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NASCAR EQUALS BIG MONEY RESULTS FOR SPONSORS
Published June 20, 1995
The economic success of NASCAR is getting attention from the sports and business press. The auto racing circuit is featured on the cover of the current issue of FORBES and was highlighted last night on "SportsCenter." In FORBES, Suzanne Oliver reports that NASCAR, called "America's fastest growing professional sport," takes in an estimated $2B a year for track owners and race teams. Oliver writes that NASCAR is "a very fat business to be owned, in effect by a single family" -- the France family, which founded the circuit in '47 and still owns and manages the association. In addition, the family owns a majority of four racetracks that had total revenues of $70M last year. Oliver reports that NASCAR takes 10% of each of their tracks' TV revenue, 2%-5% of licensed merchandise -- $200M last year. According to Ardy Arani, Dir of Championship Group/Atlanta, a sports marketing group, "NASCAR sponsorships are a good deal for their sponsors because the fans feel a closeness to the drivers they don't feel toward big-money basketball or baseball stars." Arani: "When you see Joe Montana holding a candy bar, you know he has been paid to do a commercial. When you see Bill Elliott, you know McDonald's has paid for him to race. So you better go to McDonald's or Elliott might not race." In addition to the league's popularity among sponsors, since 1990, attendance at NASCAR's Winston Cup series has grown 47%. That compares with a 10% percent increase for the NBA in that period, a .5% increase for the NFL and a 9% decrease for MLB (FORBES, 7/3 issue). SECRET OF SUCCESS? NASCAR President Bill France "is determined not to kill his golden-egg-laying goose by overworking it," writes Oliver. Bill France will add only one Winston Cup race in '96 or '97, at Roger Penske's new 85,000-seat speedway outside of L.A. (FORBES, 7/3 issue). COMPARED WITH THE BASKETBALL GOD: Among racing's personalities, Oliver writes that Dale "Earnhardt is the Michael Jordan of car racing." Much like Jordan, his popularity translates into dollar signs. FORBES estimates that Earnhardt sold close to $50M in licensed souvenirs last year and reaped at least $5M of that total. Oliver reports that Earnhardt recently purchased the major distributor of his souvenirs -- Sports Image, Inc. (FORBES, 7/3 issue). NASCAR, NASCAR, EVERYWHERE: ESPN's Linda Cohn reported on the popularity of NASCAR and the value sponsors are reaping from their association. Cohn: "Once scoffed at by big companies as a Southern obsession, racing is getting big notice by sponsors these days as fan interest spreads across the country." Cohn noted that half of NASCAR's fans are women, half are between the ages of 25-34 and three-quarters are fully employed. Cohn: "Those demographics translate into very attractive features to perspective sponsors." Finally, Cohn reported that 71% will buy sponsors' products, much higher than the 38% that NBA sponsors can expect ("SportsCenter," 6/19). In Detroit, David Markiewicz examined how "sponsors lap up the chance to be a part of racing mania" with a focus on the NASCAR team co-sponsored by Tigers/Red Wings/Little Caesars Owner Mike Ilitch. Tim Burke, Dir of Sports Marketing for Little Caesars: "Those cars our like 200 mile-per-hour billboards for us. Mr. Ilitch was impressed with what NASCAR sponsorship offers, especially to a retail business" (DETROIT NEWS, 6/18).