NASCAR can learn something from F1's barely-avoided financial crisis

The two biggest racing series in the world, Formula 1 and NASCAR, don't have much in common. NASCAR's big, bulky stock cars pale in comparison to F1's open-wheel marvels of engineering precision, with the wind tunnel meaning just as much to a team's finish as the driver in the cockpit. With side-by-side racing difficult in F1, there are more lead changes in one stock car race than there are in one-third of an F1 season.

But off the track, the two series share a common bond of multi-car team organizations that threaten to dominate their sport. It's a hot-button issue in a tough economy, and NASCAR should take note of the tumult that swept F1 this month.

This week's agreement by FOTA and the FIA to come together for the 2010 season not only preserved the future of the open-wheel series but also allowed for an important measure: cost-cutting. For the first time, the series' biggest organizations -- Ferrari, McLaren and Toyota among them -- came together on a plan to curb spending. Sure, it wasn't exactly what FIA President Max Mosley had in mind -- he couldn't get everyone to commit to a hard cap of $60 million -- but there were still enough concessions to ensure the 2010 season will be a cheaper one.

Three new teams will still be entering the sport next year, and now the cost of staying involved will be low enough to keep the old ones from dipping in the red. That means while other series are struggling to attract new owners to the grid, the F1 series will actually expand next year by as many as half-a-dozen cars.

What does all that have to do with NASCAR? While series head Brian France has done his best to cut costs in recent years (see: no testing, the Car of Tomorrow), it hasn't been enough to attract successful new owners during this latest recession. As I documented two weeks ago, start and parkers continue to dominate the back end of the garage due to an inability to make money and remain competitive at the same time. The sport is struggling to fill its fields, and when it does, the cars that show up rarely have the cash flow and the intentions of running an entire race.

Solving the problem is difficult, but to make the playing field more cost-effective you have to find a way to make the big teams stop spending. A top-level Cup team these days has costs around $25 million per car, money not many people have when both manufacturer and sponsorship money is drying up. Yet when money is tight, the old saying rings true: "To the victors go the spoils." With the cost of competition going up each year, the bigger organizations can't stand pat with the sponsors they already have; rather, they're forced to add new ones in order to offset higher expenses.

Just look at the No. 17 of Matt Kenseth as an example. On one of the top-tier teams at Roush Fenway Racing, Kenseth used to only need money from longtime supporter DeWalt to run for the series title. But with costs increasing, the tool company can only give the team so much money, meaning Kenseth's list of backers has grown significantly. USG, R & L Carriers, and Carhartt are just some of the roughly half-a-dozen primary sponsors that will plaster the side of Kenseth's Ford this year, and that's still not enough. RFR announced recently DeWalt needs additional financial relief to keep sponsoring the car in 2010.

What's interesting about that example is two of the sponsors listed (USG and R & L Carriers) came into the sport supporting smaller organizations that no longer exist. As the balance of power shifted, these sponsors jumped ship and aligned themselves with surefire exposure -- the coverage that comes from the sport's top teams -- while leaving one less financial piece of the puzzle out there for new owners looking to develop into contenders.

Now, with the manufacturer cutbacks, that cycle of gobbling up the smaller sponsors is only going to get worse. Teams like Richard Childress Racing are set to lose as much as $10 million next season from GM's recent struggles, leaving them in desperate need of additional financial support. Rick Hendrick is in the same boat, and the sport's richest car owner announced recently the team may need additional backing for 2010 for Mark Martin's No. 5 car -- even if sponsors Kellogg's and CARQUEST stay on board.

Of course, both teams wouldn't need that money if the cost of competition went down by $10 million. But how does the cycle of spending stop?