Hendrick doing well to prepare for possibility of National Guard leaving the 88

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Rick Hendrick didn’t get to be one of NASCAR’s most successful owners by not seeing the trends and directions the business is going.

Hendrick, and his entire Hendrick Motorsports organization, have done an excellent job of putting together partnerships to keep his empire at the top of the NASCAR heap.

He’s done it for more than 25 years, despite partners that have come and gone.

He’s doing it again, now, in preparing for the possible departure of the National Guard from Dale Earnhardt Jr.’s No. 88 car.

The increase in sponsor announcements with new partners Nationwide Insurance and DC Entertainment being announced within the last few weeks, and also with Mtn Dew stepping up its activation with a series of videos, are clear signs that Hendrick’s team is working ‘round the clock to get more companies on board the 88 in case the Guard departs.

It’s not inconceivable that they will – witness two reports of note from the past couple weeks.

A USA Today report indicated that despite the more than $26+ million spent on activation and sponsorships in 2012, there was not a single recruit signup at a NASCAR event.

While that doesn’t factor into account local branches where the Guard could attract –and sign – new recruits, it’s still a worrying report.

Then there’s this from Sporting News’ Bob Pockrass, veteran NASCAR reporter who is among the best at deciphering the business side of the sport:

The Army National Guard has a new leader in Judd Lyons, who took over in January. At a U.S. Senate subcommittee hearing last week, Lyons vowed to re-examine the effectiveness of the National Guard sponsorship. He said the Guard is conducting more in-depth surveys of those enlisting to determine what led them to enlist, which in turn should help them understand the value.

Political pressure of military sponsorships in NASCAR is nothing new. It’s been going on for several years. And that’s the way it should be — those in charge of spending taxpayer dollars have an interest in how those dollars are spent.

When a change at the top happens to any company – especially one whose motorsports’ spending have been as closely scrutinized as the Guard’s has been – you have to begin preparing for the eventuality that the deal is closer to the end of its life span than the beginning.

The Guard has backed Dale Jr. and the 88 since his move to Hendrick Motorsports in 2008.

If you’re the Guard, you’ve supported NASCAR’s most popular driver through thick-and-thin, and through what have been more trying years than actual delivery on track.

Junior’s made the Chase each of the last three years, but prior to his much appreciated Daytona 500 victory this year, he’s won only two other races in his stint at Hendrick. He’s still never won a championship, even though he has a good shot to this year in his last season with crew chief Steve Letarte (another area Hendrick will need to address for 2015).

Sponsors demand ROI, even if they happen to have one of the sport’s most marketable drivers, and even if they have the most popular driver.

But they don’t stay on forever. And at only seven years together, the Guard-Dale Jr. relationship isn’t at the length of a Jeff Gordon-DuPont or John Force-Castrol type relationship of 20 or more years.

Hendrick prepared for the eventuality of DuPont’s departure as Gordon’s primary backer by having other associates ready to step up, and ultimately putting together a deal with the AARP’s Drive to End Hunger that has now been the primary backer on the 24 car for several seasons.

You can tell he’s doing the same now on the 88 to keep Dale Jr., in the face of what appears to be a slowly phased down withdrawal by the Guard.

Street race in Vietnam could lead Formula One’s Asia expansion

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TOKYO (AP) — Formula One is expected to add more races in Asia, including a street circuit in the capital of Vietnam, a country with little auto racing history that is on the verge of getting a marquee event.

“We think Hanoi could come on in the next couple of years, and we’re working with the Hanoi government to that end,” Sean Bratches, Formula One’s managing director of commercial operations, told the Associated Press.

There is even speculation it could be on the schedule next season, which Bratches rebuffed.

Vietnam would join countries like Azerbaijan, Russia and Bahrain, which have Grand Prix races, little history in the sport, and authoritarian governments with deep pockets that serve F1 as it tries to expand into new markets.

“This (Hanoi) is a street race where we can go downtown, where we can activate a large fan base,” Bratches said. “And you have extraordinary iconography from a television standpoint.”

A second race in China is also likely and would join Shanghai on the F1 calendar. Bratches said deciding where to stage the GP will “be left to local Chinese partners” – Beijing is a strong candidate.

Bratches runs the commercial side of Formula One, which was acquired last year by U.S.-based Liberty Media from long-time operator Bernie Ecclestone.

Formula One’s long-term goal is to have 24-25 races – up from the present 21 – and arrange them in three geographical segments: Asia, Europe and the Americas. Bratches said the Europe-based races would stay in middle of the calendar, with Asia or the Americas opening or ending the season.

He said their positioning had not been decided, and getting this done will be slowed by current contracts that mandate specific places on the calendar for several races. This means eventually that all the races in Asia would be run together, as would races in Europe and the Americas.

The F1 schedule is now an inefficient jumble, allowing Bratches to take a good-natured poke at how the sport was run under Ecclestone.

“We’ve acquired an undermanaged asset that’s 67-years-old, but effectively a start-up,” Bratches said.

Early-season races in Australia and China this year were conducted either side of a trip to Bahrain in the Middle East. Late in the season Formula One returns to Asia with races in Japan and Singapore.

The Canadian GP this season is run in the middle of the European swing, separated by four months from the other races in the Americas – the United States, Mexico and Brazil. These three are followed by the season-ending race in Abu Dhabi, which means another trip across the globe.

“With the right economics, with the right structure and cadence of events across territories, 24 or 25 is probably where we’d like to be from a longer-term standpoint,” Bratches said.

Big changes are not likely to happen until the 2020 season ends. This is when many current rules and contracts expire as F1’s new owners try to redistribute some income to allow smaller teams to compete.

“There’s more interest than we have capacity in the schedule,” Bratches said, firing off Berlin, Paris or London as potentially attractive venues. “We want to be very selective.”

“Those cites from an economic impact standpoint would find us value, as do others around the world,” Bratches added. “It’s very important for us as we move forward to go to locations that are a credit to the Formula One brand.”

An expanded schedule would have to be approved by the teams, which will be stretched by the travel and the wear-and-tear on their crews. The burden will fall on the smaller teams, which have significantly smaller revenue compared with Ferrari, Mercedes or Red Bull.

Bratches also envisions another race in the U.S., joining the United States Grand Prix held annually in Austin, Texas. A street race in Miami is a strong candidate, as are possible venues like Las Vegas or New York.

“We see the United States and China as countries that could support two races,” he said.

Liberty Media has reported Formula One’s total annual revenue at $1.8 billion, generated by fees paid by promoters, broadcast rights, advertising and sponsorship. Race promotion fees also tend to be higher in Asia, which makes the area attractive – along with a largely untapped fan base.

In a four-year cycle, F1 generates more revenue than FIFA or the International Olympic Committee, which rely almost entirely on one-time showcase events.

Reports suggest Vietnamese promoters may pay between $50-60 million annually as a race fee, with those fees paid by the government. Bratches said 19 of 21 Formula One races are supported by government payments.

“The race promotion fee being derived from the government … is a model that has worked historically,” Bratches said.