASCAR will have to adapt if they want us to fill the stands or watch on TV. Lower prices, and fewer gimmicks, wouldn't hurt for NASCAR. I have no problem if a 5 car mega-team dissolves, if 4 independents replace it, and they will come. People are entertained by people going fast. Whether NASCAR adapts or not, people are going to pay money to someone who comes up with the right racing package.
Posted by: Keith | Dec 6, 2008 11:59:40 AM
This may be viewed as a crackpot theory, but I believe that the current economic situation presents an opportunity here to put sports back into perspective, not just in auto racing but pretty much across the board. I particularly like your comments about the possibility of the "have-nots" getting the opportunity to get their feet in the door and for fans to be able to afford to attend a race because that is what has been lost here, not just in auto racing but most other sports as well. Now that it has hit so many in the wallet maybe people will it back and say, "Wait a minute. Paying a guy $2 million or $3 million a year to coach football is crazy. Even $1 million is kind of absurd." The booming economic times that have led to such contracts across the board also have stuck us with ticket prices that scalpers once would have drooled over and $8 beers at the concession stands. Big money may have given the participants big contracts but in many cases it also has taken the fun out of the games. Aren't sports supposed to be fun? To me, that's one thing that makes the truck series so appealing. Those guys are competing like hell but they also seem to be having fun. I don't think we can turn back the clock completely, but I do think one benefit that can come out of all this is that we can put things on a more sensible footing. I have nothing against the Hendricks or the Roushes or the Penskes or the Ganassis of the racing world, but maybe they could do with one less computer on pit row. I do like the notion that the guy with grease under his fingernails also has a chance. (In the interest of full disclosure, I should point out if I were a sports god for the day I'd also bring football coaches down from the pressbox and make quarterbacks call their own plays, and I'd handcuff the first spotter who would run down to strike a deal with another competitor to team up at the end of a race.)
Posted by: Paul Borden | Dec 6, 2008 12:13:05 PM
Paul, pretty much agree with you on all points. I think this is a good chance for sports overall to get back to the real world. Not just auto racing.
I think if the Big 3, or whatever they are now, get federal funds, that sports marketing should be cut completely. I'm as big a fan of Auto Racing as the next guy but I don't want my tax dollars paying for rich guys fun and my entertainment.
Posted by: canucken | Dec 6, 2008 4:20:41 PM
Paul I agree too, UNC Charlotte wants a football program...Price tag? 46 Million...David correct me if I'm wrong but isn't College all about academics?
I shook my head when I read the news of Honda, Motorsports has just gotten too...Expensive, And I'm sure Mike will be here shortly to lecture us on spending caps, and IMO that can only be accomplished by franchaising...Hell it's already like corporate farming!
On the Government bailing out the Big 3...Sure their ONLY gonna take a dollar salary...wink, wink...When do we stop? what happens when the price oil drops to $11.00 a barrel, will we bail out Shell, Texaco and Mobile too?
Posted by: Fan #5 | Dec 6, 2008 4:52:16 PM
David Green - "Toyota hastened to assure that it was not going to depart F1."
On the contrary, they're history, toast and hasta-la-bye-bye.
The team is for sale and if reports pan out will be taken over within the next few days by former Honda (When it was BAR) boss, and current Prodrive boss, David Richards.
Best case is Honda funds the team thru the end of March, but that's only for purposes of selling the assets.
But they only have themselves to blame on two counts. The most lavish budget in F1 that's generally regarded to be just under a half BILLION (USD) per season.
And that budget wasn't supported by any sponsorship because of a lame-brained idea they could pimp Google's environmental initiative during the 2007 season.
That cost hundreds of millions that was unrecoverable via sponsorship that normally would have been part of the '07 livery.
Posted by: Marc | Dec 6, 2008 8:43:02 PM
Everyone of those comments are great I agree with everything said so far. Keith yours are dead on.
The upside of all of this is that fans and racing will have to be the focus going forward for nascar to survive. No more lip service while fans have it jammed up the backside. Car building will change (in Nascar) if they want to cut costs, dont have 43 teams all building their own chasis, bodies and engines. have one or two and cost share. The big three pulling out may not be bad for the fans. The days of people watching Nascar and pulling for a manufacturer are gone unless you work for the big three.
There have been so may variables thrown at teams in the last two years (ie COT) and very few figured them out. If all the other teams have time to catch up with what they got, competition will imporve. I have always been a fan of driving not car technology. Thats what drag racing is for.
Posted by: Bob | Dec 6, 2008 10:59:50 PM
ok so you are saying if the big team can't make it with equipment and expenses to a track like cali for instance, but some little guy is gonna be able to tow out there for the race ??
indy was great in the good ol days when a team owner, really just the car owner, built the car in the garage in his backyard.
then him and his cousin and the kid next door piled in the pickup with an open trailer and drove cross country to sleep in a cheap motel with 5 other guys cause they LOVED the competition and hangin around for a month with the same ol guys.
daytona 2010 might be interesting with 13 funded teams and 30 morgan shepard level teams. think of the cautions needed to keep them within 8 laps of each other.
Posted by: exile on main street | Dec 7, 2008 2:45:03 AM
if the tracks are bank financed at 120,000 fans buying tickets and corporate sponsorship for everything from trash service to product signage, how does the owner pay the mortgage when 40,000 fans buy tickets and no sponsor money shows up ??
Posted by: exile on main street | Dec 7, 2008 2:52:19 AM
Keith: Congratulations for knowing what I was going to write before I did. As a retired NCO, you should know what they say about anticipating the command of execution. Then again, maybe I was too abstruse. But I could have sworn I mentioned that I suspected there would be a 2009 NASCAR season, no matter what. The upshot is, about the only difference I can see in what I wrote and what you wrote is that I don't think it's a "so what?" issue.
Paul: Concur on all points. Well presented. I don't know of any right-minded person who wouldn't be tickled to see a lot of excesses reined in, especially in the sports and entertainment businesses.
Canucken: Government meddling in the free market is never a good thing. One of my favorite Ronald Reagan quotes: "The nine most fearsome words in the English language are, 'I'm from the government, and I'm here to help.'"
#5: A wise professor told me the most important thing one learns in college is about oneself. College is about a lot of things. It can (should, in my opinion) be about sports, too. Too bad state and federal legislatures don't do half as good a job business-wise as just about every director of athletics in the country today. Last time I checked, none had asked for a bailout.
Marc: It's 1:55 a.m. CST, and except for your "history, toast and hasta-la-bye-bye" assertion, I can find no report anywhere on the Internet that Toyota has quit F1.
Bob: This comment from F1 majordomo Bernie Ecclestone, in case you missed it: "We are in the business of entertainment and we should be building race cars to race." You, Bernie and I all agree that high-tech marvels don't make for good racing.
Posted by: David Green | Dec 7, 2008 3:33:14 AM
David, while never a big fan of Reagan, I did think that that was an awesome thing he said. However, I do still believe that if the big 3 really are in as bad shape as they claim then giving private entrepreneurs (Roush, Hendrick,etc.) millions of dollars for entertainment and not actually running their business then a stipulation like that isn't unreasonable. The money that GM, Ford and Chrysler get for the teams doesn't benefit those companies in any engineering or design form whatsoever and has nothing to do with the vehicles that they put out. Still a damn funny thing he said.
Posted by: canucken | Dec 7, 2008 11:17:26 AM
Canucken: Any money the Big 3 get from the government will have plenty of strings attached to it, I'm sure. Here's another quote I'll try on you: "The times, they are a-changin'." -- Robert Allen Zimmerman (aka Bob Dylan)
Posted by: David Green | Dec 7, 2008 12:18:31 PM
reagan like bush is another aw shucks i'm just another one of them regular ol hard working folk like y'all canidate and the american public loves that bullshit.
they're real love small government and low taxes kinda guys.
the reality is they spend like crazy on nothing that does any good for the country.
and, with low taxes there's never enough income to cover their wild spending.
spend and leave the problems to the next president. ya gotta love those rich republicans who just want to serve their country and save your soul.
Posted by: exile on main street | Dec 7, 2008 2:00:33 PM
exile, when taxes drop government always winds up with more revenue.
David, you're overselling the threat to NASCAR programs posed by ther Big Three's troubles, which are not their troubles as much as the UAW's troubles - the "bailout" they're seeking is for the UAW.
We willl have a 2009 NASCAR season and the Big Three will provide support for teams.
Posted by: Mike Daly | Dec 7, 2008 3:14:59 PM
Fan #5, when oil hits $11.00 a barrel customer spending on gas will increase.
Posted by: Mike Daly | Dec 7, 2008 3:17:11 PM
exile, when taxes drop government always winds up with more revenue.
yeah, it's the old idea that if the rich gets off easy they will be so happy they will spread the new found tax savings to the little people. i think most of us realized years ago that little trickle down the leg of the rich guy drys up long before it does anyone one bit of good.
Posted by: exile on main street | Dec 7, 2008 3:40:02 PM
I thought this was a site that celebrated racing but I suppose in the off season even reasoned thought takes a brake.
Exile you might want to pick up your eighth grade history books again. The Presidency is not a 4 yr King position. That position is not a top down orders job. In actuality, the presidency when it comes to economics and domestic policy is designed to act as a stop gap measure. 100 senaters can stop 435 congressmen and One president can stop the actions of all 535 members of the house who, in the name of fairness, want to take money back to their district. If you look in your wallet its contents have not grown because a millionare is now suffering. Somebody other than you or I will get what the government wants to control. But God help us when in the name of fairness they come after you to "help" the less fortunate. I would assume that at that and only that point will it no longer be a good idea for government to decide if the way you live is fair.
Posted by: Bob | Dec 7, 2008 4:40:44 PM
that is a big assumption.
the president is only held accountable by you if he is a democrat.
if he is a republican it's always somebody else like congress that goofed things up.
nobody is telling fat rich folks how to live (scaring people did work for 7.5 years) just asking them to not be so freakin greedy to the point that everyone else suffers to the max.
yeah, well god help us if we continue to allow the rich to not be involved in the country except to squeeze it for every dollar they can get out of it.
to say bush was just hangin around and didn't push his agenda to a 100% success rate isn't true.
Posted by: exile on main street | Dec 7, 2008 5:06:16 PM
But God help us when in the name of fairness they come after you to "help" the less fortunate.
Posted by: Bob
i'm guessing being a self-centered human being works for you so far, huh ??
Posted by: exile on main street | Dec 7, 2008 7:15:42 PM
2008 F1 team resources
Including sponsorship, supplier deals, prize money, team owner contributions, tyre provision and supply of customer engines where appropriate.
Toyota: $445.6m
McLaren: $433.3m
Ferrari: $414.9m
Honda: $398.1m
Renault: $393.8m
BMW Sauber: $366.8m
Red Bull Racing: $164.7m
Williams: $160.6m
Toro Rosso: $128.2m
Force India: $121.85m
Super Aguri: $45.6m
Total: $3,073.45m
Posted by: exile on main street | Dec 7, 2008 7:21:48 PM
Exile every one of your posts is just another example of your utter ignorance of reality. The people that raised you have failed you. You will never understand liberty.
Clarance Thomas, Barak Obama, Condelsa Rice and Opra Winfrey have one thing in common and that is that not one of your vacuous thoughts or a government program got them where they are today. But in your world there would only be three people on that list because, the wealthiest, Opra would have had to have her money taken from her because of her unfair greed. But oh yeah what about the countless people she has helped by employing them and through charity. The ecomomic boom during the Clinton years would have never happened if you were able to slash the greed of that monster of all greed Bill Gates. The thousands of millionairs that were created as the result of Microsofts work had nothing to do with government. Although you may have a point Russia and China dont have that problem.
When you wake up in the morning coveting your neighbors goods you might want to ask yourself what self centered really means. Im my world its when someone looks at their own pathetic life and blames all of its problems on someone else. My problems are mine and mine alone and it is not yours or anyone elses to solve with Opra's money.
There was a time in this country when racing fans went to the track with pride in the auto industry displayed in front of them. Now the evil bastards have corporate jets and are asking for hand outs. Ill bet Toyota has jets too and they gave F1 445.6m in play money and their employees arent losing their jobs. Whats even worse it that they are still profitable. This must be stopped now its unfair.
Posted by: Bob | Dec 8, 2008 3:55:08 AM
Mike: You and Keith should read more carefully, or else I should write more clearly; I'm not sure which is the problem.
Nowhere, in any way, shape, form or fashion, did I suggest racing is going to go away. I pointed out that racing survived the Great Depression. I think you're overly optimistic about Dodge, Ford and GM remaining able to have a substantive presence in racing. You could be right, but even if not, I outlined a variety of alternative consequences should the participation of the Big 3 cease, including the possibility that there would be positive effects.
But the fact remains that when there is a change of such magnitude, there are going to be proportionally dramatic ramifications. The effects are going to be even more dramatic this time than they were in '71, when Winston stepped in to immediately fill the void left by Ford and Chrysler.
Even if a such a Sugar Daddy source of revenue could be found now, its integration into the sport would constitute a change of historical significance.
Bob: Does the phrase "casting pearls before swine" ring a bell? Save your breath.
Posted by: David Green | Dec 8, 2008 4:17:52 AM
David, you need to give me a little wiggle room here. Go back and look at the time on my post. I woke up had to pee and couldnt get back to sleep. I liken this to practicing your golf swing at the driving range or at home. Your really not up against anyone of talent, your just honing your skills for the real world. Im just working on my putting here. Thanks your point is well taken though.
Posted by: Bob | Dec 8, 2008 9:36:05 AM
exile, better re-learn basic economics - it has been shown over and over by experience that government takes in more revenue when taxes drop.
David, thank you for the clarification. I don't doubt that there will some form of cutback in the Big Three's racing endeavors, but right now I don't see any serious cut in their Winston Cup programs - whether that will last beyond 2009 is something else.
Posted by: Mike Daly | Dec 8, 2008 12:13:24 PM
"When you wake up in the morning coveting your neighbors goods you might want to ask yourself what... etc."
wow
you're such a presumptuous little bitch.
"casting pearls before swine"
oops
you too.
"oh dave, I woke up had to pee."
thanks for sharing your toilet habits.
y'all really have a problem with somebody who doesn't agree with you 100%.
too bad.
it's funny when even Mike Daly has more thoughtful ideas than you two.
Posted by: exile on main street | Dec 8, 2008 9:21:33 PM
Bob: Good stuff! Wiggle room granted. Take as much as you need.
Mike: Glad to help. For what it's worth, you might want to consider my advice to Bob regarding the presentation of things of value to those who are incapable of comprehending or appreciating them.
Posted by: David Green | Dec 9, 2008 1:25:03 AM
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