It was like throwing a fish you didn’t want off the back of the boat.
While most NASCAR teams waited until today – ‘Black Monday’ – to start releasing crewmembers, some organizations actually made the cuts in the back of their team
haulers during the championship weekend at Homestead-Miami Speedway.
Guess they just wanted to get a jump on things.
Actually, some organizations pulled the trigger earlier last week - Dale Earnhardt, Inc. got the ball rolling last giving 116 associates the boot - firing the first shots in what will be a huge bloodletting this week.
With the economy in the tank and teams bloated with overhead on all levels, NASCAR teams will be shedding the easiest asset to get rid of – people or ‘two-legged’ inventory. The estimates of the firings range as high as 1,500 employee dismissals this week. It’s only going to get worse today.
If there was ever any indication that NASCAR was struggling, the ‘downsizings’ and ‘corrections’ as the firings are being euphemistically called, are proof positive that there’s trouble in River City. Strip away the veneer - that a lot of people are getting canned - and the warts of the sport begin to start showing.
It’s little wonder people are getting the hook. NASCAR has just posted one of its most abysmal seasons. Interest in the sport waned as ticket sales and television ratings were flat or off of 2007 levels. Even the Chase – NASCAR’s ‘playoff’ system for the Cup divisions, struggled to attract attention with no sellouts and just two of the events (New Hampshire and Kansas) posting higher television viewership than its 2007 races.
The television numbers are revealing. Yeah, the economy is tough, but the cost of plopping the family on the couch with a couple bags of chips and watching the race is pretty minimal. Given the ratings numbers, it is clear fewer folks aren’t doing that and points to problems way deeper than whether sponsorships are tight or teams are saddled with excesses like too many employees.
Simply stated, the product at the most visible level – the Cup Series - isn’t compelling.
The top stars - Jimmie Johnson and Carl Edwards are nice guys, but they're not exciting despite the backflips. Tony Stewart and Jeff Gordon are the 'old guard' now, veterans long familiar to us, their stock slipping with winless campaigns drawing fewer new fans. The posterboy for the series - Dale Earnhardt, Jr. - was never a factor all season with his new Hendrick Motorsports 'superteam.'
Only Kyle Busch connects in a big way - good or bad - with all the fans.
All of them are isolated, no longer available to the fans. Fame has made them prisoners no longer capable of having a common life, no longer able to join the fans for a beer and a game of pool at a local bar without being mobbed. Or Paparatzied.
Fortune has also placed them above the crowd, hiding in million dollar motorcoaches, flying their own helicopters and jets to and from the race track and lucrative corporate appearances.
To say there's been a disconnect between the racers and the fans -especially on a personal contact level - is an understatement. Their worlds rarely intersect anymore.
Competitively, while we applauded the introduction of the COT as a safety initiative, the car has turned out to be a dud on the racetrack and a huge boondoggle financially for the teams. Rushed into competition, the COT was not fully developed and the results showed on the track as Cup races have become parades with the leader – in clean air – rarely threatened. Side-by-side racing, especially in the turns, is even more unusual. Once one of the most exciting sports on the planet, Cup races are now four-hour parades of boredom occasionally punctuated by some racing and pit stop contests.
Meanwhile, the cost of making the COT competitive fell to the teams. Team budgets swelled to the $25-$30 million mark, an amazing figure considering they were in the $5 million range just a decade ago. Because of the COT not being fully ready to race when it was introduced, teams have had to spend millions of dollars in research and development engineers, additional mechanics, test teams, and all the equipment needed to power them.
If teams are overstaffed these days, the introduction of the COT is surely one of – if not the primary – reason.
NASCAR must feel the car is now at full potential as it announced last week that it would ban testing at all NASCAR race sanctioned facilities in 2009. Even the preseason testing at Daytona has been scrapped.
The testing ban, while well intended as a cost-cutting measure to the teams, will contribute to the mass firings this week. It’s an inevitable conclusion that if you are testing less (teams will still test at non-sanctioned tracks like Rockingham, Caraway, etc.), you will need fewer people to do it.
We’re good with that. It’s understood.
What we don’t understand is why we haven’t heard any announcements about cutting the number of races or laps in a race, restricting the number of tires a team can use during an event, limiting the number of cars a team can have in its arsenal. These would all be cost-cutting measures that NASCAR could implement without forcing teams to remove people from their employment rolls.
We also haven’t heard anything about cost-cutting initiatives for the fans like lower ticket prices, reduced at track parking fees, or concession cost cuts by International Speedway Corporation (ISC), NASCAR’s parent company and owner of 12 of the tracks on the circuit promoting half of the races on the Cup tour each season.
If those cuts were made, you can be sure Speedway Motorsports, Inc. (SMI), ISC's largest speedway ownership rival, would be forced to do the same. Lower prices would make the events available to more people.
Unfortunately, the bet here is you won’t see any of those changes soon. Maybe some ticket price cuts as there are bound to be plenty of seats available for races next season, but as long as NASCAR is still making gobs of money for ISC (over $39 million in the first three quarters of this year), public relations posturing, not real cost-saving change for teams and fans, will rule the day.
It’s estimated that there are more than 26,000 families in the Charlotte, NC area – the epicenter of the sport for NASCAR teams – who rely on the stock car racing sports/entertainment property for their primary income. This week, many of them will get the news that they are no longer employed.
It’s a sobering reality for those families, but it’s also sobering to think that in just a few years, NASCAR has gone from the darling of the sports world to just another property shuddering under the weight of questionable management decisions, bloated internal excess and
reeling from outside economic pressures.
It didn’t have to be this way, but when you dilute the top-shelf product with inferior competition and sell out the second-tier division (Nationwide) allowing it to be little more than a less expensive imitation of the primary product, people are going to lose interest – regardless of economic conditions.
Those economic conditions, along with massive industry layoffs, are the reality of the times as NASCAR limps into the uncharted waters of the 2009 season. It’s going to be an interesting journey, one that will unfortunately be made with fewer employees after this week and probably fewer fans after a less than compelling 2008 Cup season.