SBJ/20101129/This Week's Issue
NASCAR’s slide on TV continues
Published November 29, 2010
Four years after signing a record $4.48 billion media deal with Fox, ESPN and Turner, NASCAR has lost nearly a quarter of its TV viewership base, a four-year trend of massive viewer defections that has been punctuated by the erosion of the young male demographic.
This year’s TV numbers were down for 26 out of 34 races (two Monday races weren’t included), extending the sport’s viewership free fall and separating it further from other sports leagues, which have seen viewership remain relatively resilient in recent years.
Unlike past years, however, NASCAR executives and their media partners are not considering major changes designed to boost TV ratings. Rather, they are preaching patience.
The sport’s leaders say that the changes they’ve already made to competition — from introducing new cars to allowing for more open racing — have resulted in much more exciting races. They point to the fact that viewers who tuned into ESPN over the latter part of the season watched races longer than a year ago and believe TV ratings will catch up with the exciting racing that delivered this season’s hotly contested Chase for the Sprint Cup.
“With the racing where it is now, I have no doubt it’s going to take hold, and the excitement we’ve built coming out of this season will build into next season,” said Steve Phelps, NASCAR’s chief marketing officer.
But as a mark of how far NASCAR’s TV ratings have fallen, even as the Chase came down to the final race this season, ratings for that race (Homestead) were down 8 percent compared with last year (3.3 versus a 3.6). Viewership was flat.
“The younger demos are not watching, and that’s the No. 1 trouble spot,” said Mike Boykin, GMR executive vice president of sports marketing. “Are races too long? Is there enough emphasis on winning? Is timing of races working against the NFL juggernaut? Do they need a different format to attract a younger audience? Is there enough editorial and promotional support? Do they have enough personalities? They’re going to have to make some bold moves, and they’ll have to make several to get back to where they were.”
In 2006, after NASCAR finalized its current media deal, it was averaging 7.855 million viewers per race on Fox, FX, TNT and NBC. By this season, the fourth of its eight-year deal with Fox, ESPN and Turner, NASCAR races averaged 5.992 million viewers over 34 races across all the networks.
That means that NASCAR has lost nearly 2 million viewers in the past four years, or 23.7 percent of its viewing audience.
NASCAR’s steep decline flies in the face of a real renaissance of sports ratings numbers. For example, the NFL’s two national packages have seen significant increases since 2006. “Sunday Night Football” viewership is up nearly 4 million viewers from 2006, while “Monday Night Football” is up 2.4 million. The NBA’s regular-season Thursday night package on TNT is up 240,000 viewers from the 2005-06 season, and MLB’s Sunday night package has lost just 173,000 viewers since 2006.
For NASCAR, this season showed drops on all of its networks — Fox down 6 percent, TNT down 9 percent and ESPN/ABC down 14 percent. The sport averaged a 3.6 U.S. rating over 34 races, making it still the No. 2 sport in all key demographic groups, according to The Nielsen Co..
This year’s declines seeped into press reports throughout the year and popped up everywhere from national publications like Sports Illustrated to regional papers like The Charlotte Observer. Media questions about viewership declines were pervasive enough that NASCAR CEO Brian France addressed ratings declines at the outset of his final press conference of the season.
As recently as last month, NASCAR and ESPN executives were searching for answers as to why viewership was down. Over the years declines have been blamed on a range of issues, from heavy driver criticism of NASCAR’s “Car of Tomorrow,” which debuted in 2007, to the challenges of competing against the 2010 Vancouver Olympics and the NFL season.
But the biggest driver of the drop may be the erosion of the young male demographic. This year, Fox saw a 29 percent decline in 18- to 34-year-old male viewers, while ESPN/ABC saw an 18 percent decline.
As it does every season, NASCAR will look to make some minor adjustments designed to boost ratings. Over the last few years it has tried everything from new start times and less on-track regulation to network cross-promotion and encouraging drivers to show more personality.
Currently, everyone associated with the sport is happy with the quality of the racing and does not believe significant changes are necessary to stop the ratings slide. That means, for example, standard 1 p.m. start times may extend into a second year, once again putting them up against the NFL, which has seen its ratings increase this year in the same television window.
“The last few years we’ve done a really good job of listening to the fans and what they’re interested in seeing from a racing standpoint,” Phelps said. “The ratings will take care of themselves in the near term.”
The problem is that the ratings are down so much from 2006, after the current deal was negotiated, that sources say all of the networks are losing money on the deal.
“The cost of [advertising] entry has been recalibrated,” said Sam Sussman, senior vice president and director at Starcom USA, which buys media for clients such as Best Buy and Allstate. “Demand has been trending down at the pace of the ratings decline, if not more. Things picked up a bit this year, and hopefully that will help Fox next year. NASCAR still delivers strong ratings.”
The ratings declines are affecting media buys by corporate partners. Nationwide executives said the insurer plans to pull its ad buy on Fox’s national broadcast of the 2011 Sprint Cup Series because its buy on Fox this year wasn’t as effective as hoped. It will buy time for Nationwide’s NASCAR-themed ads on ESPN during races and other programming as well as non-racing programming on networks like USA and TNT.
Other sponsors are monitoring ratings closely as they make similar advertising decisions.
“For all of NASCAR it’s a concern, and it’s a concern for all of its sponsors,” said Suzanne Beaudoin, vice president of sponsorship and sports marketing at Mars Chocolate, which sponsors Joe Gibbs Racing’s No. 18 car driven by Kyle Busch.
Despite that, Fox Sports President Eric Shanks said he’s seeing signs that the NASCAR market will open up.
“From a business standpoint, we’re cautiously optimistic,” he said. “ is a turnaround year. Generally, we’re seeing more demand in the marketplace than we have the last two years. We’re cautiously optimistic that the increased demand in the overall sports market will hit NASCAR, too.”
Shanks praised the on-track racing, saying the racing was tighter and the lead changed hands more frequently.
“From a viewership perspective, it was mediocre,” Shanks said. “The successes NASCAR has had on the track have to be amplified by the media partners so fans can better appreciate it.”
Julie Sobieski, ESPN vice president of programming and acquisitions, said that the network sees this year’s dramatic championship as a catalyst for ratings growth in 2011. The network was encouraged that heavy promotion and a much-hyped finale meant that — despite an 8 percent decrease in ratings — total viewership was flat and young male viewership increased for the Ford 400 at Homestead-Miami Speedway.
“Fans clearly found the race, and the younger demos were there in significant numbers,” Sobieski said. “If we could have that type of championship every year, that would be excellent.”
As it looks to increase ratings in 2011, one change ESPN won’t consider is moving races back from ESPN, which is in 99 million homes, to ABC, which is in 115 million homes. Sobieski said the network believes ESPN remains the right home for NASCAR.
That means marketing and promotional adjustments will be the primary tool of NASCAR and its broadcast partners in 2011 as they attempt to reverse the declines. NASCAR plans to increase its marketing spend in 2011 and develop targeted promotions designed to encourage tune-in by young males and other target demographics.
“We’re going to use every resource available to us,” Phelps said. “We have to expose the sport to as many people as we can wherever they are, whether that is on a computer screen or mobile device or television.”
NASCAR and its network partners hope that those efforts help reverse the dismal four-year viewership trend.
“The goal is to continually move in a positive direction, whether that means stabilizing [ratings] in 2011 or continually growing in [future] years,” Sobieski said. “We’d never be happy with flat as a long-term strategy.”
SportsBusiness Daily Assistant Managing Editor Austin Karp contributed to this story.