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SBJ/20100628/This Week's News
ISC chief: Focus on core fan must continue
Published June 28, 2010
Note: This article contains additional content to the print edition.
From Lesa France Kennedy's eighth-floor office overlooking Daytona International Speedway, she can see nearly every corner of the iconic track.
“Got to keep your eyes on the prize,” she says with a laugh.
Kennedy's office in the new International Speedway Corp. tower, directly across the street from the speedway, is unpretentious and absent the memorabilia that clutter the offices of most motorsports executives. Two framed pictures of her son, Ben, who will be a freshman this fall at the University of Florida, sit on the table behind her desk. The book she¹s reading is about how to let go when your child goes to college.
A year ago, Kennedy was the newly named CEO at ISC, one of the two France family businesses along with NASCAR that drive stock car racing. She couldn’t have taken over at a more difficult economic time. Ticket sales are down, revenue streams are flowing like mud and a very pesky pothole ruined the sport's most-prized event, the Daytona 500 in February. Still, Kennedy keeps an optimistic outlook that forecasts better days ahead for her family¹s sport and the businesses that depend on it.
In the weeks leading up to Saturday night’s Coke Zero 400 at Daytona, she spoke with SportsBusiness Journal staff writer Michael Smith.
Two days after the Coke Zero 400, the speedway will be repaved (at a cost of about $20 million) for the first time since 1978. After the Daytona 500 pothole, it was time?
Kennedy: It’s a huge deal and it¹s probably one of the largest capital projects we’ve had in the history of the track. We¹re starting Monday after the Coke Zero, bright and early, and we plan to be finished by the first of January, so we¹ll have some time to do some testing and get it polished up for the Daytona races.
The pothole incident took on a life of its own. In retrospect, is there anything that could have prevented that?
Kennedy: I don’t think there was any one specific thing that could have been done. We tore it apart in every single way you could. It was really just a collection of circumstances with the cold and the rain leading up to the race. We inspect the track every day (during Speedweeks) and did not see that coming. I don¹t really have a hindsight on that one. It really took us by surprise; it was very disappointing.
Did the pothole lead to any other changes or review at other properties?
Kennedy: We did an across-the-board look at all of our operations, but we’re pretty comfortable that the other tracks are in good shape.
Big events are your business. Given the economy, what’s your sense of the value of big events?
Kennedy: Big events definitely have the value they¹ve always had. The difference we’re seeing is that people are more cautious about when they make that commitment to go to the event. We’ve seen a big ramp-up in ticket sales as we get closer to our events and that¹s when people start to feel more comfortable that they’re in a secure financial situation. The buying cycle has changed and we’re adjusting our schedules and advertising and promotions more to the new buying cycle we¹re in. For the Coke Zero, our phone calls are increasing right before the event, similar to our other events.
What’s your general sense of where things stand with NASCAR?
Kennedy: There are some areas we could improve, obviously, but if you look at the core product and the changes that have been made, the fan response to that has been really positive. We really need to go back and continue to focus on the core fan, but in addition look at the younger fans. What¹s their thought process, what is the consumer of tomorrow going to look like?
We’ve been giving that a lot of thought. [Pointing at the photo of her son] I’ve got one right over there. My independent marketing studies are conducted in the basement of my house, talking to the kids.
What do they say?
Kennedy: Technology is so important to them. I’m also seeing the green initiatives are very important to them. They’re starting them out at a younger age talking about it in schools and they’re interested in the environment more so than any of the past generations. That’s a regular topic of conversation. I think they’re going to be looking toward that and how it impacts our sport. Then, just the way they communicate, the Facebook, the tweeting. So how do you make your product appealing to them and also get the message out to them in the way they communicate? I was told recently by that generation that e-mail was antiquated. And I’m like, “Well, I’m still sending them out and I’m still getting them back.”
The fact of the matter, though, is that NASCAR’s core fan is older and that the younger demos have been dropping off. How do you appeal to the core fan who is older as well as the younger fan to stop the erosion there?
Kennedy: You can do both, and it goes to the overall guest experience. If you provide a good guest experience and a good product on the track, that¹s going to appeal to everyone overall. It goes to the way you communicate with them. Technology can enter into the sport to appeal more to the younger fans, but that doesn¹t mean you’re leaving your core fan. They can still enjoy the sport the way they have in the past. You just have to give people more options. NASCAR.com is a great example. You can still watch the race on TV, but the younger fan might want to go to NASCAR.com and see that different perspective. It’s not shutting anyone out, it’s just providing more avenues for people to enjoy the sport, and we¹ve got to continue to look at that.
With the ratings trending down and the next round of TV talks two years away, what’s the level of concern there, especially given that TV revenue accounts for a third of ISC’s total revenue?
Kennedy: We’re paying close attention to it all the time, but we also look at TV ratings as cyclical and we¹ve seen some rebounding recently. We understand that we’ve got a ways to go.
Why is that something that NASCAR has had such a hard time getting a handle on?
Kennedy: The viewing cycle has changed, but one thing that¹s helped are the consistent start times. That was a pretty dramatic change. That’s how we had it in the past and over time a lot of people had input on that and things changed. It was a bold change to go back to the consistent start times and we’ll see more over time how that’ll play out. People want to know when the events are. My father always preached to us about the core product on the track. That¹s something that has been addressed and the action is better this year, and that will help, too.
What do you do on race day?
Kennedy: Depends on the event. We might sometimes be exposing someone to a race for the first time, which is my favorite thing to do. Usually when you take someone to an event for the first time, they’re hooked and they’re really amazed by everything going on.
Is there someone in sports business who has become a really good friend who you sometimes bounce ideas off of?
Kennedy: One person I have the utmost admiration for is Bea Perez at Coca-Cola. She would be one of my first calls because she has great insight.
The car owners have a whole different view. I wouldn’t be hesitant to call a car owner or a driver. Drivers are great at giving you their opinion.
Coke Zero’s title sponsorship of the race this week is just part of a sweeping 10-year, eight-figure deal Coca-Cola has with ISC. What has that meant for the company?
Kennedy: It¹s an unbelievable deal for us. It’s unparalleled for us. It’s not just a sponsorship and then they forget about us. They get involved with our fans, they activate, they get involved with promotions. They’re the best at that.
Where is ISC most poised for growth?
Kennedy: As far as the racing business we¹re focused on our core facilities.
As far as expanding into new markets, probably on the side burner right now.
But we do have a lot of land around all of our tracks. In Kansas, we¹ve built the casino and that’s a year-round use of the land we have at the track. We’ve done that a little in the past, but not to that extent. With that project, we’ll get a different view of things.
Where do things stand with the mixed-use retail and entertainment project in Daytona?
Kennedy: That’s been put on a slower brew. We’re waiting for the economy to recover. I think it will be a terrific project eventually, once we¹re able to tie in an overall entertainment complex with what we have going on at the speedway, not just for our race fans, but also year-round. It¹ll also elevate the visibility of this facility and give it a whole new look. You¹ll know things are happening here year-round. But we’ve got to have the right tenants and the right lease agreements in place.