NASCAR President Helton Discusses Fox, NBC Deals; Team Execs Talk TV Money Distribution
NASCAR President Mike Helton yesterday said that the sport’s new, $8.2B rights agreements with Fox and NBC offer it a chance to benefit from increased marketing and exposure. Fox this month will convert Speed into Fox Sports 1, and in the process will eliminate several NASCAR-specific shows. However, Helton, who was speaking at a Charlotte Business Journal luncheon called "Motorsports 2.0," said NASCAR stands to gain more than it loses as a result of the change. He said, "That’s a good opportunity for us to ride the coattails, if you will, of a very major worldwide entertainment group that’s going to invest a lot of money starting a new brand so to speak. We think that’s going to be an upside for the entire industry." He made a similar comment about the sport’s new deal with NBC. Helton said, "It’s a function of an opportunity. With NBC or Fox or in the past with Turner or ESPN, when they invest in content, they want to make it work. That level of energy they put behind launching it and making it work ... because they have their network at stake, they’re going to present our content at their level."
YOUR COMPANY HERE: On the sponsorship front, Helton said that NASCAR would be more involved in the future in approving race title sponsors and team sponsors. He didn’t mention Texas Motor Speedway’s title sponsorship from the NRA earlier this season, but he said that the rise of social media meant that controversial sponsorships attracted a different level of attention than they used to get. ESPN NASCAR analyst Dale Jarrett, who conducted the interview with Helton, asked what the sport planned to do about its aging ownership base. Jarrett noted that Joe Gibbs, Rick Hendrick, Richard Childress and Roger Penske were all entering the end of their careers. Helton said he was not concerned about that, noting that most of the teams had succession plans in place that would keep the teams alive after they are gone. He added, "Our hope and desire and wish, because it is critical to have good successful race teams, is that those organizations continue to have success and along the way others enter the sport." Helton spoke about several other topics, including the Gen-6 car launched this year, which he described as a success; the sanctioning body’s effort to attract younger and more diverse fans; and NASCAR's effort to improve its rules-making process and introduce more technology to the sport.
SPREADING THE WEALTH: On a panel immediately after Helton, team owner Michael Waltrip and Joe Gibbs Racing President J.D. Gibbs said they would like to see NASCAR increase the amount of TV money teams receive. NASCAR splits up TV money based on a formula developed in '99 that gives tracks 65%, teams 25% and NASCAR 10%. Waltrip said, "It costs more to race the car than ever. The percentage of increase is greater than ever. It’s probably due to engineering. ... The teams are spending more money. The sponsors are spending less money. We need to figure out a way to make the ownership side of this deal work as well as the other two stakeholders, which is NASCAR and the tracks. I think this TV package can help in that game." Waltrip later said that the percentage the purse contributed to a team’s overall revenue (20-30%), compared to the amount sponsorship contributes (60-80%), shows the current business models teams operate under is "way out of whack." He added, "There was a great period of time where your expenses were less and the sport was going and people wanted to be on the cars. That's all changed now. Very few of the cars are sponsored by one company for the whole season. The challenges are tough. And you look 10 years down the road, is it going to get tougher or better, and how could that percentage be different to help the teams?" Gibbs said the current model works, adding that NASCAR’s move to create an "owners program" to award teams more money around '05 helped. But he added, "Would we love to see more money in the purse? We would. We’ve talked before, could NASCAR do franchising, what’s the percentage, what’s the buy in? It’s difficult. The model overall works. ... But on the team side we say, more our way."