SBJ/April 30 - May 6, 2007/This Weeks News

Speed looks to grow with All-Star Challenge

The first on-air promotion for Speed’s broadcast of next month’s Nextel All-Star Challenge ran on Jan. 3, more than four months before the event itself.

About 2.9M households watched Jimmie Johnson’s
victory last year. Speed is shooting for 2.8M.

Not a day goes by that Speed doesn’t shout to its viewers that it’s the new home for the May 19 all-star event. Print ads scream, “It’s huge.” A Web-site promotion seeks a CFO — chief flag operator — for the race. Sprint Nextel’s advertising includes a “tune-in” element promoting Speed as the broadcaster.

There’s no shortage of reminders, including the countdown clock in Speed’s Charlotte office, that the network is about to show its first live in-season Nextel Cup event. (Speed televised the Gatorade Duels at Daytona before the season officially started.)

This is the promotional push NASCAR sought in what amounted to a sacrifice of eyeballs for enthusiasm for its all-star weekend. The All-Star Challenge’s former home, FX, reaches 91 million homes, compared with Speed’s 70 million. Tony Vinciquerra, president and CEO of Fox Networks Group, said the All-Star Challenge will likely destroy Speed’s ratings record and give the network added credibility with NASCAR fans.

“The fans know that this network is committed to them, as opposed to a network that tries to cover a hundred different sports,” Vinciquerra said in a thinly veiled shot at ESPN.

The change of networks within the News Corp. family came about when NASCAR negotiated its new $4.4 billion TV contract, which went into effect this year and gives Speed the all-star race for the next eight years.

Moving the race to Fox was never a consideration, said Dick Glover, NASCAR’s vice president of TV and new media. “It would have been one of several Nextel Cup races on Fox or it could be the premier race on Speed,” he said. “Speed is the right home for it. There will be very few people who want to watch the race who won’t have access to Speed.”

Speed officials say they’ve targeted a 4.0 cable rating, well above the old record of 2.1 for a Craftsman Truck Series race in 2005. Speed’s 2.1 in 2005 hit 1.33 million households, whereas its 1.9 rating for the Gatorade Duels earlier this year registered a record 1.35 million households because of Speed’s increased distribution.

If Speed hits its target of a 4.0, it will equate to about 2.8 million households, still slightly less than the 2.945 million households that FX reached last year with a 3.3 rating.

Speed has already endeared itself to core fans
with its programming around races.

But that’s an exchange NASCAR and Fox were willing to make to get a Nextel Cup event on Speed, which could help spike the network’s already-steady growth.

“It’s a very high-profile event, it’s hugely important to NASCAR fans and hopefully this is an event that will translate into Speed getting into more homes as time goes on,” said Hunter Nickell, Speed’s president.

Even though the All-Star Challenge will be Speed’s first, the network has created multiple studio and analysis shows featuring mostly Nextel Cup content, including pre- and post-race shows from the venue. That mix of live coverage, talk shows, event analysis and prime-time reality programming has helped Speed improve its overall ratings for four straight years.

Speed just topped 70 million households, up 4.7 million from a year ago, and slightly less than Golf Channel at nearly 75 million. ESPN leads sports networks with 93 million homes, with ESPN2 close behind at 92 million.

“This race is a big deal for Speed, a graduation day,” said sports media analyst Neal Pilson, the former president of CBS Sports who acts as a consultant for NASCAR. “This is all part of an informed business strategy to grow Speed’s subscriber count from 70 million to the high 80s or low 90s. You’re going to grow Speed faster with a Nextel Cup event. It’s the same thing the NFL and NBA have done with their own networks.”

Speed is charging about $65,000 for a 30-second spot during the race, media buyers say, significantly more than the $10,000 or so it charges for a unit on its other programming. Fox typically gets $150,000 or so for its Nextel Cup events. Terms for an title rights package, which typically includes in-race features, graphics and other enhancements, weren’t available, but some would-be advertisers complained that it’s pricier than previous years, even though Speed reaches fewer homes.

Still, Speed’s rates have allowed some smaller advertisers, such as Famous Dave’s barbecue sauce and GoRVing.com, to buy time. Famous Dave’s will be prominent during one of the many shoulder programs on Speed during all-star week, “Larry Mac’s All-Star BBQ,” which will originate from the home of Speed analyst Larry McReynolds. True Value, another company seeking the NASCAR audience that typically finds Fox too expensive, found Speed to be a more affordable option.

A bigger name, General Motors, is considering all-star week as a launching point for a series of “My First” ads, featuring Chevy drivers talking about their first win.

“Speed is doing it different in that they’re making this a celebration of NASCAR,” said Todd Siegel, senior vice president of sales for Fox Cable Sports. “We’ll have north of 60 hours of programming all geared toward all-star.”

Speed’s license fee for cable operators is believed to be 19 cents this year, according to SNL Kagan Research, but a network’s growth does not always result in higher license fees, said sports TV consultant Mike Trager.

“When Versus got the NHL, it increased more than 10 million homes that first year and there was no escalation in the contract,” Trager said. “You typically make a deal for four to five years, and it’s rare to have escalators in there based on penetration.”

Trager said Speed likely benefited from ESPN’s exclusion from the previous TV contract, which opened the door for Speed to draw viewers with its full-court press of coverage before and after Nextel Cup events. ESPN is back as a NASCAR broadcast partner this year.

“When the Golf Channel got PGA Tour events, it’s sub base was going to rise,” Trager said. “There’s a real correlation. NASCAR aficionados are loyal and they’re going to follow the NASCAR-related programming. Had ESPN been in the mix the last several years, Speed’s growth probably would have been slower. But it wasn’t and Speed lucked out in what turned out to be a real growth phase for the network.”

Speed and Fox sales staffs are working the event together and both networks will be represented in the production, look and feel of the broadcast. Fox’s talent — Mike Joy, Darrell Waltrip and McReynolds — will call the race, but Speed will maintain its on-screen identity with graphics.

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