The Unstable World Of NASCAR Ownership

 

With the recent demise of Swan Racing, it got me thinking about the ownership landscape of NASCAR. It seems every year we see a team come in and leave within a year or two. Only a handful of organizations have stood up to the test of time. Here are my survival theories.

To get an idea of how unstable the world of NASCAR ownership is, I took a look back to 1990 and noted what teams were in the Daytona 500 for that year. Granted, some drivers missed the show and ran the rest of the year, but I used that race as my baseline. From there I looked at five year intervals going all the way up to 2014.

The 1990 Daytona 500 list reveals only four teams that existed then still competed in 2014;and one team technically still operates, but has gone through a ton of mergers. The four teams are Richard Childress Racing, Hendrick Motorsports, Roush Fenway Racing, and Wood Brothers Racing. At the time Childress only fielded a single entry for Dale Earnhardt; Hendrick ran three teams; Roush had only one car; and the Wood Brothers had their single entry.

Of those four organizations, both Roush and Childress had to get outside help/investment in their teams during the past decade. Though crew members, drivers, and management all change year to year, the business ownership entity has stayed the same over the years. Hendrick Motorsports and Wood Brothers Racing are the only two to have their teams 100 % intact. Going one step further, the Wood Brothers no longer run full schedules. This leaves Hendrick Motorsports as the only team to keep their team intact since 1990.

Rick_Hendrick_Tony_Stewart

Another team with this group is SABCO Racing (then later Team SABCO) owned by Felix Sabates. They ran the #42 Pontiac for Kyle Petty in 1990 where Sabates ran the team for many years before bringing in Chip Ganassi in 2001. From there the team re-branded itself as Chip Ganassi Racing with Felix Sabates. In 2008, the team merged with Dale Earnhardt, Inc. to become Earnhardt Ganassi Racing. Finally this year, they divested themselves of the Earnhardt name to go back to Chip Ganassi Racing with Felix Sabates.

Like most teams, Ganassi has seen its organization go from one car up to as many as four, then back down to the current two car operation. Roush started as one car before moving to two then up to five at one point. Currently they operate only three cars. Hendrick has been four cars since 2002 when the organization added Jimmie Johnson, although they have campaigned more in select races. Childress has constantly bounced from three to four cars the past decade without much success with each expansion.

There are two organizations that missed the cut of 1990 that have campaigned cars for over 20 years now, those being Joe Gibbs Racing and Team Penske. Neither has brought in investors, although Team Penske has acquired teams in order to expand. In 1998 they purchased Michael Kranefuss’ team and then in 2004 they acquired Doug Bawel’s Jasper Motorsports team.

In 1990, 40 of the 42 cars in the Daytona 500 we single car efforts. Only Hendrick Motorsports had more than one entry that race. By 1995 that number decreased slightly to 38 independent teams. By 2000 that number dropped to 27, in 2005 it hit the lowest point at which 20 teams now made up the 43 finishers of the Daytona 500. That number went up to 21 for 2010 and 2014.

Starting from 1990 the number of teams who entered a car in that Daytona 500 to 1995 was 22, so 18 teams disappeared (or missed the race). In 2000 16 teams returned, although organizations like Roush Fenway Racing went from two cars in 1995 to four in 2000. For 2005, the number dipped down to 14, but the worst showing was going to 2010 when only nine teams came back.

That was by far the worst stretch, as teams like Dale Earnhardt, Inc. merged with MB2 Motorsports and then Chip Ganassi Racing, going from eight teams among them down to two. Ray Evernham Motorsports was bought by George Gillette then merged into Petty Enterprises to make Richard Petty Motorsports. Another set of moves that took five teams out of operation and replaced them with only two running now. In the last four year gap of 2010 to 2014, 16 teams came back out of the 21 that entered a car in the Daytona 500.

No one has ever gotten rich from running a race team from the local level up to the NASCAR leagues. Team owners pour millions of dollars into their teams with little to no return; just ask Kyle Busch or Rusty Wallace how team ownership goes. Where organizations like Hendrick Motorsports, Roush Fenway Racing, and Joe Gibbs Racing have made their money has been outsourcing services.

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Hendrick Motorsports sells chassis, engines, and technical support to other organizations who race in NASCAR, most notably Stewart-Haas Racing. Roush Fenway Racing created Roush Yates Engines and makes money with that venture among others. Joe Gibbs Racing has developed racing products that they sell to secondary markets.

The key to ownership is having sponsors for one, but also the ability to make other revenue streams into your organization. This is simple business concepts, but unfortunately teams like Swan Racing can’t get the sponsorship that will allow them the foundation on which to set the organization. A great example is even the great empire that is Red Bull Racing, who spends money like crazy in Formula 1 but could not cut it in NASCAR, no matter how much they spent.

NASCAR, and racing in general, is a tough sport because so much is dependent on having the funds to compete for sponsorships. Unless there is a way to cap costs, teams will come and go, and we will even see a time where the mightiest team can just be a distant memory.