Furniture Row Racing (FRR) has announced that it plans to cease operations at the completion of the 2018 NASCAR season. The Denver based single-car racing team lost its ability to fund the #78 car following 5-Hour Energy’s July decision to drop its co-primary sponsorship (along with Bass Pro Shops) and amidst an ongoing struggle to re-sign its technical alliance with Joe Gibbs Racing (due to rising costs). Team Owner Barney Visser explained, “the numbers just don’t add up. I would have to borrow money to continue as a competitive team and I’m not going to do that.” FRR GM Joe Garone called FRR’s plight from champions to out of business in 10 months a “wake-up call” for the sport.
Howie Long-Short: Furniture Row Racing didn’t fail because of a lack of success on the track, they’re the defending Cup Series championship team and currently running 3rd in the standings, which makes their inability to make ends meet particularly concerning for the sport. If one NASCAR’s most successful teams can’t find sponsorship partners and is unable to churn a profit, the business model no longer works. It doesn’t sound as if wholesale changes are coming though, the sanctioning body issued a statement saying, “NASCAR will continue to work with the race teams on competitive and operational excellence. Much of those efforts have already been put in place, and will continue to be a focus.” If that’s the case, why is FRR shutting its doors?
Garone said that teams that rely on sponsorship revenue to operate have “no runway if something goes wrong” (i.e. loss of a major sponsor). If that’s true and there’s more teams in that position then one’s backed by billionaire owners willing to eat losses, I’m concerned FRR won’t be the last to leave the sport.
Fan Marino: FRR’s decision to close up shop has to be disappointing to Toyota (TM), as the company wants to run 5 or 6 cars in the Cup Series field; should Truex Jr. decide to sign with someone other than Joe Gibbs Racing, the manufacturer would have just 4 cars racing on the circuit. With that said, many suspect that Truex Jr. (and crew chief Cole Pearn) will end up with JGR in the #19 car; if the team can find a home for Daniel Suarez (the JGR driver most assume will be moved) on a Toyota satellite. If he doesn’t, expect him to land with Stewart-Haas Racing (strong relationship with Bass Pro Shops, Kurt Busch is free agent) or Leavine Family Racing (contemplating move from Chevy to Toyota).
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The Pyeongchang Games start on February 9th, but winter Olympians are finding corporate sponsorship opportunities difficult to come by; particularly for those that compete in smaller sports, that don’t have a U.S. following. Athletes that win and have a compelling story are the ones landing corporate sponsorship deals. Slopestyle skier Gus Kenworthy, who won silver in Sochi and is publicly gay, has signed deals with Toyota (TM), United (UAL), Visa (V), Procter & Gamble (PG) and Deloitte. His sexuality is worth noting because human rights groups say that sexual minorities’ rights are not always protected in South Korea; a country where having homosexual relations is punishable by up to 2 years in prison.
Howie Long-Short: Becoming an Olympian is an expensive endeavor. Richard Parsons estimates that it has cost more than $500,000 to get his children (Rachel and Michael, an ice dance team) to cusp of the ‘22 Olympics. It’s unlikely he’ll ever recoup the money. Gold medals are worth just $25,000 in the U.S. and even the USOC acknowledges that most athletes cannot earn enough from their sports to make a living. That’s not the case everywhere though, gold medals are worth $952,000 in Taiwan and $746,000 in Singapore.
Fan Marino: Frigid weather is likely to affect both athletes and fans at the Pyeongchang Games, with the average February temperatures (with wind chill) there in the single digits. The newly built 35,000-seat stadium that will host the opening and closing ceremonies (up to 5 hours long) doesn’t include a roof and it’s too late and expensive to build one now. For those attending, fear not; organizers have promised portable heaters in the isles, blankets and heating pads.
Medals are nice, but sometimes not enough for Olympic athletes seeking sponsors
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Smart baseballs (or robo-balls), designed to help pitchers develop their curve ball and increase pitch speeds as the ball approaches the plate, are now available in Japan. Technical Pitch, created by Japanese mobile software developer Acrodea, Inc., looks and feels like any other baseball, but has sensors that capture pitch speed, the tilt of ball’s rotation and rotations per minute; with results sent to a smartphone. The company says that the data’s accuracy matches that of sophisticated MLB in-park radar systems (though TrackMan disputes that notion). Acrodea says that several MLB teams have expressed interest in the product.
Howie Long-Short: There are several ways to play smart baseballs. You can invest directly in Acrodea on the Tokyo Stock Exchange (TYO: 3823) or Alps Electric Co. (OTC: APELY), the Apple (AAPL) supplier that developed the technology Technical Pitch draws on. You can also play Mizuno Corporation (OTC: MIZUF) or Aichi Steel Corporation (a TM company), who are collaborating on a similar product (called MAQ); to be released in the spring.
Fan Marino: It seems likely that robo-balls will be used for scouting purposes. Scouts travel to far distant lands in search of the next Clayton Kershew, often lacking the resources to obtain/track reliable data related to ball movement. Now all it takes is a $180 (retail price) ball, the prospect and a catcher. Several Japanese League teams have already begun using the product. It is important to note that these baseballs are not designed to be hit!
Baseballs Are Getting Smarter
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Twitter (TWTR) has announced a deal with NASCAR that will enable the online news and social networking service to live stream in-car race video of its 10 cup series races to its 300 million+ users. On the same screen, the micro blogging application will also show curated tweets reflecting the ongoing discussion about each race. While terms of the deal have not been released, TWTR has announced that Toyota (TM) will sponsor the race video content. NASCAR’s first live stream on TWTR will take place on September 17th.
NASCAR Pacts With Twitter to Live-Stream In-Car Video for Playoff Series Races
Howie Long-Short: Twitter increased their live video viewership by 22% in Q2, so it’s no surprise they continue to add high-quality content providers. But what does this do for revenues & profits? Despite all the video content added, advertising revenues are down 8% YOY and the company has no user growth.
Fan Marino: This is where TWTR shines. Sports fanatics can sit on their couch, watch the event and feel like they are surrounded by millions of their closest friends.