Recession, Rising Costs of Exotic Cars Forcing Sponsors off Drag Strip : Drag racing: Many of the sport’s top names are losing their backing and seeking someone new for 1992. Don Prudhomme is among the lucky drivers with a backer.

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The Winston Finals drag race in Pomona marked the end of the sport’s season for 1991. But financially, some of drag-racing’s biggest names still have a race to run.

In the garage area at the October race was Jim White, who this year set the speed record for the sport’s “funny car” division: 290.13 m.p.h. in a quarter-mile. White’s main sponsor, Procter & Gamble Co.’s Hawaiian Punch unit, is getting out of racing after this year. He’s still looking for a replacement sponsor for 1992.

Then there was Jack Clark, Boston Red Sox slugger and drag-racing team owner whose car and driver, veteran Tom (The Mongoose) McEwen, were chiefly sponsored this year by Mobil Corp. But Mobil is dropping Clark’s team after this year; he, too, has no sponsor for 1992.


And there was Dick LaHaie, winner of the top-fuel title in 1987 and perennial championship contender. He also lacks a major sponsor.

Drag racing is going through a sponsorship shakeout. Although nationwide attendance at drag races is at record levels, the recession and the rising cost of these exotic, nitromethane-burning cars are forcing sponsors either to leave the drag strip or to place their racing bets more carefully.

That’s making it hard for even legendary drivers to get financial backing. The sport relies on the deep pockets of Fortune 500 companies to cover the $1-million-plus yearly cost of each of the 4,500-horsepower cars steered by the premier drivers, who can’t possibly pay those costs with prize money alone.

No wonder that another drag-racing star, veteran Don (The Snake) Prudhomme of Granada Hills, considers himself lucky because his top-fuel team’s main sponsor is the thriving Skoal smokeless-tobacco unit of UST Inc. (formerly known as U.S. Tobacco Co.). UST picks up roughly 70% of the $1.5 million that’s needed each year to finance Prudhomme and his five-member team on the 18-event drag-racing series sanctioned by the National Hot Rod Assn.

UST, based in Greenwich, Conn., which also sponsors race cars in the Winston Cup stock-car and Indy car series, is an extraordinarily profitable company, with earnings of $223 million on sales of $765 million last year, for a profit margin of 29%.

“It’s nice to deal with people that are making money,” Prudhomme, 50, said recently in his Chatsworth office before the Pomona race. “We talk to plenty that aren’t.”


Prudhomme (pronounced pru-DOME) knows what it’s like to go without. He was a four-time funny-car champion in the 1970s before switching over to the top-fuel ranks in 1990. (Top-fuel cars are the long, spindly vehicles; funny cars are nearly as fast and have sleek fiberglass bodies covering the cars.) But Prudhomme’s career hit the skids in the mid-1980s when he went four years without winning a race, and his sponsor, PepsiCo Inc., dropped him.

Without the money, Prudhomme sat out the 1986 season. But that year he was spending time with racing legend A.J. Foyt at the Indianapolis 500 and was impressed with how well Foyt got along with representatives of his sponsor, Copenhagen, another of UST’s tobacco brands. Prudhomme went home and drew up a plan for UST to sponsor his dragster, and UST jumped on board because it wanted to spread its advertising into drag racing.

Luckily for Prudhomme, tobacco is far less vulnerable to economic cycles than many other businesses that sponsor racing--such as the auto, oil and tire industries, or non-traditional sponsors from the packaged-goods and consumer-products industries.

Conversely, tobacco marketing faces its own unique threats. Recently, the Federal Trade Commission announced a settlement by Pinkerton Tobacco Co., maker of Red Man chewing tobacco, in which Pinkerton agreed to stop displaying its name during tractor-pulling events it sponsors on cable-television so as not to run afoul of statutes prohibiting tobacco advertising on TV.

The FTC said it is evaluating TV ad practices of other smokeless-tobacco companies, but declined to elaborate. Most major drag races are shown on a delayed basis on both broadcast and cable TV.

It’s a crucial issue, because UST is convinced that racing sells smokeless tobacco. In the past decade, the company’s sales have tripled and its profits quintupled “mainly because of our involvement in motor sports,” said Jay Wells, UST’s racing coordinator.


Other sponsors apparently can’t make the same claim, as evidenced by the drivers struggling to find corporate backing. Ballplayer Clark said his bid to get new financing produced “a lot of interest” from potential sponsors, but he conceded, “I haven’t had anybody really step forward.”

“It’s a tough sell,” said White, the funny-car driver. “Everybody in motor sports is out contacting these sponsors, and there’s only so many companies that have the kind of money it takes to support this type of racing.”

Procter & Gamble, the consumer-products giant, paved the way for non-traditional sponsors in racing in the 1980s by sponsoring cars with its Folgers coffee, Tide detergent and other packaged goods. But in ending Hawaiian Punch’s involvement with White’s dragster, P&G; is indicating it believes racing has run its course as an advertising vehicle. Speaking of drag racing, P&G; spokeswoman Wendy Jacques said, “We decided it’s not a good fit for us in the coming years.” She declined to elaborate.

Despite the shakeout, no one is suggesting that drag racing overall is in serious financial danger. Attendance at NHRA drag races this year hit a record 1.7 million, and corporate heavyweights such as the Winston cigarette division of RJR Nabisco Holdings Corp., the Budweiser unit of Anheuser-Busch Cos. and Ashland Oil Co.’s Valvoline subsidiary are still committed to the sport. Brian Tracy, the NHRA’s vice president for sales, said Eastman Kodak Co. and McDonald’s Corp. also are evaluating drag-racing sponsorships.

But Tracy said some past sponsors that thought their sales would go up solely because they advertised on a race car found out they were wrong--and they are pulling out.

“A lot of people just put their names on the car and expected miracles to happen,” he said.


“Most sponsors don’t understand motor sports,” UST’s Wells said. “Once they put their name on the side of the car, then they have to promote it.”

Indeed, UST’s staff was busy at Pomona, handing out free samples of Skoal along with stickers and posters featuring Prudhomme’s car and Skoal’s emblem. Drag racing’s main audience--males 18 to 30 years old--is ideal for UST’s business. (The tobacco samples went to adults only; youngsters got only the stickers and posters.)

Prudhomme, who was eliminated in the quarterfinals at Pomona last weekend, prizes his tie to UST for another reason. In an age when racing drivers and their cars are traveling billboards for sponsors, it is no secret in drag-racing circles that Prudhomme is an intense, sometimes moody driver who doesn’t always carry a smile in front of the fans.

But UST doesn’t mind, nor does it insist that Prudhomme win so many races a year. The laid-back policy was in full force last year, when Prudhomme suffered three nasty wrecks and had a miserable season.

“When you have a sponsor that puts a lot of pressure on you to win races, and have a frown on their face when you don’t win, it’s very uncomfortable,” he said. “I put more pressure on myself than any sponsor can. But I don’t need to hear anything from them.”

Prudhomme did better this year, winning three events. But the first-place prize money, roughly $50,000 per race, is peanuts in Prudhomme’s budget, which he manages with his wife, Lynn. Win or lose, his costs are borne mostly by UST and his secondary sponsors, including Texaco Inc. and General Motors Corp.’s Pontiac division.

“If I won all the races this year, it probably wouldn’t be enough money to support the race car,” he said.


Of course, winning certainly helps. UST and other sponsors typically provide a flat amount of cash to a racing team each year. So if the team has a good year in which it isn’t replacing lots of wrecked cars or blown engines, that’s so much savings in the team’s bank account.

Prudhomme said his salary, and those of his team, depend “on how good a year we have. Last year was a disaster year.” He said, “I didn’t make any money at all,” because of the accidents and costly repair jobs. He won’t disclose his typical salary, but said the sport’s top drivers can earn $250,000 or more a year--thanks mostly to leftover money from sponsors, not race checks.

About 43% of his costs go into the expense of constantly rebuilding his dragster’s engine. Then there are tires, his team’s payroll and lodging expenses, and the cost of an elaborate tractor-trailer that moves his dragsters from track to track.

“It’s not as lucrative as you might think,” Prudhomme said of his career. Still, he has enough money to retire today, although he doesn’t plan to stop driving at least until his contract with UST expires. And this time, Prudhomme and his sponsor will part on his terms.