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- Clint Bowyer takes a spin in recession-era NASCAR | Image credit: USA Today

How Could an Economic Downturn Effect NASCAR?

The threat of a global economic crash is looming. The DOW Index has dropped 3%, which has always been followed by a recession. That would hurt sorts of industry, and especially the automotive industry. But what about, specifically, auto racing? Motorsport Community tribe leader Duncan looked at what that would mean for F1, and his take is worth a read.

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What would happen to NASCAR? A good starting place is the Great Recession of 2008, which affected NASCAR very strongly. By the mid-2000s, NASCAR became the second-most watched sport in the US after the NFL, with the Daytona 500 the second most watched sporting event after the Super Bowl. During and after the Great Recession, attendance continued to fall, to such an extent that NASCAR has stopped releasing attendance figures since the 2012 Daytona 500, which had more than 42,000 fewer fans than the year before. However, it's easy to see that attendance is consistently falling. Television ratings are also consistently low.

So what happened? Well, attendance naturally would go down and immediately after a recession, but it stayed down because of a series of mistakes made consistently by NASCAR management. During the recession, it was hard for fans to travel to races, which led to NASCAR seeing falling attendance. However, the management failed to understand that this was inevitable due to the economic situation, and continued in a series of mistakes. For a start, in the mid-2000s, NASCAR implemented the Chase (now called the Playoffs). For the first few years, the Chase was a big success, driving up ratings. However, by 2008, ratings were going back down, as fans new to NASCAR began to stop following the sport and lifelong fans grew dissatisfied with these new rule changes and also left. This resulted in NASCAR adding more rules that only exacerbate that.

After the Recession, then, attendance and ratings continued to shrink, as both types of fanbase felt discontented. This has led to a cycle that can only get worse in the future. What NASCAR needs to do is go back to how it was when it was a growing sport - less concerned about profit, which would allow smaller teams and independent drivers. But that's not the point of this article. NASCAR has and is doing what they are doing.

But what'll that lead to? That background will provide context to the aspects of NASCAR that I'll look at being affected by an economic downturn: the organization, the tracks, and the teams.

The Organization

NASCAR is a company in itself. It gets money from the entries into its races, parts of the tickets and sales at its venues, and more. This means that NASCAR needs good attendance and full fields to make money. In its golden age, many cars would be sent from the track each week after failing to qualify into the 43 (now 40) car grid. However, there usually aren't even 40 cars on the track. Last week's race had 38. This hurts NASCAR, leaving them less able to spend the money which might attract more teams and drivers. They also need money for development, and a recession would keep that money from them. NASCAR is a big enough organization to survive a recession, but it could become even less popular after one. It may have to cut some of its smaller series, which don't bring in as much money.

The Tracks

Many of the tracks - more than half - on the NASCAR circuit are part of the ISC (International Speedway Corporation), which is owned by NASCAR. This means that the success of NASCAR and many of its tracks are linked. However, some aren't. The tracks are businesses in themselves, getting money from tickets and sales at the track. That means that falling attendance hurts them, and they're being hurt now. A recession will almost certainly lead to noticeably increased empty seats at the tracks, which means they'll make less money. The ISC tracks won't be supporting NASCAR, and the other tracks may no longer be able to have enough money to host NASCAR races.

The Teams

It's incredibly expensive to run a NASCAR venture. Estimates range from $5 million for a back-running team to more than $20 million for a winning team to compete each year. Many teams are being forced out of the series because of lack of funds, especially in the lower national series - which cost less to compete in. In a recession, even fewer teams could compete. Even some of the big teams could lose money and competitiveness. Richard Childress Racing was a powerful and winning team before the Recession (Dale Earnhardt Sr. raced for them), but they're now reduced to a midfield team now. It could provide an interesting shakeup for the teams, but many would likely not survive due to lack of funds.

What do you think?

Here's how I think three aspects of NASCAR would be affected by an economic downturn, something that seems very likely right now. What do you think?

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