NASCAR leaders, drivers bullish on future – AZCentral.com
USA TODAY Sports’ Ellen Horrow breaks down which drivers are hoping to make a mark in Las Vegas for the Kobalt 400.
USA TODAY Sports
When Bill France Jr., the then 44-year-old NASCAR president, welcomed a sports writer into his office five days before the 1978 Daytona 500, he was anxious to share his vision for stock car racing’s future.
It was easy to doubt that vision.
The son of NASCAR founder Bill France Sr. — who in 1947, largely through the strength of his larger-than-life persona (and intimidating 6-foot-5 stature), wrangled disparate factions into one organized series — spoke of NASCAR becoming a true national sport.
Drivers, he said, would be as famous and rich as stick-and-ball athletes. But there were no cable TV sports networks at the time and most races were in the southeast. Winston, the Cup series title sponsor, was restricted in how it could promote racing to non-adults.
So why was France Jr. so confident of NASCAR’s success?
“Because,” he said, “we work at it day-after-day, week-after-week, year-after-year.”
France Jr. died in 2007 but lived long enough to see his dream become reality, as, in retrospect, it seems he pragmatically calculated. From the mid-1990s to mid-2000s, NASCAR was a sports marketing moonshot.
Helped by IndyCar’s two-series’ civil war (which some say he encouraged), TV coverage of every event and Jeff Gordon’s emergence as a transformational mainstream athlete/celebrity and rivalry with Dale Earnhardt, NASCAR raced coast-to-coast and became America’s most popular and richest motorsport.
New speedways were built near Los Angeles, Chicago, Kansas City and elsewhere. Ticket-selling success led to a second NASCAR weekend at Phoenix International Raceway, site of Sunday’s Camping World 500.
NASCAR did more than herald itself as second only to the NFL in popularity — stretching research data to claim its fan base was 75 million — commanding a $750 million series entitlement and $20 million Fortune 100 team sponsors. NASCAR, its leaders said, was an “industry” with a policy of “managed growth.” They said it had become more than a sport or entertainment.
NASCAR was a “lifestyle.”
Then it hit the skids.
NASCAR’s TV audience — one of the most important metrics because viewership translates to sponsorship and rights-fee money for teams, drivers, tracks and NASCAR itself — is down 45 percent since 2005. Nielsen reports that what had been an average of about 9 million viewers per race fell to 4.6 million last year.
Grandstands were dismantled at tracks that had overbuilt during the boom times.
There are as many theories why NASCAR slowed down as there are engine parts.
Among those most cited: Less-than exciting competition, too many (36) and too long (most 500 mile) races, lack of compelling rivalries, drivers’ suppressing their emotions and being overly image-conscious because of corporate sponsorships, and cars that didn’t mirror what’s in the showroom (until the so-called “Car of Tomorrow” was replaced in 2013.)
For more than a decade, third-generation leader Brian France has been under the hood of his family business, trying to again find high gear.
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As Gordon, the four-time champion and now Fox analyst, is quick to point out: “It’s far from being an all-bad news situation. It’s still the best racing there is. We’ve got a lot of great stars and personalities and a loyal fan base.”
Indeed, it’s different TV numbers that keep NASCAR strong. Fox and NBC — in part to buy content for their cable networks competing against ESPN — combined to pay a reported $8 billion over 10 years, through 2024.
Nielsen Sports SponsorLink found that 91 percent of fans are likely to consider a company’s brand, product or service if it’s a NASCAR sponsor, compared to 61 percent of the general population.
FedEx (Joe Gibbs Racing, driver Denny Hamlin) and Shell-Pennzoil (Team Penske, driver Joey Logano) recently announced long-term sponsorship extensions. Aspen Dental has increased its involvement with Danica Patrick, although her No. 10 Ford still isn’t fully sponsored. Neither is teammate Clint Bowyer’s No. 14, and others.
International Speedway Corp., the largest of the three publicly traded companies that own all but two NASCAR tracks, is spending $178 million to modernize PIR. Even though those three operators had about a seven-percent combined decrease in admissions revenues last season.
Brian France is adamant: “We’re not declining.”
“NASCAR is part of a sports landscape that is changing,” France, chairman and CEO, said in an exclusive interview with azcentral sports. “You see that in ratings. You see that in media digital consumption. People are not consuming everything they like on television. They are getting it in social media, digital media.”
TV ratings for most NASCAR races were down again in 2016. Even the NFL, though, took a surprising eight-percent regular-season ratings hit. The Daytona 500, two weeks ago, averaged 11.9 million viewers on Fox, up 5 percent from last year. Last Sunday’s event at Atlanta Motor Speedway gained in ticket sales, was down slightly in TV audience, but still the top-rated sports event on a weekend that included a Duke-North Carolina basketball game.
“I’m a Duke fan and, until recently, I couldn’t watch the games on TV,” France said. “But I watched about a 10-minute reel on-line which was all the highlights. It was compelling. That’s a different way for me to consume my team in basketball, and that’s happening in NASCAR.
“There are new opportunities but there will be periods with uncertainty a little bit. The interest level is high but it’s changing and challenging.”
Roger Penske, American racing’s most successful team owner who fields the No. 2 Alliance Truck Parts Ford for Brad Keselowski and Logano’s No. 22, offers useful perspective.
“I ran (chaired) the Super Bowl in Detroit in 2006,” Penske said. “We had to add seats to get to 70,000 to have the minimum number. NASCAR has a Super Bowl 36 times a year.
“Since the (2008) financial crisis, our fan has been challenged because of his compensation. People are living longer, trying to pay to put their kids through school, you’ve got your father and mother living with you. There’s much more social pressure which doesn’t give you the option to buy tickets.
“We’ve had more interest in sponsorship in the last 12-18 months than we’ve ever had. I go back and look at five years ago, I think we’re in a much better position to go forward.”
Monster and Millennials
Sprint, the Cup series sponsor for 13 years (originally as Nextel), gave NASCAR two years’ notice it wouldn’t renew for 2017. Its first 10-year entitlement contract paid a reported annual average of $75 million. Talk was the sanctioning body would seek a 10-year, $1 billion replacement. There were no takers at that price.
NASCAR, according to Steve Phelps, its chief global sales and marketing officer, contacted hundreds of brands. It wasn’t until last December that Monster Energy drink was announced as the new title sponsor.
Monster Energy’s commitment was only described as “multi-year” and no financial terms were revealed, but it’s widely believed to be far below what Sprint was paying. What NASCAR is hoping, however, is Monster Energy’s appeal to younger consumers will help attract a new generation of fan. NASCAR has made reaching Millennials — those born after 1980 — a top priority.
“They (Monster) are a youthful and energetic, fun brand,” Phelps said.
“We’ve had some growth, from a small base, (with) Millennials . . . If we can grow a full point, which we did (2016 vs. 2015), as a percentage of our total audience, that’s a win for us. That particular segment is about 10 percent of our audience.”
NASCAR continues its outreach to Hispanics, aided by Daniel Suarez’s Xfinity Series championship last year, the first Latin driver to win a national title. About 18 percent of PIR’s ticket customers are Hispanic, up from four percent a decade ago.
Phelps said there will be a “double digit” increase in new NASCAR official or team sponsors because of the effort that landed Monster Energy.
“I would characterize the market selling place in NASCAR as very steady,” Phelps said. “We don’t have people that are beating down the doors to come be our entitlement partner. It took work to have people understand what it is we’re doing.
“We like to say, ‘If you haven’t seen NASCAR lately, you don’t know NASCAR.’ What we’re trying to do is service the needs of the fans. If I’m a 20-year-old who doesn’t have a television, I need to serve that need in a different way. I can serve that need through NASCAR.com, our apps, through social media. I want to be relevant and be where that fan is consuming.
“(But) this notion of the death of television in sports is ridiculous and absurd. Five million people watch our races on average. That’s a significant number of people who are stopping what they’re doing for appointment viewing to watch the sport that they love.”
Vice chairman Mike Helton admits this is the way NASCAR used to do business: “We’d make a rule and say, ‘Here you go. Go figure it out.'”
France’s leadership philosophy has become collaborative, listening more closely to, and becoming more accepting of, suggestions from councils representing drivers, owners, tracks, sponsors, automakers and fans. This season’s new race format, where points are awarded over three stages, came directly from driver input and as a result of fans wanting more hard racing throughout an event.
Dale Earnhardt Jr., NASCAR’s most popular driver who missed much of last season because of a concussion, was blunt in speaking with azcentral sports.
“The drivers demanded to be involved in some of the discussions,” he said. “That’s how the drivers’ council came about. NASCAR was open to the idea and it has become something very positive and effective. We are the people living it every day.
“If we all come together and help influence a decision, we’re not doing it with an agenda. We’re not going to agree on something that’s better for one driver and not someone else.
“It’s the way things gotta be. This sport is going through a lot of change and we all want it to be healthy and around for a long time.”
Said Helton: “NASCAR, we had the opportunity, the growth, the headwinds. I think we’re, ‘OK, what do we have to do to revitalize our sport?’ It’s strong. It’s healthy. It’s got great components to it that we can build from. What do we need to do to make sure there’s a NASCAR 100 years from now?”
France said, respectfully, the issues he confronts are “more complex” than those faced by his father and grandfather.
“At that point we had a pretty low basis,” he said. “Now we have a high basis. We’re a major-league sport with lots of vested interests. Am I confident we’ll navigate around (challenges) in a smart way? Yes. Am I aware things will be challenging in certain periods? Absolutely.
“We are tied to the broader sports industry. We all are going to go up together or down together. Some will have storylines and moments that will spike. On television, you’re going to see the big moments like when the (Chicago) Cubs make the World Series, and that’s great. Those will be the moments that television will capture.
“And then they’ll capture the rest maybe in a different way, but it will still be more impactful than any other medium. That will be lost to people in the short run: ‘Oh, ratings are lower!’ They’re not really lower, they’re shifting and they spike when there’s a Super Bowl or some can’t-miss-this type thing.”
France said that NASCAR will still face the challenges it’s always had, primarily giving consumers a compelling product and keeping it safe.
“The sports landscape is competitive. We don’t have some of the luxuries some of the other leagues have. In the arenas and stadiums they have a lot of public funding, we have very little, so we can’t give tickets away. So we have some perceived attendance issues based on that.
“We have gotten our industry aligned better. The fundamentals are strong.”
Gordon, arguably NASCAR’s most consequential person of the last quarter-century, remains optimistic.
“With the right decision-making,” he said, “the sport can rise back up to what it was.”
NASCAR week at PIR
What: NASCAR Monster Energy Cup, Xfinity series races
When: March 17-19
Where: Phoenix International Raceway
Tickets, information: phoenixraceway.com
March 17 (gates open 10 a.m.)
Xfinity practice, 10 a.m.
Monster Energy Cup practice, 11 a.m.
Xfinity practice, 1 p.m.
Monster Energy Cup practice, 11 a.m.
Monster Energy Cup qualifying, 4:45 p.m.
March 18 (gates open 9 a.m.)
Monster Energy Cup practice, 9 a.m.
Xfinity qualifying, 10:05 a.m.
Monster Energy Cup practice, 11:30 a.m.
Xfinity race: DC Solar 200, 1 p.m.
March 19 (gates open 8 a.m.)
Monster Energy Cup race: Camping World 500, 12:30 p.m.