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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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!
Following Talladega and comments by NASCAR spokesman Ramsey Poston on his blog, there has been a lot of discussion of the coverage of NASCAR races; more importantly how that coverage is shaping the audience’s perception of what they’re seeing.
All I can say is, it’s about time. Earlier this year I took up the topic of NASCAR and perception. No matter your feelings on the state of the sport, it’s undeniable that the color of coverage shapes what people feel.
Dustin Long interviewed Brian France on the issue of TV coverage. He touched on this issue. He said:
“We fully expect a lot of criticism for any number of reasons, judgment calls that are made, officiating calls that are made and some strategy or policy decisions that are made. We’ve always had that. That’s OK. What I’m saying is in opinions that are under the guise of criticism or being critical that just go on and on and on without much thought that’s different from some policy or rule violation that we didn’t handle correctly, somebody is more than fair to criticize us. It’s just there’s an unprecedented level that occurs when you espouse your opinion about how to do one thing or another.”
If you’re truly being honest with yourself, unless you’re out gathering news, where you get your news or in this case your racing coverage, is going to shape how you feel about it. For instance if you watch the local TV station that is big into covering local crime, chances are you’re going to believe crime is higher in your city. Likewise watching Fox News over MSNBC is likely going to shape how you see issues.
How many times in the last two seasons have you heard about ratings declines, or sagging attendance? The fact is attendance is down in the NFL and ratings are down 6% for MLB on ESPN (we’re no worse off than any other sporting event). If you hear something enough (like this race is boring) though you’ll start to believe it, it’s human nature. The sky is falling, the sky is falling!
I personally found the coverage a little much. I doubt the brass at ESPN was thrilled with it. They’re only driving away the audience for programming ESPN’s already paid for.
The NASCAR writer for the Oakland Press wrote a blog post giving kudos to ESPN for standing up to NASCAR. What are they standing up to NASCAR about? At the end of the day they’re only hurting themselves. ESPN is spending $270 million a year or $2.16 billion (from Sports Business Resource Guide) over the life of their contract for the rights to broadcast NASCAR races. Now you tell me, is it in ESPN’s best interest to say, “hey this product we’re broadcasting is really boring?” I don’t think so.
A couple of weeks ago Dustin Long did a wide-ranging interview about the state of the sport with Larry McReynolds, Kyle Petty and Jimmy Spencer. One of their big criticisms was the negativity that comes out of the sport’s media. While I think this was a pot calling the kettle black moment (they went on to criticize the sport pretty heavily) they made a good point.
Larry McReynolds said:
Darrell has put a great analogy. He goes, if you go to a restaurant and you’ve been going to that restaurant for years and you love that restaurant but you constantly read in the paper, it’s a bad restaurant, it’s a bad restaurant. Eventually, you’re going to say, I’m not going to that restaurant. Even if they rehire a complete new chef, staff, you’re still going to be hesitant about going back to that restaurant.
From time to time I like to watch old races and I’ll be honest with you, it really doesn’t look all that different. There aren’t constant battles for the lead, races do sometimes get spread out, and sometimes one car just dominates. The one big difference is you don’t hear Eli Gold or Ken Squier or Bob Jenkins criticizing the product. If you don’t believe me, track down a race from 10 or 15 years ago.
I don’t mean to suggest that NASCAR fans are more susceptible to this. But I do believe that this negativity runs rampant around here; more so than in other sports. When was the last time you were watching an NFL game and heard Joe Buck say how boring it was?
I think just like in every other sport, announcers need to walk a fine line. Criticize the league or sanctioning body for controversial decisions, fine; don’t drive fans off though by criticizing the product.
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?