Competition Contention

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A relatively quick move by NASCAR this week to change what are called “competition policies” has the potential to radically reshape the business model that controls Nextel Cup racing.

It was just a few weeks ago that NASCAR Chairman Brian France and President Mike Helton floated the idea of limiting the number of Cup cars an owner can control. Now, heading into the Phoenix weekend, the policy is in place. Four cars will soon be the limit. The only owners affected would appear to be Roush Racing and Hendrick Motorsports, if you include the part-time effort for Terry Labonte. But it’s being reported this morning that the current ownership arrangements will be grandfathered in through 2009 and perhaps beyond if current driver and sponsor contracts remain in effect.

As you might expect car owner reaction splits along lines that pretty much match the number of cars currently owned. Roush had been the most vocal critic of the new plan, while Hendrick officials have been mostly quiet. And the reported plan to allow current arrangements to continue for several seasons will likely take care of any potential disputes with team owners.

But the long-term implications are significant, I think. By limiting the number of teams any owner can control, NASCAR has taken a big step to ensure that a small group of owners can’t have undue influence over how Cup racing is conducted. It’d take at least six owners to have sway over half the field, and if you know many of today’s owners you know it’s hard to get two of them to agree about most any issue, much less find something half a dozen could support.And the move also should help spread the economic wealth around among more owners; if a new big-bucks sponsor wants to be on a car, gone will be the days when that company could call up Roush or Hendrick and cut a deal to start a new operation. Instead that company will need to either start with a new owner or go to an existing team, say the Wood Brothers, or Petty Enterprises, and forge a new partnership. That’s a good thing.

It may also change the fundamental arrangement that has fueled a lot of the growth in NASCAR racing for the past 55 years. The sport has been built on a system thathonors drivers, owners (and, really, just about everyone else involved) as independent contractors, free to come and go in the industry, but without a formal stake in things as an NFL owner would have. There are at this point no franchises in NASCAR, although some owners spent a lot of time and energy lobbying Daytona Beach to put such a system in place several years ago.

But by limiting car ownership, NASCAR may be opening the door to franchising. Rest assured there’s no one in NASCAR who thinks car owner control of a series is a good business model. So if some sort of franchise arrangement does have to be created this won’t be a replay of the old CART scenario.

What may end up being as significant as the ownership cap is the move to further limit Cup testing, and the use of Goodyear tires at tracks which don’t host Cup events. There have been plenty of teams again this year who’ve used Kentucky, Gateway, USA International, Greenville-Pickens, and other non-Cup facilities to log extra track time. Now, though, they won’t be able to stockpile current-year tires to run on.

While this would seem again to be a good way to close the gap between the big and small Cup teams, this will likely propel even more Cup teams into Busch or ARCA events to do more research and development. Or teams will have to buy ARCA Hoosier radials for independent testing. One thing is sure: the top Cup teams will continue to thrive; now, second-level teams may have more financial resources to tap.

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NASCAR Sprint Cup, 2005

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