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Archive for the ‘Racing’ tag

NASCAR: How much bang does Caterpillar get for its sponsorship buck?

Caterpillar is among the prominent NASCAR sponsors that have to be asking themselves how much they really need to spend keeping racing teams afloat, especially in light of this Forbes magazine article highlighting just how far NASCAR has fallen from fan favor in the past five years. The woes: Cars look the same. Drivers look the same. Races look the same. And NASCAR is tightly controlled by the family that owns it.

Says the three-time reigning Sprint Cup champion Jimmie Johnson: “The best thing to be is NASCAR, the second best a driver and the last thing a team owner.”

Team owners assume the lion’s share of the risk by investing heavily in people and equipment but get a pittance from broadcast revenue and none of the ticket sales, which go mainly to the track owners. It can cost $10 million to recruit a winning driver and $25 million a year to race one car. Most teams raced two or three last year, and 90% of their operating budget came from corporate sponsors. The rich sponsorship deals signed during the fat years earlier this decade are expiring, and new sponsor money is drying up. Domino’s Pizza, a primary sponsor of Michael Waltrip Racing, and Eastman Kodak, a sponsor of Penske Racing, threw in the towel after last season. Also gone are Coors Light and Tide.

Sponsors still committed to the sport, such as Caterpillar, Diageo and UPS, are flocking to winning teams or spending their money at the track. Winning brings in money, and the money funds the ability to win. The haves are pulling away from the have-nots. The four richest racing teams filled all 12 positions in the sport’s Chase for the Cup playoff format last year. Most of the 43 drivers at this weekend’s Daytona 500 will start their engines knowing they have a slim chance of cracking the top 10. Some won’t even bother to complete the race.

Teams are folding, merging or taking bailouts from plutocrats. Seven-time NASCAR champion Richard Petty sold his Petty Enterprises team last year to the private equity firm Boston Ventures because he could not raise enough sponsor money. (Boston Ventures recently sold Petty’s name to the team owned by multimillionaire businessman George Gillett.) In 2007 Jack Roush sold half of his team to Fenway Sports Group, a firm controlled by the company that owns the Boston Red Sox. Morgan-McLure Motorsports shut its doors last year after 24 years on the circuit because of a lack of sponsors. Ditto Bill Davis Racing.

Team owners want a franchise system like pro baseball and football teams have. NASCAR says no dice. Sponsors have lots of sway in pro racing … can’t help speculating that Cat and its brethren might have something to say about whether the team owners get what they want.

Cat sponsors Richard Childress Racing with Jeff Burton in the No. 31 Chevrolet. Cat’s racing page is here.

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Tom Mangan posted at 6:15 am February 10th, 2009 |

Caterpillar ends sponsorship of drag-racing team

Caterpillar pulled the plug on David Powers Motorsports because the National Hot Rod Association team was in over its head and might have collapsed in mid-season.

Racing writer Jane Miller of the Peoria Journal Star interviewed Rod Fuller, one of the team’s top drivers, who finds himself out of a job with the racing season about to begin.

Fuller said he has been contacted by other teams but wants to remain with Caterpillar.

‘I purchased a chunk of Cat stock (last) year,’ he said. ‘I believe in the company and have researched it. I think I know as much about it as any employee and I take pride in that and I’m not ready to walk away from it.’

Let’s hope he bought in October when it was cheap. Gonna be awhile before it gets back in the 80s again.

Growing up in Peoria, I heard a bit of grumbling from Cat folks about a tractor company putting the fruits of their labor to work bankrolling race cars. It’s not like an equipment purchaser in the grandstand is going to see that yellow logo flashing by and say “screw Komatsu, I need me a Cat.”

Looks like this shutdown wasn’t so much about the economy as the missteps of Fuller’s racing team, which is selling off its drag-racing assets.

David Powers Motorsports is selling its Top Fuel and show car program assets. The racing assets include two complete Brad Hadman race cars, 12 sets of cylinder heads, seven short blocks, a 2008 Caterpillar-powered Kenthworth tractor, and Competition Trailerstransporter.

Wow, that would be fun stuff to have, assuming your garage is big enough.

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Tom Mangan posted at 7:54 am January 8th, 2009 |