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SBJ/September 17 - 23, 2001/Marketingsponsorship
Its up to the sponsors to take silliness out of the silly season
Published September 17, 2001
NASCAR's "silly season," when rumors fly about drivers changing teams, is running at top speed this time of year. It happens every season, but it seems to start earlier and involve more drivers every year.
At least 12 NASCAR Winston Cup drivers — John Andretti, Jerry Nadeau, Mike Skinner, Robby Gordon, Joe Nemechek, Tony Stewart, Stacy Compton, Mike Wallace, Matt Kenseth, Buckshot Jones, Jeremy Mayfield and Andy Houston — most of whom have national marketing programs attached to them, are reportedly contemplating changing teams, and there's still 30 percent of the season left to go.
In many cases, when drivers play musical chairs, sponsorship programs can be thrown into chaos.
How would national advertisers and sponsors doing business in the NBA react if there were doubts every year as to whether the Houston Rockets, Atlanta Hawks, Seattle SuperSonics, Charlotte Hornets or L.A. Clippers would be in the league? Probably not well. So why should NASCAR sponsors put up with it? And what can they do about it?
The NASCAR business model is different from that of the stick-and-ball leagues. The more traditional leagues demand high investment fees and maintain strict controls over franchises. In return, the franchises receive shared income from league resources such as the sale of marketing and media rights, plus ticket income and other revenue. Under this shared-revenue model, mediocrity on the field or in the management suite can be rewarded.
NASCAR's success, however, depends on its independent teams' abilities to acquire and manage substantial financial support. Each team's survival is directly related to its ability to do these things. And by extension, NASCAR's success hangs in the balance.
Top drivers in the sport, such as Jeff Gordon, Dale Jarrett, Bobby Labonte, Jeff Burton, Mark Martin, Rusty Wallace and Dale Earnhardt Jr., have long-term relationships with their teams and sponsors. These drivers return value to the sponsors and, in return, the sponsors build the drivers' names. The relationship is stable, and it allows the sponsors to extract maximum value from their investments. Plus, the team owners can afford to put a fast car on the track and a good team around it. Everybody's happy.
Sponsors that are eager to succeed in NASCAR would do well to watch how DuPont, UPS, Miller, Budweiser and Valvoline activate their NASCAR sponsorships. They achieve positive results through different paths. And you don't hear much about them during the "silly season."
Unsuccessful teams point fingers at these teams, saying they are successful only because they're well-funded. It's true they have the resources to get the job done. But money alone is no guarantee of success. The best teams manage those resources well and they're good business partners with their sponsors. The motorsports industry is full of teams that have adequate funding but lack business acumen, and it shows on the racetrack.
The "silly season" can destroy careers, sponsorships and teams. It's also a threat to NASCAR itself. But the culture of NASCAR is such that the onus for success will always be on the sponsors, teams and drivers to share success and failure together.
So it's up to the sponsors to take control of their programs. Yet many motorsports sponsors are passive about managing their investments. They're submissive to the teams, when it should be the other way around. After all, who's paying whom?
To become successful, NASCAR team sponsors must hold their teams to acceptable business standards, just as they would any other vendor. They should select a team owner they trust, build a business plan to properly leverage the investment, devote the proper resources to it, attach measurement criteria and provide the team a multiyear commitment so it can attract and keep the best talent, inside and outside the race car.
That way, the "silly season" can swirl away while the successful operations (drivers, teams and sponsors) quietly rise to the top through winning on the racetrack and in the supermarket.
Mel Poole (email@example.com) is president of Sponsor Logic, a consulting management and events agency.