DuPont Tightens Its Corporate Belt
The economy isn't good. We know that. And we know that that bad economy is presenting challenges for NASCAR. In fact, that story? Beaten. To. Death.
So the news that DuPont, "long recognized as the leader in hospitality among NASCAR sponsors" according to this story in the Sports Business Journal, will entertain fewer than 2,000 guests at six races (down from 17,000 and 37, respectively, in 2008) is arguably not a great surprise. Though I know for my part I'm always taken aback by examples of huge corporations behaving responsibly.
(Hello? Major League Baseball? Pro Football? And you -- over there, hiding in the corner, you, the NBA? About those escalating ticket prices ...)
And while the idea that DuPont's decision could signal the beginning of the end of its relationship with Hendrick Motorsports and Jeff Gordon is startling, it likely doesn't tell us much about NASCAR in particular or the world in general that we don't already know. Namely, things will look a fair bit different in another year.
In fact, it makes a certain sense that DuPont might leave after 2010, when its current contract with Hendrick and Gordon ends. By that time, the driver will be nearing 40 and have completed his 18th Cup season; it's widely speculated that Gordon will retire at that point. And somehow, the idea that DuPont would decide to associate with another driver -- or having anywhere near the return on its investment that it has enjoyed with Gordon -- seems almost inconceivable.
The reality is, sponsors come and sponsors go -- seen Goodwrench lately? Tide? Skoal? -- and NASCAR remains. And, if and when DuPont makes that decision, it will say a great deal more about their business prospects than it does NASCAR's.
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It's a reasonable point, and an issue that would likely bear on any decision DuPont might make, but I would be surprised if the speedway or NASCAR was ultimately a huge piece of DuPont's interests -- the company's market cap. is close to $17 billion and it had worldwide revenues of something like $30 billion in 2007. Obviously, that latter number figures to be a lot lower for '08, but still, as far as its commitment to the No. 24 team and NASCAR is concerned? Probably pretty small.
I might do some research and see if my hunch is right or not...
I don't know....isn't Dover Raceway pretty important to Delaware? Maybe not as important as DuPont is to Delaware, but perhaps equally as important as Delaware is to DuPont. Seems DuPont's business interest in it's home state might foreclose it's abandoning NASCAR. Not a good business move in this climate.
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NASCAR likely is not a huge revenue source for DuPont. Not only is DuPont a Delaware based business for incorporation purposes, like many businesses are, but also I believe that it's actual business is Delaware based, not to mention the strong family connection to Delaware--Pierre DuPont is a former governor and erstwhile Republican presidential nominee many years back. As such, the good will it's corporate largess toward NASCAR generates for the company vis a vis the state of Delaware may be worth what I assume is a relatively small investment in NASCAR....