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Friday, October 17, 2008

Tough economy hitting DEI, many other NASCAR teams

Anyone who’s watched the news in the past few months knows the U.S. economy isn’t exactly in a good state. Layoffs are affecting thousands as the end result of a number of crises in the housing, credit and stock markets. Meanwhile, people are seeing all the money they’ve earned through investments over the years go down the toilet.

When it comes to teams of NASCAR, the effect of this economy is widespread and cannot be ignored. Teams can no longer take for granted that sponsorship will be out there, as firms are tightening their budgets to weather the economic storm.

A few of the many noticeable effects include:
-- Petty Enterprises driver Bobby Labonte still has no 2009 sponsor, and he’s a former champion.

-- Michael Waltrip Racing has returned the #44 to the Petty them, and will run only two cars in 2009, the #00 for David Reutimann and the #55 for Michael Waltrip. Michael McDowell is now officially out at the team.

-- Yates Racing has had to cobble together dozens of different sponsorship deals this year for its drivers Travis Kvapil and David Gilliland. They’ll get some guaranteed money next year when Paul Menard comes over with his dad’s sponsorship, but the other teams are still looking.

-- The Nationwide Series is full of cars that lack sponsors, and half of the ones that do have sponsors are driven by Cup drivers. The series has really become somewhat of a joke. Solid Nationwide drivers like Mike Wallace and Bobby Hamilton Jr. are severely lacking in sponsorship for next year.

-- There have been a ton of merger rumors this year … involving the GEM, Petty, DEI, Ganassi and Robby Gordon teams, among others. It’s getting pretty hard to make it on your own as a smaller organization. It’s inevitable that one of these mergers will happen, as it will become an economic necessity.

-- Even the big stars are having to split their seasons between sponsors because companies don’t want to commit the big bucks to a whole season during this economic downturn.

Perhaps the organization in the most trouble in NASCAR is DEI, which currently has four teams running, but little hope they can continue with that setup in 2009.

Martin Truex Jr. is their marquee driver, and has sponsorship for 2009, but has only a one-year deal and could bolt after 2009. The #8, #15 and #01 cars currently have no sponsorship set up for 2009. Regan Smith will be out of a ride unless some sponsorship comes through very quickly, and that team’s owner points will likely be sold to Clint Bowyer to be used for the fourth Richard Childress car. Aric Almirola has shown flashes of talent, but without sponsorship he may not be given a chance to show what he can do.

DEI‘s Max Siegel optimistically said: “Our intent is to run four cars again next year … but we are going to be fiscally responsible. … We’re wide-open as to how we can sustain a healthy race program. … Everyone is on pins and needles, trying to figure out what the future may bring.”

That’s code for the crap may hit the fan here very shortly. Rumors that 80 DEI employees may be cut are being denied by the team.

Siegel added: “We have no imminent plans to lay off any people or shut down any of our race teams.”

Imminent is the key word in this quote. That means he knows that while it’s not the plan now, lack of sponsorship may force at least one of the teams to shut down and people will have to be fired.

In the long run, it’s probably for the best. For a team that’s struggling as much as DEI, there’s no logic in running four teams. They need to get their ducks in row and get a couple teams running well, then expand up to a larger operation once they’re in a better spot competitively.

Regardless of what happens at DEI, it’s clear they’re far from the only team suffering from this economic crisis. If this keeps up, there may be a lot of blank cars making their way around the tracks next season.

Waste of our money
David Gilliland will have the government sponsoring his car three times before the year ends , as the Federal Communications Commission (FCC) will advertise the upcoming switch to digital TV, which takes place in February right around the time of the Daytona 500.

So let me get this straight … the government is more than $10 trillion in debt, and they decide to have the FCC spend hundreds of thousands of dollars to make sure people can watch television next year? Beyond this, there are incessant TV commercials about this switchover that I’m sure we’re all paying for.

If there was a gold medal for wasting money, the clowns in D.C. would win it by a mile.

Johnson will continue hot streak
I have bad news for everyone battling Jimmie Johnson for the Cup. He’s going to win at Martinsville and expand his lead. If Jeff Burton or Greg Biffle can hang with him, they’ll be doing a great thing for their chances. But barring someone knocking Johnson into the wall, I don’t see how he’s going to be kept from another dominating performance at a track where he’s always run well, especially with the way his luck’s been lately.

2 Comments:

Anonymous Anonymous said...

Just why Bobby Labonte re-signed with Petty, was a move that I couldn't figure out at the time. It looks even stranger now. How many more good years doe's he figure he has? It looked to me like he could have done better in the first place. He gave them plenty of time to prove themselves, & they haven't. Why devalut himself by staying longer?

dawg

October 18, 2008 at 6:35 AM 
Anonymous Anonymous said...

What goes around comes around. You reap what you sow. Max and Teresa made the decision to get rid of Junior and are now seeing the downline consequences of that decision. The price they wanted Junior to pay for the team that his dad had established for him was supposedly $50-70 million. It is worth a fraction of that now. Watch for Junior to buy this for a song.

October 20, 2008 at 6:46 AM 

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