SCRAMBLING: Economy hurting NASCAR sponsors

RICHMOND, Va.

Nearly a third of the way through the NASCAR season, a number of Sprint Cup, Nationwide and Truck series teams are still scrambling to secure sponsors in an effort to make it through the season.

Team representatives are busy negotiating and renegotiating deals to keep their cars and trucks on the racetrack.

For Jimmie Johnson (Lowe's) and Jeff Gordon (DuPont), sponsorship isn't an immediate problem, but even their primary sponsors are trying to calm the fears of anxious shareholders as stock values decline.

DuPont, the giant chemical company, last week reported a 59-percent decline in first-quarter earnings, citing the global economic downturn. It said that reduced demand will force additional cost-cutting measures and require a broader range of restructuring proposals.

But a company spokesman declined to say how this latest news will affect its sponsorship agreement with Hendrick Motorsports and Gordon's No. 24 Chevrolet. Hendrick Motorsports and DuPont last year agreed to a two-year extension through the 2010 season. DuPont teamed up with Hendrick Motorsports and Jeff Gordon for the final race of the 1992 season with the then newly formed No. 24 Hendrick Motorsports race team and have since competed in every Cup series race.

"This sponsorship is a perfect match for a company as large and diverse as DuPont," said David Bills, a DuPont vice president. "NASCAR's overall communications reach is impressive, but the DuPont brand enjoys even higher visibility because Jeff and the No. 24 DuPont Chevrolet figure so prominently in so many races."

While DuPont officials decline to comment on the possibility of future deals, there's speculaton that the company might consider pulling its NASCAR deal when it expires, following GM Goodwrench, Tide and Kodak. Aflac, 3M and Crown Royal are considering splitting their sponsorship deals with Roush Fenway Racing next season.

"I would agree that we're probably in a better situation than some other teams," Johnson said earlier this year. "The economy has changed the way a lot of companies do business, but most of our sponsors are confident that NASCAR is a solid investment."

On the flip side, many teams trying to make the 43-car field each week are finding it increasingly difficult to compete for sponsorship dollars. Many are without major sponsors, including A.J. Allmendinger.

Allmendinger, though 27th in points heading into last night's race at Richmond, has been surprisingly competitive this season. He has two top-10 finishes in six starts -- including third at the Daytona 500.

Allmendinger didn't expect to find himself in this fix, particularly as a team member of Richard Petty Motorsports.

"It's been a challenge, but we're making progress," Petty said.

Petty Holdings merged with Gillett Evernham Motorsports, creating a four-driver team that also consists of Kasey Kahne, Elliott Sadler and Reed Sorenson. Kahne and Sadler have lucrative deals with Budweiser and Best Buy.

There were nearly 20 NASCAR teams without major full-time sponsors as of Thursday. Cup drivers Joe Nemechek, Dave Blaney and Scott Riggs are among them.

"In good times and bad, there are teams with part-time sponsors -- that's just the nature of this sport," said Andrew Giangola, the director of business communications for NASCAR. "Certainly, the down economy puts more pressure on teams than when the (Gross Domestic Product) was booming, the housing market expanding, credit freely flowing, and more Americans employed."

NASCAR works with a marketing group that helps Cup and Nationwide teams solicit sponsors. Because NASCAR teams are independent contractors, they sell their own sponsorships. Giangola said that Cup and Nationwide teams aren't required to report their sponsorship status to NASCAR.

There are 400 sponsors involved in NASCAR at various levels, in part, because it works.

"The cars are rolling billboards, resulting in very high sponsor awareness among fans," Giangola said.

"Beyond that, race fans are loyal to the sponsors on the car -- they consciously support those companies investing in the sport they love to ‘help my drivers go faster.'"

Giangola said that research shows that NASCAR fans are three times more likely to purchase the products and services of NASCAR sponsors vs. companies not involved in the sport. He added that NASCAR fans vote with their wallets.

"That's very powerful to companies, particularly in a down economy where every marketing nickel has to produce a return," he said. "NASCAR produces these measurable returns. While many pundits predicted short fields this year, we feel very good about the way sponsorship has held up."

■ Ralph N. Paulk is a writer for the Richmond Times-Dispatch.