Texas Motor Speedway

It’s difficult for NASCAR teams to secure sponsors. Does the sport need a salary cap?

Tony Stewart chuckled at the notion of adding an IndyCar team to Stewart-Haas Racing, an organization that competes at NASCAR’s highest level with four Cup teams.

“I can’t even get enough sponsorship for my NASCAR cars,” Stewart said earlier this week as he hosted his 12th annual “Smoke Show” at Texas Motor Speedway.

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“You think about that, once you start going over there, then I’ve got to sell more sponsorships. It’s hard enough to get sponsorship for the NASCAR side right now.”

SHR extended its deal with Smithfield Foods as the primary sponsor for the No. 10 car for the 2020 season this week. But it’s still difficult to land long-term deals with sponsors.

Doing it in two different racing series? Stewart says no thanks.

Stewart painted a picture of the difficulty of it all. If SHR had Coca-Cola as a sponsor for one of its NASCAR teams, for example, it would eliminate Pepsi or any other soft drink company on the IndyCar side.

“You start locking out categories,” Stewart said.

Not to mention the number of big-time corporations that have bolted the motorsports business in recent years.

Home Depot stopped sponsoring a NASCAR car following the 2014 season. Dollar General called it quits after 2016. Target bailed after 2017. Lowe’s after 2018. Even lesser-known companies didn’t last long.

SHR had a failed marriage with Nature’s Bakery in 2016 when Danica Patrick drove one of its cars. Nature’s Bakery paid $15 million to sponsor Patrick in 2016, and had a contract for additional years.

But Nature’s Bakery backed out of the contract and the two sides eventually settled a lawsuit.

TMS president Eddie Gossage knows the difficulty of securing sponsors in the motorsports industry. He’s negotiated with a number of companies to become TMS’ title sponsors for races, sold billboard space and more.

“You never have enough sponsors,” Gossage said, smiling. “The only thing consistent about NASCAR is that it’s always hard to get sponsors.

“In its biggest days, I can tell you teams that didn’t get sponsors. In its worst days, there’s teams that didn’t get sponsors. It’s not easy getting sponsorships.”

To Gossage, team owners such as Stewart and others may simply have to adjust the way business is being done if the sponsorships are becoming more difficult to land.

Gossage recalled a conversation he had with a successful team owner. The owner employed 43 engineers at the time.

“I’m sure they feel like it’s necessary, but is it really?” Gossage said. “I shake my head.”

Asked if that team owner won races, Gossage said: “Yeah, but not every week.”

After a pause and a smirk, Gossage added: “Other teams have 44 engineers. That’s the constant battle.

“In NASCAR, Tony and his team owner brethren spend more money than they’ve got. They don’t have to spend that much money, but they do.”

Gossage compared the NASCAR spending to that of NHL owners leading up to the 2004-05 lockout. At the time of the lockout, NHL owners spent approximately 76% of their gross revenues on players’ salaries.

“You don’t spend more than you’ve got,” Gossage said. “In sports, these wise owners tend to spend more than they have to spend.

“That guy spends $2 more than you spent, then you’ve got to spend $3 more than he spends to be ahead of him and then he spends $4 … it’s a never-ending kind of thing. I personally would love to see a salary cap, or some such thing applied to budgets for teams, since they can’t seem to control themselves. That’ll be healthy for the sport.”

Especially if fewer sponsors are lining up and writing checks.

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This story was originally published October 11, 2019 6:00 AM.

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