Wednesday, February 14, 2007

Let’s get ready to go racing in NASCAR’s streets

In what can only be termed a major embarrassment, NASCAR Tuesday announced four Nextel Cup crew chiefs were suspended and their teams were fined a total of $150,000, 150 driver points and 150 car owner points Tuesday afternoon at Daytona International Speedway.

Evernham Motorsports took the biggest hit as its lead car, the No. 9 Dodge of driver Kasey Kahne, lost its team director, Kenny Francis, for four races beginning with Sunday's Daytona 500; Kahne was docked 50 driver points and owner Ray Evernham 50 owner points according to

NASCAR CEO Brian France faced the media Tuesday afternoon delivering his annual “state of NASCAR” address that included a lengthy media Q&A. To no one’s surprise the first question France was asked was related to the cheating allegations directed at Evernham Motorsports and if France felt coming on the eve of the Daytona 500 what message did France believe was being sent out and how was he as NASCAR’s CEO going to address the fallout?

“You can't expect with 120 cars, thousands of rules that are out there, that some teams are either going too intentionally cross the line or inadvertently cross the line. Either way, it's our job to protect the integrity of the sport.

“What we said in July in Chicago was that we weren't happy with the frequency of those, too many of those. There's going to be some. You can't bat a thousand with a hundred plus cars. As more on the intentional side began to happen, we were going to ramp up the penalties in a strong way. As Mike Helton said, whatever it takes.

“Now, whatever it takes ought to be measured because we ought to be looking at, you still got to have the punishment fit the crime as well as be a deterrent. So we'll balance that. You can be assured; you'll read the penalties later on today. We don't know the details on the 55. But as these penalties or as these infractions become more frequent, you will see us undeniably step up the punishment.

“We'll find the right common ground to make sure while there will be some inadvertently flop over or make a mistake, but the intentional pressing, trying to get ahead of the rules, will not work. We'll make sure of that one way or the other.” France offered in directly dealing with the issue of the day.

NASCAR officials remain concerned about the media coverage their sport receives. That didn’t escape the media Tuesday especially when put in the context of accessing the fallout from the suspension’s relating to the Evernham Motorsports team. France is well aware damage has been done to NASCAR’s image and reputation.

“That's part of our problem. Not this group. This group is very sophisticated in what NASCAR and this industry is all about. But many parts of the country simply don't know how to cover this sport, what's important on a Tuesday, not talking about the Daytona 500, but in a normal week what are teams doing on a Tuesday or Wednesday to prepare to win the second-most important or first biggest sporting event in that particular weekend.

“The truth of the matter is that talk radio, which NASCAR is not very -- doesn't have much of a place, or depending on where you are, they just simply don't know how to cover us. We're working on that. It's our challenge.

“I don't think the cheating thing, and listen, I said earlier, 120 cars, you have a lot of rules that are up for interpretation, you're going to have a couple of people who want to try the system. There's a lot on the line. That's been going on forever. It will go on forever.

“It's our job to escalate penalties. You're going to see it today. It will be undeniable that when you keep pushing the system and test the integrity of the sport, we will do whatever it takes. That doesn't mean you go out and get somebody in the electric chair, but it does mean you step up the penalties to a level that makes it a true deterrent.

“Even when we do that, somebody without much to lose or somebody who thinks they're smarter than somebody else, will always try. So don't ever think we'll be here three years from now, and NASCAR was so tough, they did all these things, they have nobody pressing the system. It's unrealistic. Some people press the system, they don't know they're pressing the system. Literally unintentionally. Maybe it's rare, but it does happen from time to time.

“Rest assured that no alarm buttons are going off. But we're noting it. Today we're huddling with myself, Mike, the board. Integrity matters to everything. Whatever it takes, we will come forward and make that happen.”

Many of the questions raised by the media Tuesday focused on where NASCAR is headed as a business. NASCAR had hoped to build a super speedway on Staten Island; those plans fell apart in early December. NASCAR rarely gives up on moving their business forward and for the last few years poured millions of dollars into the initial stages of developing a racing oval that would seat well in excess of 100,000 in one of the five New York City boroughs. Is the New York market still on NASCAR’s radar screen?

“Well, I hope so. Obviously there's been a setback in the Staten Island situation that ISC was trying to develop. As they told me, they certainly have not given up on the New York market. They're hard at work trying to figure out the next opportunity there.

“It's important to the sport to be in New York City for obvious reasons. I don't want to put a timeline on it. It's a very difficult project. There's a number of people working on it. It's not something that I work on myself personally. I don't have anything to do with that, other than that to be encouraged when I hear that ISC or someone else is making some good progress there.”

In what seems strange, there are plenty of tickets available for Sunday’s Great American Race. NASCAR unlike most sports begins their year with their biggest event, the Daytona 500. While the Daytona Motor Speedway can accommodate close to 170,000 it still seem remarkable there are tickets available for Sunday’s event.

If NASCAR is having issues selling tickets, there are far greater concerns relating to the sports falling television ratings. While it still maintains the second-highest ratings of all major sports in the U.S. behind the NFL, its popularity has taken a decided U-turn in the last couple years. Ratings dropped in 31 of the 36 regular-season races last year compared to numbers posted by Nielsen in 2005. Overall, viewership was down 10.6 percent - or about 11.7 million fans.

In 2005, about 214.6 million fans combined to watch all 36 Nextel Cup Series races on television, according to Nielsen. Last year, that number dropped to 191.9 million.

“My view on television ratings, I mean, we look at them a little bit longer cycle or window than maybe you would think we would. TV ratings, depending on story lines, other competing things that are going around, are going to go down and up a little bit. We don't get too hung up on it. We went down a little bit.

“We look over a long period of time, two, three, four, five years, trending the right way. One year, that's pretty expected. You're going to have two steps forward, one step back occasionally.

“My expectation is we'll be up in TV ratings in '07 for the all the reasons I mentioned in my opening remarks, all the momentum we have that we didn't have last year.

“Look, we have a very strong fan base. With all the TV ratings slightly down, we're the No. 2 sport on television. 17 of the top 20 events were NASCAR events. We likely carried the weekend or were second, might have beaten the Pro Bowl this last Saturday. Very, very healthy sport. The television partners that we have - don't take my word for it, look at the investments from the TV partners who put billions of dollars on the line looking out eight years, not 12 months, and look at the investment that the car sponsors are making. They're expensive investments. They're doing their homework. This is the best value in sports. We're going to try to keep it that way.” France said.

One issue France didn’t dodge has NASCAR reached its peak and is the sport about to plateau out?

“No, I don't think we've plateaued at all. I think we had what I call a lot of things that were coming in '07 that are coming right now that weren't there in '06. We had obviously some TV partners that had other priorities at the time rather than us once those decisions were made. It was reasonable for us to assume we were going to sort of cycle around here.

“But we just know with this undercovered issue, with the interest the sport has commercially, ESPN will undoubtedly, because one of the areas that we can stand some growth, that is the casual sports fan. No one reaches the casual sports fan more often and more impactfully than ESPN. We're excited, not only here, but they're treating this sport like we would hope they would, which is a true franchise sport from how they produce their events, how they promote it, studio shows, the talent they're putting forward. It's an enormous commitment. That's going to help with us that casual sports fan in a very big way. It's going to help everybody.”

The Florida Times Union spoke with several speedway owners and managers who offered several different views on the direction they believe NASCAR should head towards as a business.

"It ebbs and flows," said Ed Clark, president of Atlanta Motor Speedway. "It comes and goes, depending on what's going on in our sport. We all built a bunch of new seats six, eight, 10 years ago to keep up with the demand. ... Corporate spending has leveled off or dropped off. That's where we're seeing our biggest decline."

Clark said the sport faces new challenges. He said speedways should consider smaller venues with greater perks. Instead of a 125,000-seat grandstand, he said it's better to have 90,000 seats with a greater emphasis on comfort.

"Baseball did it right by building smaller stadiums with better seats," he said. "That's the way of the future."

Robin Braig, president of the Daytona International Speedway, has 170,000 seats to sell for every race. Being one hour away from Walt Disney World, Sea World, Universal Studios and the Kennedy Space Center creates competition for the entertainment dollar.
"There's a huge attention for the sports and entertainment dollar, and we want our share," he said. "We're also close to Homestead, Talladega and Atlanta. The racing fan has a lot of choices. And we're the highest-priced one. We ask the most and we have to deliver the most. We're not sold out, but we expect to be sold out. We're not concerned, but it's definitely hard work."

Jeff Gordon one of NASCAR’s true superstars and a key driver in helping NASCAR become much more a mainstream sport suggested to the Florida Times Union today’s NASCAR should focus on keeping its current fan base happy.

“I think it's risk vs. reward, like anything else in life,” he said. “They took a big risk changing to the Chase format, and I think it's turned out to be a pretty positive thing for the sport. It's nice when you're not afraid to take risks, but sometimes you can go too far with it. ... I don't think [too much change] is going to be the case. I think there is more excitement and curiosity that's going to bring maybe more fans, but who knows?

“... This Car of Tomorrow is a big risk. We all hope it pays off because we're all in this thing together and we're all one big team. Sometimes we're not always on the same page and sometimes we are, but at the end of the day, we're really and truly all in it together. And we're all hoping it's going to be something that's going to help the sport grow in the future.”

In what shouldn’t have come as much of a surprise most of the issues the media wanted to ask France about focused on the business of NASCAR. Rockingham losing a date doesn't sell out. You have lots of empty seats at California, empty seats at the 600 in Charlotte. What is NASCAR doing, if they're doing anything, to try to help change that or address that?

“Let me say we had a few empty seats in California. Still did 90 something thousand, whatever, double what they did in Rockingham. Charlotte's been on the upswing. The Chase has been additive to their fall event. They've always done well at the 600. These speedways have a lot of seats. But we're selling more tickets than ever. Look at the public company's stock price. That's based on how well they're performing. We're selling more tickets. Doesn't mean we're selling them all.

“When we move to Phoenix for a second date, they sold every single ticket for their spring race as they did the fall. We got to remember we've also added, and we're talking a lot about California, the Southwest, we've added a lot of events there. When you go back to Dallas, you go west and add a second in Phoenix, you add a second in California, that's a lot of supply coming online in just two or three years of time. It takes a little while to absorb that.

“We don't just add one race, we add a whole weekend. That can be a Thursday, Friday, Saturday, Sunday. We're way up in ticket sales, some one event here or there. But the sport is in great shape. I'm very comfortable saying that.”

The Fenway Sports Group led by Boston Red Sox owner John Henry will later today announce a substantial investment (north of $60 million) in Roush Racing. If you’re NASCAR glass is half full Wednesday will be a tremendous day in the evolution of NASCAR as a business. If you’re NASCAR glass is half empty what does it say about NASCAR if one of its most important racing teams has to go outside NASCAR to find financing?

“I don't know who looked for who. I just know that I met with John a couple times. Obviously what he's done up in New England with building the Red Sox, winning the World Series, being on Sports Channel, a bunch of other assets he brings to the table. If I was Jack, had a chance to partner with John, which he may or may not do, but looks like he will, if he does, I think that's great.

“Listen, Troy Aikman and Roger Staubach bring something different to the sport. Joe Gibbs, when he came in, brought something different. We like it when other people in sports who can bring something to the table besides just financially, but can bring some other ways to look at things, that's always been helpful if you go through the history. I think John Henry will be no different.”

But does NASCAR remain important to its core audience – racing fans? According to a poll released by ESPN, racing fans favored NASCAR over any other form of racing by 59.5 percent. The NHRA drag racing series was a distant second at 13.4 percent and motorcycle racing was third at 9.7. The rest, including Formula One, the IRL Indy Car Series and the Champ Car Series, combined for 14.2 percent.

NASCAR overwhelming continues to reach its key demographic group. Here’s a better question to ask, but one that has an easy answer. Ten years ago, certainly 15 years ago NASCAR’s popularity remained largely in the American Southeast. Today that is growing and with growth come a unique set of challenges for any business. But would anyone ten or 15 years ago have ever suggested NASCAR would be the number two sport in terms of popularity in North America? Not in a million years.

For Sports Business News this is Howard Bloom. Sources cited and used in this Insider Report: The Florida Times Union, and ASAP Sports

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