The economy and Racing
07/08/2008
Where is it heading?
The Daytona results are now official: Robby Gordon is officially scored in 6th place, enduing up 30th in Driver points. He rose two spots in owner points to 31st. That guarantees the #7 a starting spot for a few more weeks.
I was reading again about the Ganassi/Sabates shutting down of the 40 team with Dario Franchitti due to lack of sponsorships. I also noticed that Helio Castroneves signed a contract extension with his IRL team over the weekend. I am sure he was watching as Dario is out of a ride, and figured now was not the time to switch to a Nascar ride. I also noticed that the TV ratings were down over the past few races.
That got me wondering about sponsorships, pay TV, the economy and racing.
As the economy slumps, fans aren’t going to as many races, ticket sales are down at most tracks. You could see the back stretch at Daytona was nearly empty. New Hampshire had tickets available at what has always been a sold out spring race. The fans are staying at home. I read somewhere a couple years ago; the average spending was about $1200 for a family weekend of racing. With fuel costs spiking, ticket prices climbing and hotel and camping prices following along, I am sure that figure has gone up.
I also saw that Motor Sports Authentics has dropped their prices on jackets by $30, Die Cast cars by $10 in their “Whip Inflation Now” Promotion at Daytona last weekend. I am sure the Merchandise business has been feeling the crunch.
With gas prices so high, jobs being lost and because the economy is in a slump, fans aren’t going to continue to pay for television when the budgets get even tighter. The economic news is still not looking good: more fallout from the banking/mortgage/fuel price crisis is expected to last another 9 months.
This puts the mid season racing in a bind: June 8th through August 31st are all on pay TV stations, that’s no free race broadcasts for 3 months. With the TV ratings sure to drop, as fans give up their pay TV, fan attendance dropping and budgets stretched to the max, the sponsors will be looking at a revenue drop. I am confident some of the companies are looking at the contracts they signed to see if there is a way out of them.
It’s getting awfully expensive to be a race fan. It’s getting awfully expensive to run a race team. It’s a nasty cycle. I don’t have an answer, but I sure have a lot of questions how racing will fair over the next 9 months. I am sure there are people that get paid a lot more than me have been crunching the numbers, looking at the projections and trying to figure this mess out.
