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Motorsports Commentary - Sleeping With The Enemy

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by Rick Carlton – Senior Motorsports Editor

Austin, May 25, 2012: While I appreciate successful decisions that drive motorsports businesses positively, I am particularly interested in evolutions that become troublesome, and subsequently fall into the category of having to deal with ‘unintended consequences’, since these experiences serve as useful cautionary tales that can be leveraged and avoided in the future. This latter characteristic can potentially translate in the case of NASCAR’s recent decision to execute a formal Memorandum of Understanding (MOU) in collaboration with the EPA, because the decision certainly offers a series of possible ‘consequences’, while at the same time potentially opening a larger Pandora’s Box that could portend hard times for the motorsports industry, its sponsors, its fans, and the future of the sport itself.

I am not necessarily a ‘pave it, drill it, or build on it,’ kind of guy, but I do like having the ability to turn the lights on, and also enjoy hearing a comfortable growl, whenever I turn the key in the ignition, right after I’ve put gas in my car’s tank. On the other hand, however, I work and live in the Texas Hill Country, which is located in one of the most beautiful areas of US, so as a result I appreciate, and am quite sensitive, to environmental concerns when it comes to the beauty of the rural landscape here, in addition to its abundant regional flora and fauna.

As a result, balanced thinking is my watchword each day, since the State that I call home is also a fossil-derived energy Mecca that produces, refines, and delivers copious amounts of fuel to help power this country, while at the same time, being culturally central to the vitality of a fair portion of the NASCAR nation, and its intrinsic commercial cast of sponsor partners. Given those recognitions, then, why would the most important domestic motorsports sanctioning body, whose very existence is based on the internal combustion engine and, thereby, serving as a perceptual standard-bearer for this country’s traditional fuel largesse, choose to get a room with the most fossil-fuel damning agency in the Federal Government?

Frankly, I found the NASCAR/EPA agreement puzzling if not down right frightening, since today’s EPA is not so much a friend of the earth, as it is the enemy of the energy business. Nonetheless, and being hard-headed to a fault, I decided that I would try to resolve my conundrum by calling the good folks in South Florida, but guess what; nobody was interested in straight talk in Daytona. Instead, what I received, in response to what I thought were a rational set of journalistic queries, was a clutch of robotic recitations akin to ‘don’t know,’ ‘can’t tell,’ ‘couldn’t say,’ ‘the release clearly states our position,’ or ‘the initiative was not political.’ Fortunately, or unfortunately as the case may be, I am an old guy of Italian extraction, and my Dad was a New Yorker who taught me to appreciate the smell of warm horse manure in Brooklyn, well after the first pile was dropped in the middle of Manhattan. So after hanging up the phone, I took a shower in order to shake the road apples out of my hair, and went to work trying to figure out what the hell might be going on.

As I worked the issue, the sanctioning body’s clear stonewalling could only mean that the suits at NASCAR were in a tizzy about something but I was still befuddled, until I recalled that the company had found itself having to talk to the Wall Street Journal and other business publications, regarding the implications of the release. Suddenly it occurred to me; these guys are feeling pressure from somewhere, and if a public company that managed to generate revenues of $1.13 billion last year was being deflective, I sure as hell was going to be concerned about it too.

This consideration immediately triggered a contextual recognition, since the country is experiencing considerable discomfort inside the six months before the general election. So, one plus one being two, it occurred to me that perhaps someone in the administration might be trying to put pressure on NASCAR, in order to try and leverage its substantive fan loyalty and, thereby, promote and acquire support for the current incumbent administration.

Based on that little conjectural exercise, I started walking back along the line of bread crumbs that have periodically appeared. But, to get to an ultimate conclusion, some assumptions needed to be understood beforehand. First and foremost, I based my theoretical track on the premise that business has, and always will be business in this country. As a result, and as one might expect, NASCAR and its parent company International Speedway Corp (ISC), have developed a series of business relationships with Federal/State agencies dating from the early 90’s.

As a large-scale commercial business operator/developer, it is entirely logical that ISC/NASCAR should maintain these relationships in the form of a host of lobbyists, Congresspersons, Senators and regulatory agencies, in and outside of the Beltway, because that’s the way business is done when your market cap is better than a billion dollars. However, while ISC/NASCAR has encouraged and pandered to these interests when necessary, the motorsports giant has always maintained a position of neutrality when it came to executing formal agreements that, on a perceptual level, might appear to directly validate, or promote, any Federal/State agency initiative.

That said, however, and even with the odd and sudden confluence between corporate America and the government aside, a simple administrative MOU would typically mean little in a larger sense. But, in this case, the new agreement was signed in concert with today’s EPA, rather than previous agency administration’s, that were clearly seen to be reasonably passive in execution, if not being philosophically inconsequential. Today’s EPA, on the other hand, is well known to execute its regulations like a herd of bulldozers, rather than a cadre of weak-kneed tree huggers, while at the same time delivering its environmental messaging on the basis of aggressive secular indoctrination in the vein of Pol Pot, as opposed to concerns based on assertions driven by the overall well-being of the country.

Nonetheless, whether you care for the agency’s aggressive approach or not, as a practical matter, after each of the EPA’s Big Brother onslaughts on energy-based businesses since January 2009, it has typically left dying and dead commercial interests strewn across regional and local landscapes, along with congruent, and significant, job losses. And, since the business of NASCAR is entirely dependent on the agency’s supervision and validation of a host of environmentally sensitive elements within its overall business model, the only conclusion that one can draw in retrospect, is that the sanctioning body must have been given an ‘offer it couldn’t refuse.’

Politics have always been part of the fabric of American business, and this is particularly true when considering the scale of an enterprise. However, large-scale commercial businesses don’t typically get in bed with bureaucrats, and nasty bureaucrats at that, unless they find themselves being threatened and, therefore, must accede to bullying in the near-term, in order to insure that they have an opportunity to survive in the long-term. This is what I believe has happened in this case, but now that EPA’s Camel has been pushed under the NASCAR tent, what now?