Fox has started serious negotiations with NASCAR about an early extension of its TV rights package, jump-starting a process that wasn’t expected to begin until early next year, according to several sources.
Financial terms of the talks were not available, but sources said Fox was offering enough of an increase to its current eight-year, $1.76 billion deal to make NASCAR executives consider negotiating an early deal rather than waiting a year and putting the rights on the open market.
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Under its current deal, Fox pays NASCAR $220 million per year on average.
Photo by: ICON SMI
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An early deal would be a departure from the current trend of leagues and teams taking their rights to the open market in the hopes of establishing bidding wars. For NASCAR, though, an early deal with Fox would guarantee broadcast distribution of its early-season races with a TV partner with whom it has a history and is comfortable. It also, potentially, would allow NASCAR to put ESPN and Turner’s packages — which represent about two-thirds of the season’s races — up for auction.
Neither ESPN nor Turner has started negotiations for their respective NASCAR packages, sources said. Both networks expect to wait until next year for talks to get serious. They both have exclusive negotiating windows that end in the spring, sources said.
Waiting in the wings is NBC Universal, a former NASCAR rights holder that has made no secret of its desire to get back into the mix. With no Sunday afternoon NFL schedule, NBC could put the end-of-season races on its broadcast channel. It also is looking for live sports programming to put on its NBC Sports Network cable channel. The presence of NBC as an added bidder is certain to push NASCAR’s rights fees higher, which is one reason why Fox is looking to do a deal early.
Fox executives, including co-presidents Randy Freer and Eric Shanks, have had several lengthy meetings with NASCAR executives, including vice president of broadcasting and production Steve Herbst, over the past few weeks for renewal discussions.
Fox declined to comment. NASCAR emailed a statement saying simply that it talks with its network partner all the time.
Several sources privy to the discussions said they were surprised at how quickly the talks seemed to progress and that the sides have explored several options.
Much of the talks have centered on Speed, the Fox-owned network that carries a lot of NASCAR-related programming. Sources said Fox is considering turning Speed into a multisport channel in the next two years and has been looking into other sports rights, like MLB, that it could place on such a channel. Speed has carried NASCAR programming such as practice and qualifying races, plus the Camping World Truck Series.
In the past, NASCAR and Fox have discussed partnering on a motorsports channel. That is another option that has been explored as the two sides negotiate.
Digital rights provide another interesting dynamic in the talks. Like all programming networks these days, Fox is looking to pick up digital and mobile rights for its races. Earlier this year, NASCAR bought back its digital rights from Turner with plans to manage its own digital business by next year. It’s unclear how that new strategy would affect its next round of media-rights deals.
Sources said NASCAR is looking at a significant rights fee increase from the $220 million per year it receives from Fox on average, even though its ratings have dropped considerably since the last time it negotiated a media-rights deal. NASCAR’s Sprint Cup Series on Fox this year averaged a 4.8 Nielsen rating and 7.9 million viewers, down 14 percent and 15 percent, respectively, from the 5.6 Nielsen rating and 9.3 million viewers the series delivered in 2007, the first year of the current broadcast agreement.
When ratings were declining year-after-year between 2007 and 2010, Fox and other TV partners raised concerns about waning interest in the sport, but ratings rebounded last year and have been down only slightly this year. Fox’s commitment to the sport despite the decline underscores just how sizable NASCAR’s audience remains and how valuable the programming can be. The sport consistently delivers 4.0 ratings in the first half of its season, which Fox has the rights to broadcast.
