NASCAR Revs Up Its Marketing Engine
During the Summer Olympics, NBC consumed millions of dollars’ worth of airtime with promos proclaiming, “NASCAR goes Hollywood!”
Actually, today’s stock car race is a world away from Tinseltown -- about an hour’s drive east in working-class Fontana. But the commercials did speak loudly about the landscape NASCAR is determined to conquer.
The broadcast from the California Speedway, in prime-time on the East Coast, is part of NASCAR’s ambitious blueprint to lure new fans in bigger and richer markets.
Already a multibillion-dollar business -- second only to the National Football League in ratings for televised sports -- NASCAR is shifting its focus beyond such race-crazy Southern strongholds as Darlington, S.C., to places where corporate sponsors and television networks can reach a broader audience.
Among the newer locales are tracks near Chicago, Phoenix, Dallas and Kansas City, Mo. In July, 676 acres were earmarked for a track on New York’s Staten Island that would put NASCAR in the country’s No. 1 media market.
The man behind the wheel of NASCAR is the grandson of William “Big Bill” France, who became a sports legend after he created the stock car racing venture in 1947 on the hard sands of Daytona Beach.
“We’re going to be the most aggressive marketers in sports,” said Brian France, the 42-year-old who took over as chairman and chief executive a year ago from his father. “We already had a direction. I just want to speed us up.”
He isn’t limiting his efforts to the grandstands.
At the Fontana racetrack, where 100,000-plus spectators are expected to converge for the Pop Secret 500, Walt Disney Co. will be filming another sequel to its popular 1970s “Love Bug” franchise, this one starring Lindsay Lohan and Matt Dillon as a NASCAR driver of the souped-up Volkswagen. Before the real race cars get the green flag, “Herbie” is scheduled to take a lap around the track.
NASCAR plans to co-produce one movie a year, while increasing the profiles of its superstar drivers by having them appear in TV shows such as “Family Feud,” “Days of Our Lives” and MTV’s “Cribs.”
Purists fear that France’s expansion drive could offend loyal fans and dilute the sport’s down-home feel.
But France said he was balancing tradition with progress. “We hope we’re going slowly enough so we don’t alienate our core fans on the way to bringing in new fans,” he said in an interview at NASCAR’s Century City offices. “No one likes change, so there’s an apprehension.”
And when it comes to fans, they don’t come more devoted.
The 32 tracks that hold NASCAR races typically sell out weeks in advance. Some devotees drive hundreds of miles in campers and million-dollar motor homes for a weekend outing at the track. Some rough it in pup tents.
Four-time NASCAR champion Jeff Gordon has a good sense of fan loyalty. “When you meet someone and they have me, my car, my sponsor and my number tattooed on their back, it blows your mind,” he said. “Your fans feel like they know you. You’re part of their lives.”
That loyalty translates into big dollars. Fans spend an estimated $2 billion a year on NASCAR merchandise. They are three times more likely than other sports fans to buy products of corporate sponsors, who pay as much as $20 million a year to back a winning team and driver. In all, NASCAR boasts the biggest pool of sponsorship money in sports, nearly $1 billion a year.
Coca-Cola, for one, sold an additional 55 million bottles a month of its soft drinks after it began sponsoring NASCAR, according to Harris Interactive, a market research firm.
“There is nothing like it in sports marketing and advertising in general,” said Mark Schweitzer, head of marketing at Nextel Communications Inc.
His company became NASCAR’s biggest sponsor this year in the most expensive sponsorship deal in history. At an estimated cost of $750 million over 10 years, Nextel replaced R.J. Reynolds, which ended its 33-year sponsorship of NASCAR’s Winston Cup series because of the soaring costs.
Such sponsorship deals have played a crucial role in keeping NASCAR’s athletes wholesome and family-friendly. France said many professional athletes in other sports had no incentive to be well-behaved because they enjoyed rich, long-term contracts that were guaranteed.
By comparison, a NASCAR driver is an independent contractor and can pull down $10 million to $20 million a year in salary, sponsorships, prize money and merchandising. Drivers say their survival depends on the respect of their sponsors, which finance the cost of putting their state-of-the-art cars on the track.
“It boils down to the dollar,” said top NASCAR driver Jimmie Johnson, an El Cajon, Calif., native whose main sponsor is the Lowe’s chain of home-improvement stores. “Lowe’s doesn’t want someone as a spokesman with a drunk driving record or a drug problem. They have an image to uphold. At an early age, if you want to survive, you learn to put on a corporate hat and be responsible.”
For the uninitiated, NASCAR’s grip on fans and their wallets seems mystifying. What’s the big deal about watching a bunch of noisy American muscle cars racing in a circle for hours? The answer, according to a wide array of sports experts, is NASCAR’s unique accessibility.
“You can pick up a golf club and realize you’ll never be Tiger Woods, but for that split second when the light turns green, you’re Jeff Gordon or Dale Earnhardt Jr.,” said David Hill, chairman of Fox Sports Television Group. His company, along with NBC and TNT, has been airing the races since 2001.
What’s more, Hill said he suspected NASCAR was drawing young people who had shunned traditional team sports in favor of individual heroes like those in the video games they played.
Fans also are allowed into the garage areas of tracks before and after races to mingle with drivers and pit crews. Think Jack Nicholson at Los Angeles Lakers games, without the bank-busting ticket price.
“This is the only sport in America that allows fans in its locker room, the garage area,” said NBC Sports President Ken Schanzer. Many U.S. fans, he said, have come to realize “the sport is more sophisticated and interesting than they assumed.”
A risky overhaul last September of the point system for naming a NASCAR champion each year has proved successful too in building audiences and revenue, despite initial criticism from the faithful.
In the past, the last half-dozen races often had little effect on the team that would be named winner of NASCAR’s 10-month season. NASCAR chief France created a kind of playoff system in which only the top 10 drivers would compete in the finals. The change has ratcheted up competition and excitement in the home stretch of the season, when NFL games traditionally trim NASCAR ratings.
“It turned out to be fantastic for the fans,” said racer Gordon, although he said he had misgivings about whether the new scoring system was opening the door for less-deserving drivers to compete for the $5-million prize.
Perhaps the biggest boon to NASCAR’s popularity came under the leadership of Brian France’s dad, Bill Jr. He brought the first NASCAR race to television in 1979, when the Daytona 500 was broadcast live on CBS. That was quickly followed by more exposure on the newly created ESPN.
But it was in 2001 that NASCAR hit the TV jackpot. The younger France persuaded track owners who had been negotiating separate deals to unite under NASCAR so they could leverage a bigger payday. It worked, with Fox, NBC and TNT agreeing to pay an average of about $400 million a year for the rights to air NASCAR’s big races, a huge increase from the roughly $100 million the tracks had been receiving on their own.
Ratings went through the roof.
“NASCAR was on seven different networks before the broadcast deal,” said Hill of Fox. Consolidating them, he said, made it easier for viewers to find the races and for broadcasters to promote them as big events.
In 2006, those $2.4 billion in TV contracts start to expire. “We’re looking for nice increases,” France said. Fox in particular, he noted, has added millions of dollars to the value of two of its channels -- FX and Speed Channel -- because NASCAR programming has expanded their reach to new cable households.
Some Wall Street analysts said NASCAR would be a prized acquisition for a media giant -- such as ESPN parent Disney -- looking to control valuable sports rights. But France said, “We try to be good capitalists, but we’re not for sale.”
Some old-school NASCAR observers are watching the growing dominance of the Frances with wariness.
Unlike other professional sports leagues, NASCAR is a family-owned company. Experts peg its value at more than $1 billion, an amount derived from television rights, race fees, sponsorships and merchandise. The family’s fleet of jets is referred to by some in the industry as “Air France.”
Separately, the family controls the nation’s leading racetrack operator, International Speedway Corp., worth $2.8 billion. Its tracks, including California Speedway, hold more than half of the major NASCAR races.
Some skeptics wonder whether independent track owners are headed for extinction.
Joe Mattioli, an 80-year-old former dentist, owns the Pocono Raceway in eastern Pennsylvania. In fact, he built the place in the 1960s.
He dismisses speculation that he could lose races to International Speedway if the company manages to build a track on the Staten Island parcel it agreed to buy last month.
“NASCAR is a dictatorship,” he said, “but it’s a benevolent dictatorship. We’re treated very equitably. They’ve made us all a lot of money.”