NASCAR’s surging success levels off

There are signs that NASCAR’s runaway prosperity and popularity are beginning to plateau.

DAYTONA BEACH, Fla. (AP) — If you’re looking for a sign that NASCAR’s sustained surge of success is leveling off, just ask veteran driver Mark Martin if he’d ever be interested in owning a racing team.

“I’m just not going to do it,” Martin said. “I’ve worked too hard too long, and I know all about this business. I owned a team, and I went broke in 1982. I know how this deal works, even when things look really good, like two years ago. Then you look at the climate of the sport today from an owner’s standpoint or whatever, and the climate is not so good.”

Sure, Fortune 500 companies will be splashed all over car hoods and fenders in Sunday’s Daytona 500. But behind those flashy corporate logos, there are signs NASCAR’s runaway prosperity and popularity are beginning to plateau.

Television ratings that leaped in recent years began to slip last season. And NASCAR officials are having second thoughts about a rash of recent major changes intended to make the sport more palatable to mainstream sports fans — moves that might have alienated the hard-core base.

Add in a U.S. economy that appears to be in a tailspin, and team owners are beginning to feel the pinch.

“You know, nobody’s immune,” team owner Rick Hendrick said. “That’s what I tell our guys. When you see the economy starting to slip, everybody’s going to get squeezed. You might not feel it now, but there’s a trickle-down effect.”

Even as Chevrolet drivers Dale Earnhardt Jr. and Jimmie Johnson whooped it up in victory lane last weekend, Chevy’s parent company, General Motors, was preparing to announce a record $38.7 billion loss for 2007.

Chevy’s racing budget is pocket change in GM’s overall budget, and the company considers NASCAR an important advertising platform. But the bad news stoked an undercurrent of long-standing concerns about the automakers’ ability to keep spending at the same pace team owners’ costs are rising.

Even Hendrick, who should be riding high after Earnhardt won the Bud Shootout exhibition race in his debut with Hendrick Motorsports and two-time defending Cup series champion Johnson won the Daytona 500 pole position, is thinking about the government’s economic stimulus package and how it might affect his empire of car dealerships.

Two top team owners, Jack Roush and Ray Evernham, sold significant stakes in their teams to investors last year. Another two major teams merged. Everyone else is left looking for more money.

Evernham sold majority ownership of his team to Montreal Canadiens owner George Gillett partly because Evernham couldn’t stomach the business end of the sport. Though Evernham says NASCAR remains a good investment for sponsors, he’s worried that won’t be the case if costs continue to skyrocket.

Evernham said it costs more than $20 million to run one car for a full season.

“If it goes up to 40 and 50 million dollars, the spread between the haves and the have-nots is going to be bigger,” he said, “and I don’t care if you get 100 cars that show up. If you’ve only got five or six that can win, it’s not going to be a very good show.”

NASCAR officials acknowledge that there might be some potholes in the road, but believe they’re already taking measures to help teams. NASCAR chief marketing officer Steve Phelps insists the sport’s overall economics are in good shape.

“I’m not going to say we don’t have a challenge or two, but that’s OK,” Phelps said. “It’s an opportunity for us.”

Last summer, NASCAR reassigned a group of employees to focus on helping teams and racetracks find sponsors. An even bigger boost was NASCAR’s “Car of Tomorrow,” which is expected to reduce costs because teams won’t have to build different cars to suit different tracks.

And Phelps said that although NASCAR wasn’t happy with its TV ratings last year, commercial sales appear strong going into this season — an indication companies are still willing to spend on NASCAR in a struggling economy.

“I think the sport, personally, is in great shape,” Hendrick said. “Because I know my sponsors are cutting other things, but they’re not cutting the NASCAR stuff. That’s a good sign.”

Still, there are caution flags.

Bobby Ginn, a multimillionaire real estate developer, bought a team midway through the 2006 season and nearly won the Daytona 500 with Martin last year.

Five months later, Ginn had tired of running the team out of his own pocket after struggling to find sponsorship and merged his team with Dale Earnhardt Inc.

“I feel bad for Bobby, for what he went through and the money that he lost,” Martin said.

Others in the garage area consider Ginn’s failed experiment a result of his racing inexperience. But nobody would make that case when it comes to Doug Yates, whose family team was competing for race wins and championships not so long ago.

Now it’s struggling to get by.

“It’s really tough to get sponsors, and I wouldn’t want to be sitting where Doug Yates is sitting right now,” Martin said. “And he might be fine. I mean, he may be fine and he might not be losing any sleep about it. I would be.”

What can NASCAR do to make being a team owner a more attractive proposition?

Some want NASCAR to award franchises, as is done in other sports, so team owners have more to sell than used race cars, parts and a building when they get out of the business.

Evernham wants NASCAR to control costs.

“Now’s the time to plan,” Evernham said. “There’s a lot of good, smart businesspeople in NASCAR. The first major step was Car of Tomorrow to help keep the costs down. And we’ve just got to now maybe look at some of the labor costs, engine costs. You’re not ever going to stop it from growing, the costs, but we’ve got to continue to work on containing that growth.”