The Law Of Unintended Consequences

The Law of Unintended Consequences, occasionally referred to as the “Butterfly Effect”, is the basis of a classic short story and more recently a popular Hollywood film. The short story focuses on the future when time travel might be possible. In the story, which I’m sure you were made to read in high school, a big game hunting service takes hunters back through time to shoot a dinosaur. Because tampering with the fabric of the past is risky business, they purposely select dinosaurs that would have died within a few hours anyway in an unaltered history. The service is so careful they even lay down a mat to keep plant life from being trampled. But on one hunt, a cranky hunter stomps on a prehistoric butterfly. When he returns from the past to current time he learns to his horror the simple death of that butterfly ended up altering history so dramatically the world is ruled by a totalitarian dictator.

And it would seem that NASCAR has their own case of Unintended Consequences on their hands. When the Daytona 500 entry list was finally released (it seems likely NASCAR was trying desperately to pad the car count before releasing it) only 45 cars are entered for the Great American Race. With only two cars going home that’s really going to cut down on the drama of the Twin 125 qualifying races on Thursday.

Naturally NASCAR never set out to reduce the number of teams that compete in the sport thereby making the racing less exciting. But decisions they’ve made in other areas have had the unintended consequence of doing just that.

Perhaps most significantly, NASCAR entered into is multi-billion dollar TV network deal prior to the 2001 season. In the press conferences that followed the announcements by NBC and FOX we were told in gushing prose how wonderful the new deals were for the sport of stock car racing. At long last a majority of races would be on broadcast TV not cable television, just like a big time stick and ball sport. (Well, never mind. A lot of the stick and ball sports are now on cable and even the NFL has a Sunday night game on ESPN.)

Television networks it should be noted are for-profit corporations not charities. In order to try to make NASCAR broadcasts turn a profit (something neither NBC or FOX has managed to do to date) they must sell commercials during those broadcasts. In order to sell more commercials the networks have made it clear they are not going to mention the names of companies that sponsor Winston Cup teams unless those sponsors also buy ad minutes during the race broadcast themselves. While not official policy an astute viewer will probably also have noted over the last couple years that the networks even show cars whose sponsors buy ads more than those that don’t. Some race broadcasts have taken on the look of Budweiser info-mercials. Even as terribly as the 88 team ran last year the UPS car received airtime far out of proportion to Dale Jarrett’s achievements simply because UPS was buying a ton of ads from FOX and NBC.

The pool of marketing money is not bottomless. Race team owners are now competing with the TV networks that carry the sport to wrest away ten to fifteen million dollars a year from corporate marketing budgets. It’s interesting to note while both medications are purported to do the same thing, Viagra decided to sponsor a race team while Levitra has apparently decided to spend their marketing millions buying commercials during race-related broadcasts. That might be wise considering how little TV exposure the Viagra car got last year. To mix my metaphors, with the TV networks grabbing ever bigger pieces of the marketing pie, there’s less left to go around for the team owners which is why outfits like Jack Roush Racing and Dale Earnhardt Inc. haven’t been able to find sponsors for top tier teams for 2004. And if Roush and DEI can’t one can only imagine how challenging finding a sponsor for a smaller team has become, which explains the reduced car counts.

And it doesn’t help any that there’s a third player grabbing at that same dwindling portion of the pie that is left. Every time a company pays out marketing dollars to become the “official something” of NASCAR that’s more money not available to sponsor teams. And while NASCAR will be receiving big checks from Nextel for title sponsorship, as part of the bargain teams can no longer try to bring other companies in the hot telecommunications industry into the sport as sponsors on their cars.

And it would appear that NASCAR “26-10 C4C” dog and pony show is having some unintended consequences of its own which may further reduce the size of the pie. According to an article in Ad Age magazine a good number of sponsors are reevaluating their team sponsorships, wary that if their driver doesn’t make the cut to compete for the title in the last ten races they will receive less exposure. (NASCAR says no. NBC says no. Logic say, “You bet your sweet bippie.”) With a number of sponsorship contracts up at the end of this season and with most contracts containing a “Performance” clause that’s got to be frightening for those team executives charged with trolling the already fished-out waters for sponsors willing to commit 15-20 millions to back a team.

NASCAR officials are said to be “concerned” about the high cost of fielding a competitive team and the resultant low car count. But what are they doing to reduce the cost of racing in the Cup series? Richard Childress reports that he spent over a million and a half bucks re-bodying his fleet of cars to meet this year’s new template rules. As that Senator once supposedly said, “A million here, a million there. Pretty soon it starts to add up to some real money.”

And if NASCAR is interested in reducing the cost of racing it would seem that their new testing policy is a step in the wrong direction. Last year teams with non-rookie drivers were allowed five two-day tests. This year they keep those five two-day tests and may run an additional four single day tests. (Teams with rookie drivers get seven two-day tests and five one-day tests.) Testing is a hugely expensive undertaking. Cars and personnel have to be transported to the track. That often involves needing a second hauler. Crew members must be fed and housed. Telemetry equipment is needed to analyze the cars performance, and the more the better. Engineers must be on hand to interpret that data. In the event the results are disappointing the team often has to send the car back to the shop, cut off the body and then head back for some more very expensive wind tunnel testing. And of course the teams have to rent the track for the test which doesn’t come cheap.

And therein, I’d guess, lays the reason for the expanded testing allowance. While NASCAR owns no race tracks, the France family runs NASCAR and the ISC which owns twelve tracks where Cup car races are held. The France family also has a half stake in Martinsville. What’s more, of the ten tracks that will make up the Chase for the Championship stretch drive the ISC owns five of them and half of Martinsville. Certainly those tracks will benefit as the Chase for the Championship teams scramble to test in preparation for the stretch drive. And while technically NASCAR and the ISC are two separate entities, when the ISC gets scratched behind the ears, NASCAR’s tail wags.

The change in testing is only going to increase the gap between the well funded teams and those struggling to get by. And as the smaller less successful teams fail for lack of funding the car count will go further down or we’ll be left with field-fillers that show up, take a few laps then park the car with “electrical problems” to collect the last place money.

Someone must have stomped on a bunch of butterflies in the past because our sports is currently seeing the consequences of a totalitarian dictatorship in Daytona Beach.

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Monster Energy NASCAR Cup, 2004

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