Reluctant NASCAR Sponsors Lead To Layoffs, Soul Searching For Workers
NASCAR is coming off its most successful season in recent memory. The championship came down to the last lap of the last race. TV audiences got bigger for the first time in several years. But when it comes to sponsorships, NASCAR teams are struggling. And that lack of revenue has once again led to something that's become all too familiar to NASCAR workers: layoffs. A month ago, after the last race of the season, Tony Stewart had just won the 2011 title. And he was thankful. He listed many of his sponsors, such as Office Depot, Mobil 1, Chevrolet, US Army, Tornadoes, Quicken Loans, GoDaddy, Ritz, Oreos, and Coca-Cola. Without all those sponsors, Stewart wouldn't have enough money to race. Yet even Stewart, the series champion, needed more time than usual to secure sponsors for next year. NASCAR's Jill Gregory, who helps teams find sponsors, admits her job is difficult these days. "Given the economic times, companies are just having to be very prudent and take some time to really figure out what they want to do with their marketing dollars" Gregory says. She points out that no sport is more closely tied to the success of its sponsors than NASCAR. After all, teams use those dollars to fund most of their operations. But as the economy has suffered and companies have slashed marketing budgets, fewer companies are willing or able to sponsor a top level team. Teams used to get $25-$30 million from a primary sponsor. Now, it's more like $18-$20 million, says John Driscoll with the motorsports marketing company JMI. "The sport did get expensive," Driscoll says. "Costs rose. And I would liken it to the housing market where the cost of housing to the point where there's been an adjustment." Driscoll says companies that signed big contracts before the recession hit are, in some cases, leaving NASCAR now that those deals are up. NASCAR has implemented several cost-saving rules, such as the elimination of on-track testing, to help teams get by with less. Teams are taking their own steps like reducing worker pay and benefits. They're also cutting jobs altogether. Roush Fenway Racing, home of Carl Edwards and Matt Kenseth, laid off workers a month ago. The team won't give specifics but there are reports the layoffs totaled 150. "It's an unbelievably tough situation," says Steve Newmark, the president at Roush Fenway. "And I think it's something that you have to do with care and sensitivity because everyone of these people this was their job and they put their blood, sweat and tears into it and we have a great appreciation for that." It's hard to say just how many NASCAR workers have been laid off. Teams don't usually disclose their cuts for fear of bad publicity. NASCAR doesn't keep track of - or at least make public - those records, either. Talk to a higher-up in NASCAR and they'll tell you this: Yes, there are sponsorship issues. But for the first time in a few years NASCAR has some momentum. TV ratings were up. It will take time for sponsorships to catch up, but there is reason to be optimistic. But it's also clear NASCAR is a shrinking industry. Scott Ward of Troutman can tell you that. "I've never seen so many people out of work and so many teams shut down in one year - until this year - in my entire career," Ward says. Four years ago, Ward was making over $100,000 as a tire changer for Chip Ganassi Racing. Ever since, his career has been a cycle of contract work and layoff notices. He says he makes half of what he used to. Now, he's collecting unemployment. Ward says it's a situation a lot of NASCAR workers are facing. (Pictured: Scott Ward getting ready to blow leaves on his roof.) "Maybe all they know how to do is paint a car or be a mechanic.," he says. "And they're a dime a dozen right now, out of work. If you don't know people or aren't in the right clique, you're not gonna get a job. So how do you support your family?" Ward says morale among workers is terrible. If an employee is lucky enough to get called back to work, they might be asked to take a significant pay cut. He's also sick of the backstabbing he says takes place as co-workers try to protect their jobs. At 34, Ward has had it. He wants to quit the industry and find more stable work, even if it means less money. And while those way up the NASCAR food chain say it's only a matter of time before more sponsor dollars make their way into the sport, few would be willing to say that Ward is making a poor career move.