NASCAR is close to finalizing a new TV deal with Fox for the first half of the Sprint Cup season, but a deal for the second half will not be wrapped up until next summer at the earliest, according to several sources.
Fox started negotiations for its package earlier this spring and has agreed on the broad terms of a new deal to continue in the sport, sources said. An announcement is likely to come in the weeks after the broadcaster’s media rights deal with Major League Baseball is announced officially.
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While Fox is finalizing its deal with NASCAR, ESPN and Turner have chosen to wait.
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But the remaining inventory of NASCAR’s media package will be in question for the next year. That’s because ESPN and Turner Sports executives told NASCAR that they are not willing to start negotiations on their media contracts early. NASCAR approached both networks earlier this summer about new deals, but both chose to wait until their exclusive negotiating windows kick in next summer. Typically, negotiating windows last around a month.
Despite declining ratings, particularly in the younger demographics, NASCAR stands to bring in more money from its next media deals. The addition of NBC Sports as a serious new bidder could create a bidding battle that could help push rights fees higher than many expect.
ESPN and Turner Sports are in the sixth year of eight-year agreements valued at $2.74 billion overall. Their deals run through the 2014 season.
ESPN, which carries the NASCAR Chase for the Sprint Cup Championship, is interested in renewing its deal. Turner, which carries six midseason races, is interested in adding more races to its schedule.
Sources familiar with NASCAR’s plans said the organization hasn’t decided whether it will sell its entire package of rights to one partner, two partners or three, as it has in its current deal. That decision won’t be finalized until after it’s held initial conversations with ESPN and Turner.
Fox, which also has an eight-year agreement that runs through 2014, wanted to begin negotiations early to account for its plans to rebrand one of its channels into an all-sports channel that it’s calling Fox Sports 1. Fox executives have told league executives that it wants to turn Speed into that channel. To do that, Fox is looking to lock up NASCAR rights so that it could keep its races as part of the cable channel’s long-term programming plans.
Fox’s executives negotiated heavily with NASCAR this spring and summer. Those talks slowed in recent weeks as the broadcaster worked to finalize a new rights agreement with MLB. A formal announcement of Fox’s MLB deal is expected to come this week, after which the Fox-NASCAR talks are expected to resume and be completed. Sources said Fox would renew its current agreement, which includes the Daytona 500 and 12 early-season Sprint Cup races. It’s unclear if Fox also will renew its deal for NASCAR’s Camping World Truck Series, which currently airs on Speed, the cable channel Fox plans to rebrand.
NASCAR’s decision to go forward with its negotiations with Fox alone carries some risk. If the sport negotiates a deal with Fox that is a modest increase on the network’s current $220 million a year deal, that could suppress the market, causing bidders for the second or third packages to use that as a benchmark in their own negotiations.
By the same token, if Fox comes out and makes an offer that doubles its current agreement, NASCAR could set a floor for bidders looking to acquire rights for the other half of the season.
But the pricing of a rights package for the second half of the season will have less to do with what Fox pays than the interest of NBC, CBS or some other network.
If ESPN and Turner can’t reach agreements with NASCAR during their exclusive negotiating windows, NBC, CBS or another network could create a bidding war for broadcast rights. That has the potential to be the most favorable outcome for NASCAR.
