Victory gain

By the time the checkered flag drops on the 50th running of the Daytona 500 on Sunday, the series of events known as Speedweeks could generate close to $200 million in revenue and just under $100 million in profits.

The business of selling tickets to NASCAR events has been uneven at best the last two years as track promoters have blamed gas prices, tougher economic conditions and entertainment alternatives for declining or stagnant attendance. That hasn’t been a problem for the golden anniversary of the Daytona 500, which has benefited from a yearlong national promotion and enjoyed robust ticket sales for what has been called the most anticipated race in NASCAR history.

A year ago, tickets to the storied event, billed as the sport’s Super Bowl, didn’t sell out until the night before the race. Attendance for Daytona’s Speedweeks events, a three-week stretch of 10 events that include Craftsman Truck Series, Nationwide Series, Grand Am and ARCA races, as well as qualifying events, lagged behind and admissions revenue unexpectedly dipped from 2006 to 2007.

Almost as soon as the 2007 race ended, Daytona International Speedway officials launched their “50th running” promotion for the 2008 event. Partnering with Kroger and its affiliated stores, Daytona struck deals with more than 40 brands to run special “50th running” packaging nationwide.

In addition to the near-blanket coverage the promotion provided in some 2,500 Kroger stores, the speedway profited from selling the promotional rights — some brands paid a fee in the low six figures to participate, industry insiders said. Brands that were already Daytona partners were not charged.

“It’s a revenue lift incrementally, but it’s really moreabout Speedweeks and lifting up our brand,” said Robin Braig, the speedway’s president. “It helps ticket sales, it helps merchandising and it helps us distance ourselves even further from other motorsports events. If you’re keeping a list of sporting events you must attend, we’re on that list.”

By September of last year, track officials were already seeing the benefits. Seats in the coveted front stretch sold out last fall and all of the grandstand seats were gone by early last month, even though the track waited until Jan. 31 to announce the sellout.

Race promoters kept the news to themselves for fear the phones would go quiet. They still had plenty of tickets to sell to the other Speedweeks events, where advanced ticket sales are critical because of the way weather can affect walk-up sales.

Speedway officials had assured themselves of
another full house for the Daytona 500 by early
January, then shifted their focus to the smaller
events leading into the main race.

In fact, the speedway even created new terminology for the Nationwide, Craftsman Truck and other races that precede the 500. They’ve long been called “support events,” but this year the track is referring to them as “leading events” in an effort to give them more credibility as races that can stand on their own.

The Nationwide race has been the best-attended Speedweeks event other than the 500, drawing about 90,000 fans on the Saturday before the big race, while the Gatorade Duel qualifying races on the preceding Thursday draw about 75,000. Daytona’s capacity is 168,000, although track officials believe there’s close to 250,000 fans at the speedway for the 500, counting those in the infield.

“The upside in revenue is with your leading events. The sooner you sell out the 500, the sooner you transfer your marketing efforts to the leading events,” said John Guthrie, Daytona’s vice president of sales and marketing. “We’re sitting in great position for Speedweeks to be extremely successful.”

How times have changed
Daytona 500	1959	2007
Winner	Lee Petty	Kevin Harvick
Car sponsor	None	Shell/Pennzoil
Winner’s share	$19,050	$1.51 million
Total purse	$67,760	$18.39 million
Avg. speed	135.521 mph	149.335 mph
Attendance	41,921	185,000
Drivers in field	59	43
Source: SportsBusiness Journal research

Daytona and its parent company, International Speedway Corp., don’t disclose revenue and expense figures for specific events, but past first-quarter earnings reports offer guidance on the revenue Speedweeks has generated in previous years, analysts and industry insiders said. The numbers for ISC’s first quarter, which runs from December to February, are subject to significant fluctuations because of weather.

Just about anything is possible for a sponsor at the racetrack, but it all comes with a price.

A four-passenger golf cart rents for $480 a week. A display area, the kind used by ISC sponsors such as AAA and others to show their products and educate consumers, goes for as much as $100,000. One of Daytona’s 112 suites can be rented for $200,000 for the season.

Want liquor served in your suite? A liter of Crown Royal will cost you $100, but that’s just the start. There’s an $8 setup fee for each occupant, and the bartender — mandatory for suites serving liquor — will cost $150, plus tip.

Those are just some of the revenue streams pouring into Daytona’s coffers during Speedweeks.

Several brands signed on as partners this
year, helping build early momentum for
the event.

Revenue is basically broken down into three broad categories for ISC events:

Admissions revenue for Speedweeks has been around $40 million to $45 million annually the last few years and it reflects ticket income from the grandstands. Those seats sell for $99 to $330 per day for the 500 and less for the other events. Four-day packages can cost as much as $660. If you don’t mind standing, a ticket to the infield for the 500 costs $95, but it doesn’t come with a seat.

Revenue from Daytona’s other fan areas goes into a separate category that ISC terms “Motorsports related” and it includes everything from fan-amenity areas — FanZone, President’s Row, Daytona 500 Club — to suites, sponsorships, hospitality and broadcast rights. Speedweeks generates about $100 million for this category from Speedweeks.

A ticket-carrying fan can enter the FanZone for another $90. A member of the Daytona 500 Club spends $3,100 for a yearlong membership. A yearly President’s Row membership runs $5,250, which includes unlimited food, beverages and free parking. These memberships also include the July races and other select events.

Turnkey Sports Poll
The following are results of the Turnkey Sports Poll taken in January. The survey covered more than 800 senior-level sports industry executives spanning professional and college sports.
Which event below is the most prestigious?
Masters	41.80%
Super Bowl	34.84%
World Series	6.15%
Final Four	4.92%
Kentucky Derby	4.51%
Stanley Cup Finals	2.46%
Indianapolis 500	1.64%
Daytona 500	0.82%
NBA Finals	0.82%
U.S. Open tennis	0.41%
Other	0.41%
No response/Not sure	1.23%
Which event below is the biggest?
Super Bowl	70.08%
Daytona 500	6.97%
Indianapolis 500	6.15%
World Series	4.51%
Final Four	3.69%
Other	2.87%
U.S. Open tennis	2.46%
Kentucky Derby	0.82%
Masters	0.41%
NBA Finals	0.41%
Stanley Cup Finals	0.41%
No response/Not sure	1.23%
Source: Turnkey Sports & Entertainment in conjunction with SportsBusiness Journal. Turnkey Intelligence specializes in research, measurement and lead generation for agencies, brands and properties. Visit www.turnkeyse.com.

Daytona’s broadcast revenue for Speedweeks will be $48 million this season, up about $1 million from 2007. The speedway will put about $13 million of this revenue toward the purse.

Food, beverage and merchandise sales go into another category, which brings in about $17 million annually. That figure for Speedweeks dropped about $2 million from 2006 because overall attendance dropped slightly, meaning there weren’t as many fans on-site to eat, drink and buy Dale Jr. shirts.

Interestingly enough, the speedway makes no revenue from parking, track officials said. Workers will park as many as 23,000 cars around the speedway for the 500 without charging anything.

“It was always very important to [Bill France Jr.] that parking was free,” Guthrie said.

Promoting the 50th

It was nearly three years ago that Braig called his staff together to talk about plans for the 50th running of the Daytona 500. The senior members of his staff at the time, Gillian Zucker, who now is president at California Speedway, and Kenny Kane, who worked with Braig when they were at Anheuser-Busch in the 1990s, knew the kind of lead time it would take to “do the 50th right.”

Other members of the staff were wondering “What’s the rush?”

“The more junior members of the staff did have that look like, ‘Hey, we’ve got Bike Week, we’ve got the summer race.’ They were living in the now,” Braig said with a laugh.

“Now I know some people may think we’re a bunch of backwoods track promoters, but we were smart enough to get this process started two years out. We knew that sometimes you’ve got to be a year or more out front on packaging and we wanted to make sure our partners had plenty of time to do this right.”

Right away, Braig knew he was going to need help. The speedway partnered with public relations firm Taylor to reach nontraditional media, like Brandweek, and also sought out Jim Doyle’s Retail Sports Marketing, a Charlotte agency that specializes in retail promotions.

Critical to the plan, they decided, was partnering with a retailer first, then seeking the brands to go with it. Cincinnati-based Kroger, which operates under nearly two dozen banners, from Smith’s Food to Fred Meyer department stores, offered the national coverage the speedway sought.

First, Braig, Guthrie and Doyle had to get in the door at Kroger. They were granted 15 minutes with Evan Anthony, Kroger’s corporate vice president of marketing and advertising, around the middle of 2006 to make their pitch.

Driver Kevin Harvick poses with the Daytona
500 pace car during a publicity trip to
New York.

“He saw the vision right away,” Guthrie said. “The message to his folks was ‘Let’s blow it out.’ That made fostering this relationship through the rest of the organization so much easier. Downhill works so much better. If you don’t start at the top, it’s much more difficult.

“What we learned was the importance of partnering with the retailer first and how the brands get a lot more out of it that way, as opposed to brands going in and trying to get the retailer to activate. Getting Kroger committed first was what moved the displays and got us the space.”

Far more important than generating revenue from the sale of promotional rights was the presence the event gained across the country, track officials said. With ticket buyers coming from all 50 states and 22 countries, the speedway is convinced that the promotion spiked awareness.

“It leads to ticket sales, merchandise sales,” Doyle said. “It’s awareness in states that might not typically be thinking about the Daytona 500. It will be interesting to see what it does to the TV ratings.”

Keeping track of the money

More than 50 years ago, when NASCAR’s early events were being run on the hard-packed sand of Ormond Beach near Daytona, Fla., Bill France Sr. grew frustrated by his inability to control the gate. Fans sneaked through the woods for a peek at the cars speeding down the beach, hoping to avoid paying the $1 price of admission to stand trackside, $2 if they wanted a seat in the makeshift grandstands.

To scare off the nonpaying gawkers, France posted signs in the woods that read “Beware of rattlesnakes.”

Controlling the gate became much less of an issue once France built Daytona International Speedway, a 2.5-mile oval on old swamp land that became the site for the first Daytona 500 in 1959.

Through the years, the majority of revenue came from admissions — ticket sales. As recently as 2000, admissions accounted for the highest percentage of total revenue for ISC events, but that began to change in 2001 when for the first time motorsports-related revenue from sponsorships, hospitality and suites outgained admissions revenue from the grandstands.

The ratio has continued to swell in the favor of motorsports-related revenue. In 2001, it accounted for 45 percent of the total revenue compared with 41 percent for admissions. In 2007, motorsports-related revenue was up to 59 percent versus 30 percent for admissions.

The big leap in revenue at Daytona came from 2004 to 2006 when motorsports-related revenue went from about $60 million to more than $100 million, an increase of around 70 percent. Much of it came from Daytona’s new infield creation, the Sprint FanZone, which debuted in 2005 with a stage for musical acts, a bistro and a fan deck with some of the best views of the garage in all of NASCAR.

It also generated new sponsorships from Budweiser (bistro), Sprint (FanZone), Goodyear (Legends area), Camping World (RV supplies) and Centurion (the pier on Lake Lloyd). In all, Daytona added 10 new sponsors in 2005, including Elizabeth Arden, AAA, Checkers/Rally’s, ConAgra Foods and XM Satellite Radio.

It was a watershed year for the speedway, with revenue increasing 31 percent over 2004 and growing again the following year. Despite a drop in 2007, due mostly to a 12 percent reduction in TV rights fees in the first year of NASCAR’s new eight-year contract, those numbers should spike again with the 50th running.

“When you look at this [50th running] platform, it really is an investment in the future,” Guthrie said. “We have to keep evolving this event and reaching out to new fans. We’re not just trying to elevate awareness for this year, it’s for years to come.”