SBJ/March 18-24, 2013/Opinion

NRA sponsorship a mistake for NASCAR

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It seems so simple: Do not engage in strategies that upset a substantial part of a coveted fan base that you have long been struggling to tap into as you try to grow beyond your traditional roots. So how is it that the powers that be at NASCAR could violate this tenet of Sports Marketing 101?

This young season has seen NASCAR take one big step forward — the performance of Danica Patrick in the Daytona 500 qualifying and race — and one big step back — the decision to allow Texas Motor Speedway to have the NRA title sponsor next month’s Sprint Cup race despite possessing the ability to disapprove of the title sponsorship deal.

Full disclosure: I am a Democrat, have never owned a gun or hunted, support sensible gun control legislation, live 75 miles from Newtown, Conn., and have a child in the second grade.

But as TMS president (and seemingly my ideological opposite) Eddie Gossage told ESPN.com, “This is a sports marketing proposition. It’s not a political platform, and none of us intend for it to be. It’s a sponsor.” I agree. But what it really is, is a severely misguided business decision that sacrifices long-term development of the fan base for short-term revenue.

As a business school professor who frequently consults with some of the biggest sports properties in the world — typically on projects that involve creating strategies to drive long-term revenue growth — I fully grasp the short-term revenue pressures that all sports properties feel.

The incremental revenue that TMS will generate from the NRA deal is hardly inconsequential, especially since its parent company SMI reported a 3 percent decrease in revenue last year and needed to replace Samsung as the title sponsor of the April race.

The asset needs to be monetized, of course. To quote the gangster Don Barzini in “The Godfather,” “After all, we are not Communists.” But we also cannot afford to make the kind of mistake that NASCAR has just made in allowing this type of title sponsorship deal between the track and the sponsor.

You see, I am also a casual NASCAR fan who watched nearly the entirety of the aforementioned Daytona 500 with my wife and children, who were particularly interested in watching “the girl driver.” As a family, we seem to fit the description of the fan that NASCAR has unsuccessfully sought out for the past decade. With a compelling reason to tune in, we are viable candidates to increase our affinity for the product — and for NASCAR to begin to monetize us via increased viewership and race attendance. Based on this year’s Daytona 500 viewership increase, presumably there are many others like us.

With half of NASCAR’s television deals expiring in the coming months and flagging attendance in recent years, this is an important period for NASCAR. So why would you risk alienating those you have been trying so hard to reach at the exact time that you finally have a chance to reach them? And why put your television partner in a no-win position as well?

By engaging a sponsor that reinforces the stereotype that many potential fans have of NASCAR at such a sensitive time due to the Newtown shootings, the sport has polarized the community at the least opportune moment. The revenue pressure cannot be denied but this seems like a situation where some long-term strategic thinking would have been appropriate.

Scott Rosner (srosner@wharton.upenn.edu) is a practice assistant professor in the legal studies and business ethics department at the Wharton School and the acting faculty director of the Wharton Sports Business Initiative.

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