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Is NASCAR Back on Track?

Once the meteorically rising star of television sports ratings, NASCAR banked into the wall six years ago, when its TV audience began a steady and precipitous falloff through 2010. But the 2011 season was a welcome reversal for the auto racing outfit, as numbers rose for the first time in six seasons with a 10% bump in total viewers and a 17% climb in the elusive male 18-34 demo.

While proving cause and effect regarding television ratings is often a fool's errand, NASCAR had plenty going for it in 2011, including a wildly competitive season leading to a storybook ending in which two of its most wellknown drivers literally battled to the last lap of the last race to decide the Sprint Cup championship. NASCAR wants to build on that momentum by launching new long-term initiatives to rev up parts of its business like social media to attract a more young and diverse audience.

The ratings rise has not remotely returned the sport to its halcyon days when it was often mentioned as heading to become the No. 2 TV sport behind the NFL, and its audience has been aging up. But NASCAR does have a positive momentum story to tell right now, and the timing couldn't be better. While its current TV deals with Fox, Turner and ESPN (which split the season into thirds, in that order) don't expire until 2014, CEO Brian France would like to move talks along sooner than later—which makes sense given the astronomical fees being paid to rights holders these days thanks to the new players in the market and the relative strength of live sports in this long tail world. And France is bullish on NASCAR coming off the start line fast in 2012, which opens with the sport's biggest race, the Feb. 26 Daytona 500 on Fox, kicking off a season that will also include consistent participation from ratings draw Danica Patrick.

France sat down with B&C editor-in-chief Ben Grossman to talk about what went wrong, what helped turn things around and what the sport needs to do better to get its ratings back into Victory Lane. An edited transcript of their conversation follows.

You guys were once the up-and-coming story in TV sports. What happened?

A lot of sports leagues that are well-marketed and wellwatched have their own cycles of momentum. If you look over a long horizon, some sports will have better moments over a period of time. When they do in our case it was great, and even when we don't, we are still a very strong franchise; someone else might just be having a [better] moment. That's a lot of it. It's not surprising, no one [goes up] forever.

Is getting the young male demos back up to where they used to be your top priority?

Yes. That's everyone's issue. If you look at other sports that have been aging for different reasons, they didn't adjust the game a little bit, not enough offense or whatever else; you see leagues making adjustments. We're in the same boat, trying to tweak things and figure it out.

Ratings seemed to possibly bounce off the bottom last year. Do you know why?

We do. Story lines matter, and if you are fortunate enough to get those it's very helpful. In our case we have an additional challenge and that's keeping the racing competitive; there's a mechanical component to that, there is parity. We had 15 winners last year [in 36 races]. We had close ! nishes, and the final part of the year was dramatic, of course. When the story lines come together organically, and when it all comes together, you get a great outcome.

How do you improve on last year?

The good news is that a finish like that always propels you into the following year. Anytime you have an incredible playoff run in sports or a seventh-game moment, the feeling that fans get [from] one season into the next is dramatic. That will help us. We will get off to a fast start, there is a lot of momentum. But we need other story lines to develop. We'll see how that goes.

Did your ratings bounce come from traditional NASCAR fans, or more casual sports fans?

The biggest increase came from the demographic we wanted the most, which is the young male demo, which would make me think it is more of a casual fan that is looking on any given weekend frankly at what are the interesting games or races they want to watch, and we get caught up in that. We had a lot of new winners, like [Daytona 500 winner] Trevor Bayne, who captivated the casual fan and helped us.

What were you doing to draw the traditional NASCAR fan last year?

What they like more than anything is a focus on the racing. The marketing and the rest of it, they are less interested in that. They like it when close competition happens. So we create really competitive racing. We are not as an industry talking about sponsorship and things, they don't care about any of that. They just care about how is my driver doing or how is my team doing.

So the "Have At It, Boys" philosophy for the drivers is for those fans?

Those are the kinds of things they like. So we can affect them from a format and how we oversee the events. But we can also get in our own way on that—we can trip ourselves up.

Then how did you go after the casual fans?

We did some things like streamline the points system so they can follow and understand it easier. We created a wild card like in every other sport for how you get into our playoffs based on wins. And then there are some things that just fall your way, certain drivers that have a lot of charisma. We had two of the best in our sport in [runner-up] Carl Edwards and [champion] Tony Stewart. Do it all correctly and you get a shot at those fans.

What did your TV partners tell you about last year?

They liked the fact that we really got working on things we could control. And we were working on things in the future, like our youth initiative and social media and digital media that will help draw people in the demo to the broadcasts and the events. We have done an impressive amount of internal review and I think they appreciate we are not hoping for things to just go our way.

Did NASCAR used to just hope for things to go your way?

I don't think we did, but we are doing more. We are hiring smarter, better people and we are investing more. Even in this economy.

What did TV partners tell you they want to see you do differently?

They were pretty satis! ed with the presentation of the events. Fox has always wanted to not have an open weekend after the third or fourth weekend, they were pretty critical about that, and we eliminated that. [With] the schedule, there is always input on start times. We moved them around a bit last year and we will do it again this year. But it's not just about what they want from us. We are pretty aggressive about what they need to do for NASCAR. It's a two-way street.

So what do you want from them?

We are always the sport that is under-covered given the ratings and size of the events. In particular, ESPN. They just have so many platforms. So we are pushing real hard with them to have a more integrated approach. We have hired people to service them better, so we can help them accomplish that. They have the most assets to be deployed; it doesn't mean everyone else doesn't have some big ones and good ones. We are going to work to make them a better partner.

How do you respond when they say there is no news to cover midweek from your sport?

That's fair. We have to help them understand what is important midweek, and why it matters if a team has problems back at race headquarters, how that's going to hurt them at the following event, or if they historically haven't done well at a track, how are they going to change that? A lot of that is us educating their editors or producers as to why that's important.

Your TV deals are up in 2014, but when do negotiating windows open with your current partners?

Not for a little while, but we are having conversations, because a lot of our partners have been clear they would prefer to renew. All things being equal, our first hope is that the incumbents do renew.

Do you want the same set-up, where each TV partner takes a third of the season?

That may change. I don't know exactly what, but we are going to look at that. We will have an open mind to a certain extent.

But doesn't it make sense to have that continuity, so fans know where the races are week to week?

That is certainly a valid thing to say. I just don't know if it will work out that way. I do know Turner would like more events. But it's also subject to all the calendars, and you need to ! gure out how to make that work.

Have you been surprised about the pricing for recent deals like the NFL, Olympics and World Cup? Do you ever step back and say, "Wow"?

Yes, I do sometimes. Right when you think the values are one place, they move up.

So given that, do you want to move your TV talks along earlier?

I think you are seeing some of the other leagues renew earlier than their windows would indicate. The NFL certainly did that recently. And so we are not actively in a bunch of high-level negotiations, but there are clearly some really good indications that our partners want to make sure they are with us for a long time, and we want the same.

When will talks heat up?

I think it could heat up at any time, that's my sense. It's not cold now, we are having conversations. My sense is things will happen sooner rather than later, and sooner than they normally would in a cycle of renewals.

Will Daytona ratings be up this year because of the competitive finish to last season?

It probably will be because of the momentum.

Will ratings continue to climb overall this season?

I don't know what all is going to happen in match-ups, and we will have the Olympics which will have some negative effect on us. If we can make that up in other places, sure. There is an enormous thing on this—do you get the right match-ups. All that stuff really matters, that's the last 10-15%.

Where are you on broadcast versus cable? Do you need to be on a broadcast network, is that important to you?

We certainly see the line blurring, that's for sure. There is still some cachet to being on a network, and a little more in the distribution universe as well. So we certainly see where money is going. And subscriber fees support higher rights fees. We get that and we generally think the line is pretty close, but I think there is still a network cachet that exists.

Are you going to change the postseason Chase format?

I think I'd be shot if I changed the format, frankly. We are not going to change the format.

Is your season too long?

It's long, and it's long because we can only play one game per week. And we have 36 events. It's long by definition, but it's necessary and it works fine.

How much does it hurt that Dale Earnhardt Jr., your most marketable driver, doesn't win races?

It hurts. It hurts. He is trying to win and get his team to have the confidence to not only win one but rip off more. He did improve and made the Chase. He's a big franchise. He's the most popular driver in NASCAR, so it would help us if he would win.

Are you taking back digital rights from Turner?

We are partners in those rights now and we intend to have a lot more influence on those rights. There will be some partnership component with Turner, but we will have a much more dynamic role in that relationship.

When does that happen?

We are in those discussions now.

Why do you want that?

They would agree with this: We have to have more control over digital rights, and for a variety of reasons. Notably, sometimes when you are just financial partners, there are strategic things that are going to be important to us but not to them. So we have to change the relationship to accommodate our strategic interests, and they agree with that.

You and your teams have been affected by the economy. How challenging was 2011 from a sponsorship perspective?

It remained challenging, but I think most of our partners would tell you there was a turn in 2011 to the positive. But it would be inaccurate to say we are unaffected by things. The uncertainty of all these companies we all hear about, that they are so careful to deploy assets and hire people, does and can have an effect on sponsorships. But we renewed Sprint and some [other] big companies.

If you could put a race anywhere that you don't currently have one, where would you put it?

New York.

Is that on the horizon at all?

Not with this economy, not until things change around.

Would a New York race help TV ratings?

I don't know. It would certainly help the advertising community that supports the networks, that's for sure. It would help us on some level, but I don't know how much.

NBC has a new network, Turner wants more sports for TruTV, CBS has a new network, Fox could launch a national sports network at some point. Do you want to be on an upstart network?

We would have to look at it. There are certain distribution thresholds and programming positions that a given cable network will have to have for us to put our premium product on, but we have a lot of other product too. It's certainly good news for right holders, though. And if you look at all the deals that have transpired over the last 12-18 months, it's never been more valuable to have important sports programming.

How much did the wild finish to your season actually help ratings?

We know it did. We don't know the number. There is still a little bit of art going on with the science. But it does create those game-seven moments.

Is it better to have a dominant figure like Tiger Woods or parity year to year like the NFL?

I think both have appeal. In certain points along the way you want both. In particular if you have a driver in our case that has a lot of bravado and personality to match a great performance. Someone like Tony [Stewart]. A dynasty has been good for most leagues. When they happen, they are good.

Your title came down to clean-cut Carl Edwards and Tony Stewart, who might punch you in the face at any moment. Who is a better spokesman for your sport?

I thought about that before they settled it, of course whoever won won, but I came to the conclusion both would be good champions. Carl is going to win some championships, he's just too good not to, so the way Tony did, I think it worked out the way it needed to.

Everyone talks about creating superstars, but does your sport need villains?

I think some version of a villain, yeah. I think you need people that no one cheers for, I think that's healthy. But there are limits to that. It's great when there is someone that acts different, has a little bit of bravado, that typically is good.

So do you want drivers fighting by the trailers or not?

No, we don't want to see things escalate to that. But they have emotions and we don't want them to have to put them in a briefcase either. They ought to show their emotions and all of it, that's fine. There are limits, but I would like to see them show more, not less, of their emotions.

What do your TV partners tell you about that? SportsCenter shows a lot of fighting and big hits in hockey highlights.

They are not going to tell us they would like to see a boxing match on the straightaway.

What do you as a sport need to get better at?

A lot of things. Social and digital media is a great opportunity for everybody, but even more so for us because we are under-covered.

Do you need to grow social and digital media because you are so far behind everyone else?

I would say we are middle of the pack. We are lagging behind some groups for sure, but we are not at ground zero.

The Democratic National Convention is coming to Charlotte this year. Are you doing anything with that?

We are, I don't know what, but we are going to have a good time with them coming in. It's obviously a whole different medium, but it's in our backyard and we will aggressive there.

In all your internal research, what did you learn that surprised you?

I learned there was a lot of work to do, despite all the success we have had in many areas. 

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