Cha-Ching: NASCAR Cashes In

Don't look for NASCAR on SportsCenter come 2015

Last week was a big one for the future of NASCAR.  Or should it be NASCAR stock futures?

Brian France signed a $4.4 billion, 10-year deal with NBC Sports to televise 20 races in the second half of the Sprint Cup season, beginning in 2015.  That’s a huge increase from the $2.8 billion NASCAR received from ESPN and TNT under the current contract, especially for a sport that has seen both attendance and television viewership decline in recent years.   It also comes on the heels of an eight-year, $2.4 billion deal signed just a few months ago with Fox, which will continue to broadcast the first half of the season.

Media rights account for about half of NASCAR’s revenues.   According to one report, NASCAR takes 10 percent off the top of the television fees.  Another 65 percent goes to the track owners, primarily International Speedway Corporation (controlled by the France family) and Speedway Motorsports (controlled by Bruton Smith and family).  The teams get the other 25 percent.  France also said you can expect purses to go up.  Cha-Ching, Cha-Ching, Cha-Ching.

The announcement paid immediate dividends as the stock prices of both International Speedway Corporation (ISC) and Speedway Motorsports (TRK) surged to new 52 week highs before falling back slightly on Friday as profit takers cashed in.  Cha-Ching.

The move is clearly good for NASCAR and its partners.  But is it good for the long-term health of the sport?  That’s not so clear. Despite the big bucks, it’s a bit of a gamble.

In making the deal with NBC, NASCAR turned its back – once again – on ESPN.  The timing is especially interesting, the announcement coming just as ESPN was beginning its programming for the year.

Instead of ESPN, 13 of the 20 NBC races will be shown on the NBC Sports Network and Fox has already announced an untold number of its races (although not the Daytona 500) will be shown on the new Fox Sports1 channel, which begins operation next month.  As a result, beginning in 2015, more than half of all NASCAR Sprint Cup races will be shown on fledgling cable networks, one of which doesn’t even exist at the moment.

Quick, what channel is NBCSN on your television?  That’s what I thought.  I have DirecTV and it used to be in the 600s, near Speed.  But it’s since moved to 220, in order to be near, wait for it, the ESPN series of channels.  I usually hit guide, punch in ESPN, and then scroll until I find NBCSN.  Formula One moved to NBCSN this year from Speed and viewership has been cut in about half.

ESPN, “The Worldwide Leader in Sports” as it likes to call itself, is clearly the 800 pound gorilla when it comes to sports programming.  As an indication of its domination, ESPN is able to charge cable and satellite operators about $5 for every subscriber.  NBCSN, on the other hand, currently gets about 30 cents a head.   But ESPN viewership also is down nearly 30 percent, mostly the result of a decrease in NBA playoff viewership.

Right now NBCSN is literally more talk than action.  The station has missed out on major league baseball, football and top college conferences.  There is limited live coverage.  NHL hockey, IndyCar, Formula One and European soccer.  And overflow (from NBC) Olympic coverage through at least 2020.  That’s pretty much it at the moment. The rest is news and commentary.  In contrast, Fox Sports1 will be heavy on pro and college football, major league baseball and can pick and choose from a wide range of coverage provided by regional Fox stations.   

Still, there is reason to be hopeful about the move to NBC.  If NBCSN can hold on to IndyCar and Formula One through 2015, it will become the first channel to have all three major racing series at the same time.   If it does, it should mean an increased emphasis in motorsports coverage.  Also means increased coverage of NASCAR on NBC.  Heck, Dale Earnhardt, Jr., already has been on the Today Show plugging the move and Nightly News anchor Brian Williams is an acknowledged NASCAR fan.  Of course, don’t be surprised if you see less NASCAR on SportsCenter.

And what impact will all this have on the fans?  Many have expressed hopes online that there will be fewer commercials.  Don’t get your hopes up.  You don’t spend $4.2 billion to run fewer commercials.  Others are hoping for new broadcasters.  NBC said it had made no decisions in that area and probably won’t for some time.

Finally, there are still three races unaccounted for.  NASCAR says a package including three Cup races and nearly a half season of Nationwide races is still available.  NBC said it bought everything that was available to it.  Why would NASCAR hold back three Cup races?  Could it mean the schedule will be trimmed by three?  Some have been campaigning for a shorter season.  More likely, he races will be offered to Fox as a goodwill gesture. 

Stay tuned.  If you can find the channel.