Monday, August 5, 2013

What NASCAR Should Do With All That Money

Ford has been using NASCAR to promote EcoBoost engines 
The final pieces of the NASCAR television contract puzzle have been put in place with Fox adding three Sprint Cup races and the first half of the Nationwide series beginning in 2015.  Fox also extended its recently signed new contract by two years, meaning the Fox and NBC deals will run concurrent through the 2024 season. 

The Fox deal is now worth an estimated $3.8 billion compared to the $4.4 billion NBC is spending, the peacock network ponying up a little extra for the right to televise the Chase races.  That works out to about $820 million dollars a year, $25 million a race weekend, or about double what NASCAR is currently collecting.  It is the culmination of a series of brilliant moves by Brian France to secure the financial future of NASCAR and its key partners (the tracks and team owners) for the next 10 years.  And secure it in a very, very, comfortable way.

The financial bonanza presents an interesting dilemma for NASCAR and friends.  What to do with all that money. 

There are a couple of choices.  They can simply take the money and put it in their pockets.  Hey, they earned, right?

But here’s a novel idea.  Invest it in the sport.  Take some of that money and make NASCAR relevant again – before it becomes completely irrelevant.  Before it becomes nothing more than a made-for-TV sideshow.  I’m not talking cutting a race or two here; or adding a road course or dirt track race there.  Or putting in wider seats and video boards, although cheaper tickets would be a nice touch. 

I’m talking about making a real investment in the future of the sport and the auto industry.

During the next 12 years, including the 10 years covered by the new NASCAR television contracts, the auto industry will go through enormous changes.  Corporate Average Fuel Economy (CAFE) standards are set to nearly double by 2025, to 54.5 miles per gallon, from the current 29.7 mpg standard.  Greenhouse gasses will need to be cut in half.  That’s easily the greatest increase in standards since they were first established in the early 1970s.  It’s estimated the regulations will increase the cost of the average vehicle by several thousand dollars.  Supporters of the legislation say the added cost will be more than made up for in gas savings over the life of the vehicle.

Currently only the Toyota Prius and similar hybrids, meet the 2025 standards.  The V6-powered Ford Fusion, Toyota Camry and Chevrolet Impala or Malibu will have to nearly double current fuel economy levels.  V8 engines such as the one in mythical Chevy SS?  Forgetaboutit.  You may be able to find a V8 engine in something like a Corvette in 2025, but you’re gonna pay a huge premium. 

To meet the new standards, the industry will undertake a decade of development and innovation unmatched in its history.  One Toyota executive recently went a step further, saying we’ll see more changes in the next 10 years than we’ve seen in the previous 100.  That’s a lot of innovation.

We’re going to see electric cars, hybrids, turbocharging, lightweight materials, improved aerodynamics, direct injection and continuously variable automatic transmissions.  More vehicles will be powered by alternate fuels, including diesel, natural gas and hydrogen.

NASCAR has an opportunity to do something it has never really done in the past, play a role in the development of these technologies.  NASCAR Cup cars have been using the same basic 358 cubic inch V8 engine regulations since the ‘70s.  It was only last year that fuel injection finally replaced carburetors, decades after it had become commonplace on production cars.  NASCAR’s main nod to the ecological movement has been the adaptation of ethanol fuel, which has since lost favor with environmentalists and the government.   

IndyCar began using V6 turbo engines last year.  Formula One currently uses normally aspirated V8s, but will move to a V6 turbo formula next year, the first time in 25 years that we’ll see turbos in F1.  Ford has already started using NASCAR as a marketing platform for its line of EcoBoost engines, which a V6 turbo, but no V8s.

So a move to V6 engines seems like a no-brainer – and an absolute must if NASCAR hopes to remain relevant.  NASCAR will point out it tried optional V6 engines 20 years ago in the Nationwide series (then Busch) but abandoned the experiment in 1995.   No options this time around.  A V6 will be a must.  And make it with direction injection.

But why stop there?  F1 allows a Kinetic Energy Recovery System (KERS), a type of hybrid system that recovers kinetic energy generated under braking, stores it at a capped level and turns it into additional power, a sort of press to pass button used in IndyCar.  Hybrid technology is expected to be the No.1 source for improving CAFE, so why not make NASCAR a showcase for hybrid development? 

Aerodynamics will play a very visible role in hitting the fuel economy marks.  NASCAR says it is already working on the Gen 7 car.  Get rid of the splitter.  Get rid of the spoiler.  Give the manufacturers back their identity.

A shift to CVT automatic transmissions would probably be even more controversial than a move to V6 engines.  But why not?  NASCAR currently used the same 4-speed manual transmission it has been using for, well, forever.  Can you even get a 4-speed manual on a production car?  Outside of Pocono, the two road courses and starts, NASCAR drivers don’t do much shifting.  Racing would be a tremendous test for the CVT and could play a big role in its development.   

Parity has always been a big issue for NASCAR and one of the arguments against innovation and technological advancement.  Somewhere along the line NASCAR decided innovation was a bad idea and that status quo was the target.  Keep everyone fat and happy.

Only how much parity do we currently have?  If the Chase were to start this coming weekend, we’d have four Hendrick Motorsports cars and two other Chevys making up half the field.  Chevy has won 10 races this year.  Ford has two.  Call that parity?

Cost, however, has always been the main issue when it comes to innovation.  The argument against new engines is that such an undertaking would be too expensive.  Well here’s the perfect opportunity to make the move without digging too deeply into anyone’s savings.

The auto companies already spend anywhere from $100 to $125 million each in NASCAR.  Most of that money comes from their advertising budgets.  They could shift some of that money from marketing to development, but additional funds would need to come from somewhere.  That’s where the television contracts come in.  Take a portion of that money and put it towards offsetting the costs associated with bringing NASCAR into the 21st Century.  

Heck, take a lot of it.  The future of the sport is at stake.  Here’s an opportunity to secure not only the financial future of the sport, but the sport itself.

Otherwise, 10 years from now, there won’t be a bidding war to televise a parade of dinosaurs. 


  1. CAFE is forced by the government, not the free market. It is unconstitutional. Since na$crap is all about being pc these days, I suppose you're gonna see 43 priuses sauntering around shu-caahhh-go. The rest of us will watch something more interesting --curling, perhaps.

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