Post by munsonator08 on Mar 25, 2007 18:03:19 GMT -4
BRISTOL, Tenn. -- Changes are on the way at Roush Fenway Racing, which is losing one primary sponsor after this season and has been ordered by NASCAR to drop one of its five Nextel Cup teams by 2010.
Ameriquest, the mortgage company that became the primary sponsor of Greg Biffle's No. 16 car this season, has asked Roush Fenway to sell off the final two years of its contract, which expires in 2009. The lender's struggling parent company recently announced a second round of layoffs, and Ameriquest last week pulled out of a 30-year deal as rights holder to the name of the Texas Rangers' ballpark.
"It's very clear that they want to reduce their contract exposure to us," Roush Fenway president Geoff Smith said Sunday at Bristol Motor Speedway. "If we weren't able to do that, then you get into, OK, here's your car, what are we going to do with it? You've got this lame duck environment going on, which is not helpful to anybody. So in practical terms, we can assume that we'll have another sponsor for next season."
It will be the second sponsor switch in as many years for the No. 16 team, which traded the National Guard for Ameriquest after 2006. Subprime lenders like Ameriquest, which sell loans to people with poor credit histories and at higher interest rates, have struggled amid the recent housing industry slump. Many have gone out of business.
"I don't think anybody saw the radical ways that the mortgage business was going to deteriorate, and all the financial consequences of that," Smith said. "It was very abrupt. Did we know something might be coming? Starting maybe the middle of last year or the fall of last year, we knew the mortgage industry was changing. Interest rates were up. But we had no idea that it would take companies that were so incredibly successful. Everything just seemed to be awesome. But when it did change, then it started to go really fast."
Smith doesn't anticipate any difficulties in finding a new sponsor, especially given that Roush Fenway has nearly an entire season to search.
"We've been notified in the past in November that people have changed their minds and they were going to go in another direction in their marketing programs. Those were much more difficult," he said. "We have the full selling season. Greg Biffle is a fantastic driver. And the economy is still very good, and there's a lot of sponsorship interest right now. There was a period a couple of years ago when it was really, really tight. But we've got lots of time, and there's lots of sponsor interest, so I think we'll be able to work it out just fine."
Roush Fenway also has until the 2010 season to comply with NASCAR's maximum of four cars per organization, announced by the sanctioning body in 2005. The car cap was put in place after all five Roush cars qualified for the Chase for the Nextel Cup championship.
"There's no mistaking our understanding of what we have to do," Smith said. "Regardless of what goes on within our programs, we have to go to four [cars] in 2010."
Roush tried to pitch the idea that any driver or sponsor currently with the team could stay for as long as they wanted, but NASCAR wanted a more definite timeline.
"We thought the fair way to do it was to allow us to keep a driver or a sponsor in perpetuity. As long as we had a driver, we didn't care whether there was a sponsor change. As long as we had a sponsor, we didn't care if there was a driver change," Smith said. "But the problem was, I think from NASCAR's point of view, that that put a theoretically indeterminable time period on it. They came back and said, 'This is the way it's going to be.'"
Ameriquest, the mortgage company that became the primary sponsor of Greg Biffle's No. 16 car this season, has asked Roush Fenway to sell off the final two years of its contract, which expires in 2009. The lender's struggling parent company recently announced a second round of layoffs, and Ameriquest last week pulled out of a 30-year deal as rights holder to the name of the Texas Rangers' ballpark.
"It's very clear that they want to reduce their contract exposure to us," Roush Fenway president Geoff Smith said Sunday at Bristol Motor Speedway. "If we weren't able to do that, then you get into, OK, here's your car, what are we going to do with it? You've got this lame duck environment going on, which is not helpful to anybody. So in practical terms, we can assume that we'll have another sponsor for next season."
It will be the second sponsor switch in as many years for the No. 16 team, which traded the National Guard for Ameriquest after 2006. Subprime lenders like Ameriquest, which sell loans to people with poor credit histories and at higher interest rates, have struggled amid the recent housing industry slump. Many have gone out of business.
"I don't think anybody saw the radical ways that the mortgage business was going to deteriorate, and all the financial consequences of that," Smith said. "It was very abrupt. Did we know something might be coming? Starting maybe the middle of last year or the fall of last year, we knew the mortgage industry was changing. Interest rates were up. But we had no idea that it would take companies that were so incredibly successful. Everything just seemed to be awesome. But when it did change, then it started to go really fast."
Smith doesn't anticipate any difficulties in finding a new sponsor, especially given that Roush Fenway has nearly an entire season to search.
"We've been notified in the past in November that people have changed their minds and they were going to go in another direction in their marketing programs. Those were much more difficult," he said. "We have the full selling season. Greg Biffle is a fantastic driver. And the economy is still very good, and there's a lot of sponsorship interest right now. There was a period a couple of years ago when it was really, really tight. But we've got lots of time, and there's lots of sponsor interest, so I think we'll be able to work it out just fine."
Roush Fenway also has until the 2010 season to comply with NASCAR's maximum of four cars per organization, announced by the sanctioning body in 2005. The car cap was put in place after all five Roush cars qualified for the Chase for the Nextel Cup championship.
"There's no mistaking our understanding of what we have to do," Smith said. "Regardless of what goes on within our programs, we have to go to four [cars] in 2010."
Roush tried to pitch the idea that any driver or sponsor currently with the team could stay for as long as they wanted, but NASCAR wanted a more definite timeline.
"We thought the fair way to do it was to allow us to keep a driver or a sponsor in perpetuity. As long as we had a driver, we didn't care whether there was a sponsor change. As long as we had a sponsor, we didn't care if there was a driver change," Smith said. "But the problem was, I think from NASCAR's point of view, that that put a theoretically indeterminable time period on it. They came back and said, 'This is the way it's going to be.'"
