DuPont had just announced a deal with Jeff Gordon and Hendrick
Motorsports that is reportedly wort $20 million a year. Defending
champion, Dale Jarrett, and his Robert Yates Racing team are on
the verge of landing a deal with UPS for as much as $15 million
a year.Those deals and others forced Mark's team to find more money if it wants to remain a championship contender.
"When we had to face a decision about a change of sponsorship, I was looking around at the economic pressure that is put on our team by other deals that have just taken place'" Smith said. "If I don't have the same warchest. then the next thing you know my crew chief has disappeared on me or I can't afford to do the next engineering project. I'm pleased that we know that we are going to be able to compete at those levels, hopefully, all the way to the end of Mark's career."
"In order to continue to be competitive against Cal Wells and (Chip) Ganassi and Yates and Hendricks, there ain't no way we could continue down the road we were going." Mark said. "We had to step it up."
The result was replacing longtime sponsor Valvoline with Pfizer Inc., which was willing to provide Mark's team with a sponsorship package big enough to rival the top deals in the sport. Through its Viagra brand, Pfizer is expected to pay Mark's team an average of about $12 million per year over the next five years, sources close to the team say.
Though the team declined to release financial terms of the deal, Mark is confident the five year pact will allow his team to keep pace with the sport's superpowers.
"I think Geoff addressed that the best way he could and I think that somewhat scared off Valvoline," Mark said. "If we would have been talking about a two-year or three-year deal with them, it might have been a little bit easier, but that's a lot of commitment for a long time and we can't undersell it. A five-year deal is a very dangerous deal from a team side, because you can get yourself in trouble with that.
"This takes us where we need to be. We wouldn't have done a deal this early if it wasn't the right deal. It's the right deal for me and it's the right deal for the team.
Team owner Jack Roush said he was forced to end his long-term relationship with Valvoline because the company was unable to handle the rising costs of sponsoring a top team.
"The Valvoline relationship had changed," Roush said. "I'm dissapointed but I'm not totally surprised. For a period of time, the amount of money Valvoline had put into this had not increased in concert with the increase in costs. They had sold portions of the car for increased dollars to help make up the amount of money that was necessary to support the the team. I think when they came back and looked at what was going to be required to keep us on par with the best-funded teams so we can compete for the best people and the most advanced technologies... the costs continue to go up. As we looked at what was going to happen there and they saw what our needs were, they didn't see the prospect of selling the value of those additional needs off to an associate sponsor and they weren't willing or able to committ those dollars themselves, so they backed away."
Roush said he is still negotiating with Valvoline to remain with his organization as an associate sponsor for all his teams, including the cars of Mark and Jeff Burton.
But according to sources in the Winston Cup garage, Valvoline has talked to at least three teams about being their primary sponsor next season. Among the candidates, sources say, are Johnny Benson and the Tyler Jet Motorsports team, Robby Gordon's Team Gordon or one of the two teams Chip Ganassi is buying from Team Sabco.
"I hope they will be able to fnd success with a program they can start, or maintain a relationship with us." Roush said.
The Roush organization, meanwhile, is amazed at the amount of money it now takes to field a competitive team.
"It's unbelievable," Mark says. "I remember in 1988 or '89 when Rusty (Wallace) and Barry Dobson were bragging about their Kodiak deal. They said, "It's a million bucks," and I about fell over. I thought there was no way I could race against these guys with million dollar sponsors."
Numerous teams in the Winston Cup garage continue to be miffed at the huge sponsorship deals top teams are landing, further widening the gap between contenders and also-rans.
Smith, a lawyer and financial wizard in racing, says the evolution has been drastic and will no doubt drive some teams and owners out of the sport.
I believe there is the start of a chasm that is eroding as rapidly as the waters can flow," he said. "There is a dichotomy that was less clear five years ago. The top team and the 20th place team might be operating on 80 to 85 percent of the same money. I would say that dropoff between the top and the middle would be almost 50 percent (now) and the people coming in on start-up will have difficulty finding money. If you want to be a new owner... when we came in 1988, the sponsorship didn't cover what we were going to do to get started. Today, if you were planning to come in and stay, you should have many millions of dollars over and above what that sponsorship level is, because you won't get it."
Mark, who plans to retire following the 2005 season, says he fears what the future holds for drivers and team owners in the Winston Cup Series and is glad his career is nearing an end.
"I'm glad I'm not 25. I'm glad where I am in my career, because
I am set with this deal," he says. "I wouldn't want to be
an owner trying to make a living out of this going forward,
because I think the first response from a lot of sponsors
is that the teams are trying to improve their profit margin,
and if anybody knows anything about this crowd, they ought to
know that that's not what this is about. It's about not losing
on these deals."I'm involved in (Matt Kenseth's) 17 car, but I wouldn't want to own that thing 100 percent if they gave it to me. It would scare me to death. This organization gives me the confidence to be a partner on that car. Without their organization, I would be afraid.
Mark said he fears the explosive growth NASCAR's experiencing, and the rising costs that come with it, is quickly getting out of hand. He is afraid it is quickly catching up to the CART FedEx Championship Series and Formula One, where money and technology buy championships.
"You see it coming", he said. "I don't think it is here today, because it's my belief that you haven't even seen it yet. In the next three years you are going to go back and say, 'Whoa, remember what is was like in 2000.' I'm scared of that. That would scare me as an owner and it scares me as a driver just for the simple fact that I hope we can keep up with it or at least halfway lead the charge. I don't want to be behind the curve, or we won't be a contender to win."
