SBD/July 8, 2014/Leagues and Governing Bodies

Impact Of Race Team Alliance Within NASCAR Unclear Right Now, But Could Be Future Issue

Kauffman (r) could be viewed as the perfect face for playing hardball with NASCAR
The official formation yesterday of the Race Team Alliance, which is comprised of nine of NASCAR's top teams, was said to be a "cost-cutting vehicle," but the "ramifications could be far larger for NASCAR, which has been insulated from the market forces that have affected other sports with unionized players and franchised team owners," according to Nate Ryan of USA TODAY. Former Charlotte Motor Speedway President Humpy Wheeler in an e-mail wrote, "This is the first time since the Professional Drivers Association disbanded in the early '70s that NASCAR will see an organized group of car competitors. ... This group together will represent a powerful force that must be reckoned with by sponsors, NASCAR and the tracks." Ryan notes attempts at "organizing against the powers that be in auto racing rarely have ended well." The PDA "disintegrated" after NASCAR ran at Talladega Superspeedway with "replacement drivers, and any whisper of a union since then has been greeted with great trepidation." NASCAR seems a "long way from any sort of civil war." However, the "timing of the RTA -- six months before the beginning" of NASCAR's new 10-year, $8.2B TV deal with Fox and NBC -- "smacks of a power play, and its release highlights building revenue as one of its objectives." Michael Waltrip Racing Owner and RTA Chair Rob Kauffman "downplayed that ... noting there are ways to generate cash without taking it." Kauffman could be "viewed as the perfect face for playing hardball with NASCAR," as he is "accustomed to playing high stakes and can get his hands dirty in a way that wouldn't work" for team owners Roger Penske and Rick Hendrick (USA TODAY, 7/8). In Charlotte, Jim Utter notes the formation of the RTA brought "mixed reaction from the sport's manufacturers." Ford Racing Dir Jamie Allison in a statement said, "The betterment of the sport is the responsibility of all stakeholders, including NASCAR, manufacturers, teams, tracks and sponsors as all of us ensure the sport remains relevant to our fans." Reps from Toyota and Chevrolet said that their respective manufacturers had no comment (CHARLOTTE OBSERVER, 7/8).

GROUP EFFORT
: Kauffman said the "key word" for the RTA is "collaboration." Kauffman: "No one is looking to do any kind of big fight or controversy. This is really about everyone trying to work to together to just promote and enhance the sport." He said fans should see the RTA as a way for teams "to just be stronger." Kauffman: "To the extent the teams are more secure in their long-term future and have better business models, I think it just makes the sport stronger where you can really afford to invest for the long-term, not just trying to survive year-to-year" ("NASCAR Race Hub," FS1, 7/7). Kauffman said there is "no specific catalyst that really created it now," as the RTA has "really been a long time in the making." He added, "This really just formalizes something that was in the works for some time." Kauffman said NASCAR officials are "fully aware of what we're doing," as he has been in "communication with them." He noted that the RTA hopes to "bring in the rest of the full-time garage members in short order" ("NASCAR America," NBCSN, 7/7). Kauffman, on the RTA's structure and staffing, said, "The last thing you want is a lot of bureaucracy. But we'll probably need a helper or two. We'll probably lean on the teams that have big organizations with CFOs and marketing/communications departments. We'll divide it into working groups. We'll have a communications and marketing working group, an economic working group, a competition working group. We'll have members in each of those that can work on issues and kick it back with a recommendation." Asked if teams will essentially open their books to each other, Kauffman said, "I don't think anyone is going to swap profit and loss statements, that's not necessary. ... It will require collaboration, but that's the whole point. We're not asking what right-rear spring rate they're running. But at some point, it might make sense to coordinate parts and equipment" (USATODAY.com, 7/7).

SEEMS TO MAKE SENSE
: FOXSPORTS.com's Tom Jensen wrote against a "backdrop where even some of the sport's most successful teams didn't make it or have severe problems, collaborating for the overall health of all seems on the surface of it to make all the sense in the world" (FOXSPORTS.com, 7/7). Jensen added, "It's guys trying to use their collective power ... ultimately to create value for their businesses. Right now, all their business is worth is how ever many sponsor dollars they have feeding into the kitty. If you lose your sponsors, all you have is a building and bunch of tools that are worth 10 cents on the dollar. They want to create, I believe, a more permanent value for their businesses" ("NASCAR Race Hub," FS1, 7/7). USA Today's Ryan said since the RTA involves all the "heavy hitters in NASCAR," it "sends some big waves through the garage." NBCSN's Ricky Rudd said the alliance gives some "stability for the future of the sport." Rudd: "The common goal is to make the sport better, and that's what this should hopefully accomplish." NBCSN's Bobby Labonte: "It's a step in the right direction" ("NASCAR America," NBCSN, 7/7).

CHANGE IS GONNA COME: SPORTS ON EARTH's Matt Crossman writes it is "way too early to know whether RTA will work, but this much is obvious: Change is needed, and soon, or more teams will disappear." Already this year, the Sprint Cup Series raced at Kentucky Speedway with 42 cars, "the first time a race didn't have a full 43-car field" since '01. It is "easy to imagine the RTA eventually battling with NASCAR over TV contracts or the race schedule or other issues, but Kauffman beat down any speculation that cast this as RTA vs. NASCAR." If that "holds true, RTA will be a refreshing change from the NASCAR-bashing approach, no matter how much the sanctioning body may deserve it." An organization like RTA has been a "long time coming, as NASCAR teams became more sophisticated" (
SPORTSONEARTH.com, 7/8).
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