When hard times forced a stock-car team to cut costs in racing’s early days, it usually meant losing five or six grease monkeys. “Now, you’ve got to put another zero on everything,” says Humpy Wheeler, former president and general manager of Lowe’s Motor Speedway. Concord-based Chip Ganassi Racing laid off 71 last summer when it dropped a team. More than 100 followed a few months later when Ganassi merged with Dale Earnhardt Inc. in Mooresville. In December, Mooresville-based Petty Enterprises LLC laid off about three dozen employees, bringing its job cuts since the season ended in November to more than 70.
Racing, with an annual statewide economic impact of nearly $6 billion, hasn’t hit the wall yet, but it’s skidding that way. About 27,000 Tar Heels are directly or indirectly employed in motorsports. “You’re going to see teams perform at the same levels with the same successes but with less money and fewer people,” says Rep. Karen Ray, a Mooresville Republican and co-chair of the General Assembly’s Motorsports Caucus.
The sport suffers from the same downdrafts as the rest of the economy, including inflated unemployment rates and shrinking discretionary income. Racing also depends on sponsors more than most sports, and the Big Three automakers, which pump in hundreds of millions of dollars a year, face calls from Congress and shareholders to cut expenses.
Wheeler estimates that 750 people in and around Charlotte had lost racing jobs by early December. How deep it will go and how long the slump will last are unclear. Marketers say racing provides sponsors huge exposure. Ann Arbor, Mich.-based Joyce Julius & Associates figures that NASCAR champion Jimmie Johnson provided nearly 60 hours of television time, worth about $510 million, this past season for his main sponsor, Lowe’s Cos. of Mooresville.
“NASCAR still delivers a lot of value for fans and sponsors,” says David Carter, director of the Sports Business Institute at the University of Southern California. “What you’re seeing now is these teams trying to cut costs by joining forces. But the way motorsports has delivered on sponsorships over the years is going to keep it from bottoming out as bad as it could have.”
Bad enough, though. Some Charlotte racing executives predict that 2,000 racing employees will lose jobs in 2009. “The sport is relatively stable,” Carter says. “But the landscape certainly isn’t going to be great for the next year or two.”
Rob Peter to pay Paul
Claremont resident J.V. Huffman Jr. confessed to cheating more than 500 investors in a Ponzi scheme that lasted 17 years and raised more than $25 million, according to the U.S. Securities and Exchange Commission. Initially, he told investors that his Biltmore Financial Group Inc. operated like a mutual fund. After Sept. 11, 2001, he said it generated profit by buying and selling mortgages. But Huffman told investigators that he used money from clients to pay profits to earlier investors and himself. His attorney, Pete Anderson, wasn’t sure if he would challenge the confession. The Hickory Daily Record ran an apology from his extended family, which says, “There are no excuses for what has taken place.” In addition to a securities-fraud complaint by the SEC, he faces eight felony charges.