The business end of NASCAR is finally starting to turn around, and we saw proof of it this last week. On Tuesday, Farmers Insurance announced a three year deal to sponsor Kasey Kahne’s #5 Chevrolets at Hendrick Motorsports. Farmers will be the primary sponsor for 22 races each season, and will get “prominent brand placement” in all other events. While Hendrick still has races to fill for the #5, Farmers represents new money into NASCAR, and that’s a good sign for everyone.
It seems that over the last few seasons, we’ve seen many sponsors move from one team to another, but we haven’t seen a ton of new sponsors coming in. The downturn in the economy and NASCAR’s attendance and ratings struggles have been the main reasons. It’s certainly not a bad thing when sponsors move teams, just as long as they stay involved in the sport. But over time, it’s unrealistic to think that all current sponsors will stay involved. Agendas will change and companies will leave. It’s important to the future health of the sport that teams are able to attract sponsors that have never been involved in NASCAR before.
Farmers’ deal with Hendrick is part of a broader plan by the insurance provider to increase consumer awareness. They’ve also signed recent deals with the PGA Tour and the proposed NFL stadium in Los Angeles. (If you’re a Sports Business Journal subscriber, see recent article about Farmers here.)
Along with the good news from HMS, we heard from FOX this week that the overall TV ratings for their 13 events were up 9% over 2010. As NASCAR rights deals edge closer to expiring, numbers like this will be very important in the renegotiation process. They also help teams in selling sponsorship deals like Hendrick did with Farmers.
As the year progresses, hopefully we will see a few more deals like this one emerge. There are plenty of teams still looking to lock down sponsorship for 2012 and beyond, including RCR’s #33, and maybe Farmers will help open up a flow of new money.
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There was an interesting piece today from the Daytona Beach News Journal about how hotels in the Daytona area are working harder to get fans to come and stay for the 500. The article mentioned that average hotel prices are down significantly since 2008, and that ticket prices for the 500 have also come down. Obviously the price drops are a symptom of the falling attendance that NASCAR has experienced over the last couple of years, but while it’s good to see the cost of attending a race is falling, we need more and quicker.
A sidebar to the News Journal article shows the average nightly rate for Daytona area hotels in February since 2001. It’s interesting to note that between 2001 and 2008, the average rate rose $47.26. But from that high in 2008, rates are only back down $26.73 on average. I understand that other factors like inflation are in play here, but simple supply-and-demand says prices should be lower.
Tracks have also gotten into the act, with most dropping seat prices and allowing for greater flexibility with payment and package options. Many have also experimented with adding different seating and camping areas, and other entertainment options like pre and post-race concerts. But again, with so many empty seats, it would seem that more could be done to get fans back to the track.
According to the experts, one big area where viewership is down, is with the younger demographic. NASCAR’s main audience has skewed older, and is now the highest of any major sport. I believe one way in which this could be combated is with lower prices. They want younger fans to come to the track and watch on television, so make it more affordable for those younger fans to experience NASCAR.
My whole point here is that NASCAR and the tracks should be working towards a new pricing model. They’ve obviously seen that the sport isn’t strong enough to continue charging high prices in a bad economy. So instead, why not go in a different direction? Why not make NASCAR the best value in sports? Price the tickets for races so low that fans have no other choice but to come out.
Something I’ve never understood about sports, is that when attendance is suffering, why venues don’t do more with ticket prices. Isn’t it better to have the place full with lower prices and maybe more free tickets, than to have an arena 50% full at full price? The more fans in attendance, the more consumers you have to sell food, beverages, and merchandise too. You are also able to build a relationship with that fan that could spawn loyalty and future purchases. This is what NASCAR is missing right now.
It appears that creating a fantastic product on the track hasn’t done much in the way to coax people back to the track. While we have had the same champion for the past five seasons, the racing has never been closer in the history of the sport. So if the product is good, and people still aren’t showing, what’s left to do? Lower those prices. Make it more affordable for those blue collar families to come and enjoy racing, and you’ll get that younger demographic back. Families will bring the kids that will be ticket buyers in the future, and younger people will come out to have a good time because it doesn’t cost an arm and a leg.
The sport as a whole is experiencing a correction because of the bad economy. We are seeing it with everything from sponsorships to ticket prices. Everyone wants more value for the dollars they are spending. For the fans, I say leave the product as it is, and add value by bringing down the prices. If you drop them (the prices), they will come.
Before I really get into this post, I wanted to share a quote from Michael McDowell that he posted tonight on his Twitter page (@Mc_Driver). McDowell has been driving the #55 for Prism Motorsports this season, and is one of the start-and-park crowd’s usual suspects. There was some discussion about the reasons often given for why these teams fail to finish, which are usually bogus, and McDowell had a great response.
“They get mad at me when I tell them ‘I was going down the straight away and the funding fell off.’”
It was a bluntly honest comment from a good kid who is just trying to make it in racing, and I wanted to share. Keep fighting McD…
Over the last few seasons, starting and parking has become a regular part of the sport. Fewer teams and less available sponsorship dollars have contributed to the phenomenon. Lately though, it seems that the number of teams doing it has increased in the Nationwide and Truck Series. I believe it is a frightening trend, as most of these are victims of sponsorship losses.
Instead of trashing these teams though, I wanted to hopefully open up your eyes about the practice. While there are certainly those teams out there who are doing it for nothing but the profit, for many, this isn’t exactly the case.
Lets picture for a moment that you are a NASCAR car owner. Your team runs mid pack each week, but it’s a solid operation and it’s respectable. Then something unforeseen happens and you lose your sponsorship. Maybe you only had a partial deal, or maybe an agreement fell through. And now, no matter how hard you try, you just can’t find a replacement. What do you do? You really only have two choices: shut down completely because of lack of funding; or trim down your staff and begin starting and parking until something comes along.
This exact scenario is what many are now starting to face. Instead of putting entire shops of people out of work, owners are using the start-and-park startegy to weather the storm and keep the doors open until they can put money together. It buys the owners more time to find sponsorship, and it keeps the employees’ paychecks coming on time. Knowing that, it’s hard to really blame them for it.
Something else to consider is how this affects these owners and teams. Remember that people get involved in racing because they want to compete. They want to go out each weekend and try and be the best. Starting and parking though, goes against the very idea of competition. Pulling out of a race after only a few laps with a perfectly good race car is a very difficult thing to do. Add on top of that the fact that most fans and NASCAR itself severely disapprove of the practice, and you begin to see how demoralizing it can be.
In a perfect world, we’d have 43+ fully funded teams showing up to the track each weekend to race the full distance. But we don’t live in a perfect world. In reality, the world is a very tough place to try and race. I know for many of you, the simple mention of the phrase “start-and-park” gets your blood boiling. Trust me, I understand. It makes me sick to my stomach to watch these cars pull into the garage each weekend after a few laps.
Do me a favor though? Don’t forget that sometimes bad things happen to good people, and tough choices need to be made. Not all of the start and parkers are the enemy.
The last two seasons have been rough for this sport. Sponsors have left, fields have shrank and teams have folded. Mergers became the new name of the game for many fledgling organizations and layoffs plagued the industry. What NASCAR was faced with was a forced correction thanks to a bad economy. As a result the strong just got stronger and the weak generally got a lot weaker.
On top of a weakened economy NASCAR alienated a lot of fans with the introduction of the COT in 2007. The car, with it’s boxy appearance and rear wing, didn’t sit well with a lot of people. Some have argued that it’s hurt the competition. Whether that’s the case or not is open to argument – I know NASCAR would disagree.
To be sure, the last 10 years can be summed up in one word – change. Over the last two seasons though we have seen a sanctioning body more willing to listen and embrace changes everyone can get behind. We saw NASCAR institute double-file restarts, more attempts at G-W-C finishes and the return to the spoiler.
Their recognition that the sport isn’t perfect has benefited everyone. What I’ve seen over the first few weeks of this season is a sport that is more tough, more rough and more exciting.
While we’re far from where we once were, things are starting to look up. The ratings for this season’s races haven’t been all bad – they were up at Phoenix and Atlanta and they performed pretty well against the backdrop of a compelling USA v. Canada hockey game. The rain delay didn’t help at Martinsville, but overall Fox is down around 4%. While down is certainly not good, 4% is better than the 11.5% they were down this time last year. More than growth, NASCAR needs these numbers to stabilize. Hopefully they’re starting to do that.
On the competition side we’ve seen a competitive Earnhardt Ganassi team and an almost renewed Penske Racing team. In seven races we’ve had five different winners from five different teams. Sure Jimmie Johnson has won three races, but maybe he’s peaking early? All I know is, is I’ve seen some great finishes this season.
Like a recession in the economy, it’s going to take time for recovery to take hold and for the effects to be seen. I’m hopeful after a couple of tough seasons we’re starting to see the signs of recovery in NASCAR.
What do you think of the season so far? Have you been enjoying the season? Do you like the changes NASCAR has made? Has the competition been better?
A Happy Belated Birthday!
I’m disappointed TNI readers. It was our birthday on April 7th and no one remembered – me and TC included. Oops.
As we enter our third year on this project I just wanted to say thank you to everyone who comes to the site, reads the posts, and contributes to the conversation. TC and I have enjoyed our time working on this and look forward to the year ahead.
As always if you have any questions, comments and/or concerns please don’t hesitate to get into contact with us. We’re pretty good about emailing people back.
Thanks again to everybody who comes by. We know your time is valuable and we appreciate you make us a part of your day!
Earlier this afternoon I was surfing through major news Web sites checking on the day’s happenings. As I scrolled down the page on MSNBC.com I got to the ‘other top stories’ section. About halfway down was the headline ‘Opinion: NASCAR In Trouble.’ Next to it was a separate article that said something like ‘But Danica Could Help.’
Turns out the opinion piece was written by Scene Daily’s Jeff Owens, he called it “Five things NASCAR needs to happen to rekindle fan interest.” The piece was nothing ground breaking, or earth shattering (if not for the point about the spoiler the Five Things piece could have been written a year ago) but it’s just another example of a marginally negative piece that got a lot of attention.
(Before I go any further, let me say this is not a knock on Jeff Owens he’s a good and talented guy. It just happened to be his story that sparked the idea for this. It really could have been anyone.)
Over the last year I have gotten so tired of these doom and gloom stories. I don’t personally want anything to do with them. Sure things aren’t great, but do we need to make it a constant talking point? No.
I wonder too if anybody has considered that these negative stories and negative comments on mainstream sports and news channels are hurting the sport, and driving people away. It’s becoming a self-fulling prophecy.
Larry McReynold’s last year while talking on the subject quoted Darrell Waltrip. Waltrip compared it to people telling you over and over how bad your favorite restaurant is. Eventually your probably going to start to believe it. You’ll probably stop going. I think Waltrip makes a good point.
Now I’m not saying you need to drink the “kool aid,” or become mouthpieces for the ‘all is fine’ line from NASCAR (it’s not), but can we start focusing on whats good? There really are a lot of positive things to talk about (like this).
I know the lawsuits and penalties and economy talk are all very topical, and it’s fun to examine all of NASCAR’s problems, but at the end of the day it’s all irrelevant. They’re at best distractions (at worst they’re hurting the sport) to what is important and that’s what happens on the racetrack.
Stock car racing returns to Daytona this weekend with some highly anticipated storylines. Please, have fun, enjoy the racing, and don’t get bogged down in all the background noise.
For those of you who follow us on Twitter, you know every Monday we do a ‘best and worst’ of the weekend tweet. With the 2009 season now in the bag, we thought it might be fun to bring it over to the blog and ask you to do your best and worst of the 2009 season.
2009 certainly wasn’t short of any interesting, and compelling story lines. Toward the end of 2008 and through the entire 2009 season the economy was on everyone’s mind. The troubled state of GM and Chrysler forced the manufacturers to make cuts in their NASCAR spending; several sponsors announced their intention to leave the sport; and perhaps most noticeably the stands at many tracks were far from capacity.
Despite the bad economy, 2009 saw the start-up of several teams. After being laid-off by Bill Davis Racing in the off season, Tommy Baldwin started his own team. Jeremy Mayfield, who had been out of a full time ride since 2005 also started a team. TRG Motorsports also began running a car full-time in the Cup Series.
From Carl Long to Jeremy Mayfield, NASCAR also had its fair share of controversy in 2009. Long was suspended and fined following the All-Star race after an inspection of his expired engine revealed it was too large. Jeremy Mayfield was indefinitely suspended May 9 after NASCAR said he failed a drug test. Mayfield contends the failed test was caused by a combination of Adderall and Claritin D. He sued NASCAR.
It wasn’t all bad though. Juan Pablo Montoya had a breakthrough season scoring seven top-fives, 18 top-10s, two poles and his first Chase berth. After running two part-time seasons in 2007 and 2008 Mark Martin joined Hendrick Motorsports full time and came back with a vengeance this season, winning five races and finishing second in the points.
We even had some promising prospects show what they were made of. In just his second full season, David Reutimann won his first race and came just short of making the chase. Marcos Ambrose also started to show his potential in just his first full time season. He scored four top-fives and seven top-tens finishing 18th in the points. No doubt they’ll both be teams to watch in 2010.
We also had a slew of first time winners with David Reutimann, Joey Logano and Brad Keselowski all taking the checkered flag.
And how about Hendrick Motorsports? They had thirteen wins on the season and Jimmie Johnson did the unheard of, winning his fourth straight championship after seven wins, 16 top-fives, 24 top-tens and four poles. As a team they went 1-2-3 in the standings, the first time that has happened.
So now it’s your turn. What was your best and worst of 2009? Please remember to keep it clean (I know where you’re going to go with this) and treat others the way you want to be treated (if I see anything over the line it will be deleted).
Sponsorship, or lack thereof has been on the mind of just about every team executive in NASCAR this season. While the year has been rough for the sponsorship market as a whole, in no place has it hit harder then in the Truck Series.
The biggest anomaly in the series are the amount of experienced, winning drivers that have been affected.
Take defending champion Johnny Benson. He became the latest victim of the economy this week after Red Horse Racing shut down his unsponsored team. I believe the only time the team actually had any deal was at Daytona with K&N. The rest of the time the truck has remained white.
Now he hear Timothy Peters is joining Red Horse from his own fledgling organization. Peters’ biggest asset is the Strutmasters sponsorship he brings with him.
Todd Bodine doesn’t quite know Johnny’s plight, but he has been driving race-to-race all season. Every time Bodine has been on the cusp of reaching his final race, sponsorship has come through and they have been able to continue. The brilliant thing this team has been doing is publicizing their struggle and they have gotten a lot of great exposure as a result.
Germain ran several very small sponsors early on in the season (which were plugged heavily during the broadcasts), and then signed Copart for the last several races. Copart has three races remaining with the team this season. After that the team finds itself in a familiar situation.
Another former champion feeling the pinch is 26-time winner Mike Skinner. He joined Randy Moss Motorsports this season after Bill Davis Racing folded. Skinner brought with him a partial sponsorship from Exide and some support from Toyota, but he and most especially his wife Angie have been working very hard to put together smaller deals for the holes in his schedule.
They have had everything from Daytona Beach law firm Rue & Ziffra to Bad Boy Mowers on the truck. Mike and Angie, instead of waiting and hoping on others to find deals, took the initiative and are keeping Mike’s career alive and still very vibrant.
Unfortunately NASCAR has been less than enthusiastic about furthering the Truck Series. It has become the overlooked series, almost an after thought by the sanctioning body. If you want an example of this look at purse money. Just something to consider; the top grossing driver, in terms of purse money, in the Cup Series is Tony Stewart. He has pulled in $3,459,120. In the Nationwide Series, Kyle Busch is tops; he has earned $506,620. In the Truck Series Todd Bodine holds the crown with $286,875 in winnings. He is not the norm either. The points leader at the moment, Matt Crafton, has pulled in $130,000 less than Bodine. While it is true it’s a little cheaper to run in the Truck Series, it’s not that much cheaper.
Another big issue the series faces is a lack of media exposure. While they have been making ratings strides on Speed, the untapped market is very large. Despite the extensive amount of programming that covers the other series, the Truck Series has very often left out in the cold.
And now we have reached the point where fewer than 30 trucks will even actually finish the race. At Texas there were only 22 trucks running at the end. This weekend there are 32 on the entry list and I counted at least six start and parks.
It’s hard not to commend the teams who are actually fighting and going the distance. I can’t say enough times how much I love the Truck Series. It is the most fun to be around and the best racing you’ll see most weekends. Unfortunately NASCAR has been slow to give the series the credit it deserves. It will be interesting to see how the remainder of the season plays out for those sponsor-challenged teams.
I think I should probably just start a problem series. I have been writing about it a lot lately. But I digress…
At the beginning of the season many in the media would have had you believing the world was crashing in on us. They were predicting empty race tracks, fleeing sponsors and failing teams.
Well six months into the year and four months into the season, things aren’t quite as bad as many predicted. Sure a couple teams have folded (the No. 8 car and No. 28 car), the independents are starting to struggle, and sponsors aren’t quite clamoring to spend tens of millions of dollars in the sport, but are things really that bad?
For the last several months everyone has been screaming about television ratings. Yeah they’re down, but if you look at them compared to other sporting events and programming, the sport really isn’t doing too bad. I unfortunately don’t have easy access to the Nielsen ratings, so I am working with what I can find online, but consider this: an average NASCAR race (not the 500 or another big race) does just as well as the NBA Finals did last year. They averaged about 9 million viewers.
That number is also big enough to beat a lot of primetime programming on major networks (not including Greys Anatomy or CSI of course). It also beats the hell out of the top rated cable programming.
Take a look at some older Nielson ratings and compare it to NASCAR this year. They’re down, but they’re no means bad.
The Chicken Littles are also pointing to the down attendance at the tracks. Now if you take the track estimations and subtract 30 to 40,000 (which is probably closer to the truth at some of these places) they are still nothing to scoff at. Any sport would give anything to have 100,000+ fans at their events every week. NASCAR is crying about it.
Sure it’s not the sell-out crowds we got just a few years ago, but still it is very good. The Super Bowl this year had just over 71,000 in attendance. With the exception of some of the smaller tracks, NASCAR easily beats that week in and week out.
Now I know what you’re saying, if there was a football stadium big enough (the new Cowboys stadium perhaps) they would have NASCAR-like attendance for the Super Bowl and that’s probably true (NASCAR couldn’t hope to have the TV viewing audience though), but the fact that NASCAR does that good every week is a very good thing.
So now that we’ve established things really aren’t that bad, I ask you, what is different between this sport and others?
The answer is the negative media attention on the sport.
Baseball attendance has been down and NHL and IndyCar TV ratings have been mediocre on Versus, but you don’t hear their respective press corps bashing the sport. In fact it’s quite the opposite. I have read several stories about how positive everyone is about the Versus ratings despite the fact the ratings have been cut in half for some events and how MLB is looking forward to a jump in attendance once the summer hits.
I feel like this sky is falling mentality has created a very negative perception of the sport by not only the general public but by the fans. I think much of the anxiety fans are feeling and another reason why they aren’t tuning in is the fabricated negativity. When you are reading every other day about how bad things are, or how bad things are going to be you’re going to start to believe it. I know NASCAR is attempting to combat this, but they can only do so much.
Things aren’t quite as great as they have been in previous seasons, there is no denying that, but are things really that bad?