Nov. 28 (Bloomberg) -- Nascar’s Rookie of the Year faces a situation most of his counterparts in professional sports won’t next season -- unemployment.

Regan Smith, the top first-year driver in the Sprint Cup Series, is one of 116 employees of Dale Earnhardt Inc. whose jobs will disappear as the team merges with Chip Ganassi Racing. Mooresville, North Carolina, the 23,000-person town that’s home to the sport’s biggest teams, is preparing for a wave of job losses as car owners merge, pare rosters or shut down.

“By this time of year, if you haven’t figured out what you’re doing, it’s always difficult,” said Smith, 25, after he clinched the rookie honor at the last Sprint Cup Series race of 2008 in Miami. “I’m pretty confident I’ll be driving a Cup car for somebody next year, I just don’t know which one.”

The average value of the top 15 teams in Nascar jumped 65 percent to $119 million in the last two years based partly on 2007 sponsorships, according to Forbes magazine. This season, five of those teams have lost sponsorship on at least one car, two have merged and one may not compete next season. General Motors Corp., Ford Motor Co. and Chrysler Corp., which lavished cash and technical support on teams and drivers, are seeking as much as $25 billion in government aid to stay afloat.

Mooresville, which calls itself Race City, USA, is home to about 120 Nascar-related companies. Shops sprouted in the woods around the city after seven-time champion Dale Earnhardt Sr., who died in 2001, built his “Garage-Mahal,” a 240,000-square-foot race shop, museum and corporate office near his farm southeast of the city. Even the police cars in the city, about 30 miles (48 kilometers) north of Charlotte, are decked out in a checkered- flag theme.

‘Tighten Up’

“People understand that based on the economy today, everybody has to tighten up a little bit and go through somewhat of a correction,” said Russ Rogerson, executive director of Mooresville South Iredell Economic Development Corp., a local business group.

Race teams have announced they have fired or given notice to about 189 workers in the Charlotte area this month. More than 1,000 workers might be let go by the end of the year, CBS.com reported.

Ganassi and Earnhardt started 2008 with seven cars in Nascar’s top series. The companies said they will field four next season. Smith, the top rookie, wasn’t included in the driver line-up.

Petty Enterprises, Michael Waltrip Racing and Stewart-Haas Racing all face 2009 with less-than-fully-funded cars. Some, like 2002 Daytona 500 winner Bill Davis Racing, may shut down their Sprint Cup operations for lack of backing.

Top Impact

Even Roush Fenway Racing, which Forbes magazine ranked second in Nascar with $173 million in revenue, has pared its employee roster, folding two teams in the Camping World Truck Series after Ford announced it would no longer fund vehicles in the third-tier circuit. The completion of a 150-unit fleet of Nascar’s new car, which began two years ago, was also responsible for some of the layoffs at the shops.

“Most of our reduction was in the area of car building,” said co-owner Jack Roush, 66. “Ninety-nine or 95 percent of our staff is in place and is not subject to a dislocation.”

Nascar Chief Executive Officer Brian France, 46, whose grandfather founded the racing league six decades ago, said on an October media conference call that at least $80 million in new, increased and renewed sponsorship will flow into the circuit next season. Revenue in the sport declined less than 10 percent this season, he said. The closely-held racing league doesn’t release net gains or losses in sponsorship.

Won’t Race

Difficulty in landing sponsors has made running part-time in the top series an option for some teams. Furniture Row Racing, which ran two cars at some races in 2008, won’t enter every race next year. Petty’s No. 45 car, in which Kyle Petty was expected to be replaced by rookie Chad McCumbee next year, may run only if sponsors are found. Hall Of Fame Racing, owned by Arizona Diamondbacks executives, also said it may not run a full season.

Teams that aren’t carrying a lot of debt may be able to benefit from running fewer races, said Chris Lencheski, a sports- marketing consultant and team owner. His Ski Motorsports enters cars in races for sponsors that include NOS energy drink. Instead of competing for the Sprint Cup title, some teams may opt to go to races that offer the most exposure for sponsors.

“Value isn’t just in winning the championship, the value is in moving the sales needle,” Lencheski said. “You’ll see just as many teams as always running for the Daytona 500. The question is how many will go to Las Vegas” for the third race of the season.

The teams that will have the most difficulty next season are the ones that have to sell out sponsorships for all 36 races to pay their bills, he said.

Smith said he’s pretty sure he’ll be driving next year. Like the other displaced workers in Mooresville, if he isn’t in the top Sprint Cup Series, he’ll take whatever work he can get.

“I’ll look to the other two series and work hard to get back to this level,” Smith said.

To contact the reporter on this story: Gene Laverty in Charlotte, North Carolina, at glaverty@bloomberg.net.

Last Updated: November 28, 2008 00:01 EST