Posts Tagged ‘ Sports Business Journal ’

ACC, ESPN, and Raycom Deal is Evidence of the Importance of Relationship Building in Business

Raycom Sports has covered ACC sporting events since 1979 and both entities have helped one another prosper over time.

In the 4-10 October 2010 issue of Sports Business Journal, an article by Michael Smith and John Ourand titled, “History with ACC secures future for Raycom,” covered how the long-term relationship between the ACC and Raycom saved the latter from possibly losing its biggest media contract and main revenue stream.  Their article is the basis of today’s post and a starting point for my conclusions.

Basically, North Carolina-based Raycom simply could not match bids with networks like ESPN and Fox – who were both vying for the conference’s rights – nor survived negotiations without CEO Ken Haines or his staff’s efforts to underscore the role Raycom has played in the ACC’s history over the past thirty years.  Nevertheless, talks between ESPN and the ACC would eventually end with a $1.86 billion contract that goes into effect at the beginning of the 2011-2012 season, according to Smith and Ourand’s article.  Where does that leave Raycom?

I Remember the Time You Helped Me when I Needed it Most… Thank You (And You Have Been Here for Me all of these Years… Thanks)

When ESPN launched in 1979, it faced the challenges all start-ups face, not to mention the level of competition found in the sports industry.  Raycom sold the rights to some of its ACC basketball games to ESPN in the early 80s, giving ESPN a chance to establish itself.  Later, in 1993, Raycom sold the rights to a Duke-North Carolina basketball game that allowed ESPN2 (the network’s new channel) to enter the scene with a fair degree of credibility, according to Smith and Ourand.  As the decades came and went, ESPN grew and became the premier sports network in the US.  As for Raycom, it remained in its market and built on its relationship with the ACC.

Raycom CEO Ken Haines (right, with Charlotte Regional Visitors Authority CEO Tim Newman) says, “We really are the marketing and corporate relationship arm of the conference.” (caption taken from 4-10 October issue of Sports Business Journal)

Through the Summer of 2010, Raycom was in the fight of its life to secure a deal with the ACC that would guarantee its survival.  “Everyone involved in the negotiations cited Raycom’s 31-year history as the main reason it was able to strike a deal,” wrote Smith and Ourand of the negotiations between the ACC, ESPN, and eventually Raycom.  According to Smith and Ourand’s article, ACC Commissioner John Swofford said, “It tugged at me… We wanted to keep Raycom as a partner, but we had to do what was in the ACC’s best interests.  That we got the deal we got and kept Raycom involved was icing on the cake.”  Indeed, Haines used Raycom’s history with both the ACC and ESPN as a major talking point during negotiations.  The product: a $50 million a year sub-licensing contract between ESPN and Raycom that secured at least 50 North Carolina jobs for the next twelve years.  If you look in either Smith and Ourand’s article or Raycom’s website, you will find some of the particulars of that deal.  Essentially, Raycom keeps “ACC football and basketball, [remains as] holder of regional cable rights, administration of ACC Properties and management of all ACC digital platforms including operation of theacc.com, and the official conference web site,” according the Raycom.com.

Conclusions

While the bottom line influences all smart business deals, it is not the only path to follow during negotiations.  There is a popular misconception that business is simply cold and harsh, and defined by cliches in popular culture such as the great “Wall Street” villain Gordon Gekko when he famously states that “greed is good.”  Indeed, management and leadership must act with the company’s/stakeholders’ interests in mind, but managers who lead both prosperous and honorable careers and leaders who earn the respect of their peers do not forget those who helped them along the way.

Without Raycom’s willingness to sell rights to some of its hottest properties to a new competitor also struggling for credibility (ESPN and ESPN2) so long ago, or its loyalty to the ACC over 31 years, ESPN and the ACC would have spent more time and resources searching elsewhere for rights to quality programming and securing media service for its properties and events.  Whether in business or life itself, one always appreciates another’s efforts to make life a little bit easier.  Sure, one cannot dismiss the fact that Raycom has profited from these relationships over the past thirty years in one way or another, but so have ESPN and the ACC.  In fact, all parties must benefit if a relationship is expected to function well and last a long time (Raycom, ESPN, and the ACC prove this concept).

A long time ago, I learned an important lesson from the greatest people I have ever known (my parents, grandmother, and brother – and am reminded of it every day by theirs and my fiancee’s unyielding example) and would like to emphasize today.  Remember that as long as one dutifully conducts oneself with honor, integrity, and can walk in and out of an establishment with his or her head held high, there is no failure to fret about nor any outcome to fear.  In fact, it is one of the best methods of achieving success and fueling confidence in any endeavor.  This is an irrefutable truth that we must exemplify throughout our lives in order to be truly successful and thoroughly satisfied at the end of the day.

Cam Suarez-Bitar.

Thanks, as always, for your readership.  This article is a tribute to all of who have played a positive role in my life.  From friends and instructors who have provided both wisdom and support, to my family and future wife who have not only helped make me the man I am today, but indeed make this world a better place through their words, actions, and love.

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Technology is not the Only Way to Market Sports – Remember the Basics

If you listen to the radio, watch TV, use the internet, or actually listen to your friends who are sports fans ramble on about their favorite teams, you would be hard pressed to not hear something about teams spending millions of dollars on this or millions of dollars on that.  In fact, last week’s article touched on the new trend in sports: using technology to enhance the fan experience and increase revenue.  But as millions of dollars are invested in new technology – that will inevitably become obsolete just like the “latest model computer” you bought not too long ago – teams face the threats that an unstable economy will herald and when revenue suffers, among the first orders of the day is the directive to cut technology budgets.  Also, as we learned last week, your competition will eventually catch up to you even if you are a nautical mile or two ahead of them because one’s rivals all ride the same tide of big-ticket technology you do.  So, if there are reductions in the technology budget, how in the world do we differentiate ourselves?

Over the past 20 years or so, we have seen the cathode ray tube television (CRT TV) come and go along with Betamax, VHS, Laser Discs, and the arguably formidable computers of yesteryear. But a runner who falls down in the middle of a great track meet before thousands of onlookers and is hoisted up by his father who comes down from the stands and finally crosses the finish line and feels both the pain of defeat and the true love only a good father has for his son is irreplaceable in the definition of sports and the collective unconscious of all who witnessed or heard of the event.  Such beautiful raw emotion is innate in sport and properties must serve it on a silver platter to their fans by not losing sight of a sport’s emotional capital as they implement a complex technology strategy (among other seemingly more glamorous initiatives.)  While adding mammoth-sized television screens to a stadium in Texas and turning a corporate suite in the Cleveland Indians’ Progressive Field into a small sports bar and recreation room help enhance the fan experience at the respective venues, nothing comes close to replicating or rivaling the opportunity a fan may have to meet the athletes or even touch the field where the team’s greatest players won and lost.  That never becomes obsolete.

I watched a game from a corporate suite only a month ago and not once worried about running out food or drink or even the weather.  In spite of the top-quality hospitality and amenities (HD TVs, Wi-Fi, etc.), I was most thrilled at the prospect of watching the players warm-up down on the field and actually touching the grass.  My point is that while technology and preferences in technology change over time, the actual sport itself is the greatest attractor and always will be even as different innovations in media and broadcasting see their relative “fifteen minutes” of relevance expire as the new fad enters the fore.  So, as sports marketers embrace technology – and it is necessary to do so because of all of its benefits – they cannot forget the basics.  In the April 12-18 edition of The Sports Business Journal, Professor and Associate Director of the DeVos Sport Business Management Program at the University of Central Florida and principal of Bill Sutton and Associates, Bill Sutton, identified three of the most basic marketing techniques that the Maine Red Claws of the NBA Developmental League implemented to near-perfection in their inaugural season to make the fan experience absolutely unforgettable.

Sutton presented “Reciprocity,” “Active Participation,” and “Organizational Approach and Access” as three of the elements that comprise his definition of “emotional capital.”  In the context of emotional capital, reciprocity means that the property and its athletes truly and effectively recognize and show their appreciation for their fans.  Sutton cites the Notre Dame football team’s tradition of saluting its fans at the end of a game by walking over to the student section and raising their helmets high in the air.  The Red Claws players had their pictures taken with fans and even hugged and high-fived fans who arrived at the Maine Mall to enjoy the one-on-one experience with the players.  Teams do not set enough time aside to have their players actually interact with fans at autograph sessions and other related events.  Properties need to show their fans that they actually care about them.  When families are shelling out between $100 and $200 to enjoy a day at the ballpark just to spend some time together, share in the excitement of watching their favorite team take the field, and detach from the pressures of an unstable economy and the stress of school and work, properties need to show fans that they appreciate being the preferred choice.

Second, “active participation” refers to how fans can experience the team itself and how they can connect with the brand.  This includes access to tickets, merchandise, memorabilia, apparel, and “mascot, dancer, and player appearances for non-game related activities” among others, according to Sutton.  He also adds that the fact that the Red Claws consistently sold out their games and the team recognizes its fans as “Crustacean Nation” goes a long way to proving that the team is doing a good job of encouraging their fans to participate in the game experience itself.  I saw evidence of active participation at a Chicago Fire game I attended.  At one end of the field, the team had two “cheerleaders” who constantly banged on a set of hand drums and led the most rabid fan section’s chants throughout the entire game.  Even though they lost, nearly everyone in attendance (particularly those seated in that very loud section) were visibly excited upon exit.  The atmosphere at a Chicago Fire game is absolutely wonderful from a fan’s perspective.  That is a fine example of a team successfully implementing a plan to amplify active participation.

Finally, Sutton mentions “organizational approach and access.”  This point touches on the notion of “seeing a fan as a customer” in more detail.  According to Sutton, this approach was “pioneered by people like Walt Disney and Bill Veeck.”  As a former employee of the Walt Disney Company, I can attest to the fact that to this day the company still values this ideal and includes it in its core philosophy.  Essentially, marketers and the property’s brass must implement tactics in their overall strategy that will help their fans feel more welcome at their events.  I have always held that a salesperson’s job is not to sell the product, it is simply to have the customer feel welcome in the venue, talk easily and honestly about the goods/services offered, address any concerns the customer may have during their visit, and just enjoy being there.  This transfers to the customer who is there to interact with the product which, by the way, will practically sell itself.  The customer service team just facilitates the interaction with knowledge and grace.  Sutton affirms this by stating that “emotional capital translates [how you feel about something] into action and those actions into dollars.”

All in all, if sports marketers bear the importance of emotional capital in mind as they develop their technology strategy and general marketing strategy, they avoid losing sight of what we are in business for: delivering truly unforgettable experiences to our fans.  “Reciprocity,” “active participation,” and “organizational approach and access” are three basic tenets that – if observed – ensure that your strategy does not overlook the easier stuff while you coordinate a master plan geared at delivering a truly amazing and unforgettable experience that is sharpened by the finest state-of-the-art technology to your fans.

Cam Suarez-Bitar.

You may have been wondering “what’s the deal with the ‘work in progress’ status reports I’m reading lately prior to the article actually being published?”  Well, it’s been a tough quarter and more than once I have “fallen asleep at the controls” as I type the article out.  It takes me a few hours to deliver a well-researched article with relevant information that is free of serious spelling and grammatical errors.  I usually type them on Monday evenings, so it is not hard to start dozing off while typing at the computer after a two-and-a-half hour statistics class that lasts until 9:30 PM and a one hour commute home on the train.  Essentially, if you are taking the time to read my work, I want to make sure you get the most out of your experience.  As always, thank you for your support.  The quarter will be over in mid-June… thank goodness.

Will Technology Be the Best Way to Improve the Fan Experience?

Last night, I began typing this article and after an hour or so scrapped the entire project.  Originally, I was going to argue that sports and technology truly came together in the closing decades of the 20th century, but that would have been false.  The 1932 Olympic Games held at Lake Placid were broadcast over radio and – arguably – marks the first great kiss between sports and technology.  The romance has continued for nearly 80 years and produced many industry-changing innovations (read my article on Roone Arledge and Mark McCormack to familiarize yourself with just a few).  So, I focused instead on the details of that remarkable love story and pondered the issue of how technology will shape the fan experience in the 21st century.

I read an excellent article in Volume 12, Issue 49 of The Sports Business Journal authored by Eric Fisher titled “Looking to the Future” that helped me arrive at my conclusions.  In it, Fisher includes a transcript of the Virtual Technology Leaders Summit that he and Richard Weiss, Abraham Madkour, and Don Muret from the journal presided over.  They spoke with Michael Gliedman, CIO and Senior Vice President of the NBA; Tery Howard, CTO and Senior Vice President of the Miami Dolphins and Sun Life Stadium; Jonathan Pannaman, Senior Director of Engineering and Technology for ESPN; Bill Schlough, Senior Vice President and CIO of the San Francisco Giants; and Lorraine Spadaro, Vice President of Technology and eBusiness at Delaware North.  Along with the executives, the journal staff also invited from Cisco Systems Stuart Hamilton, Senior Director of the Sports and Entertainment Solutions Group; David Holland, Senior Vice President of the Sports and Entertainment Solutions Group; and David Hsieh, Vice President of Marketing, Emerging Technologies.  Now that’s a mouthful!

If we watch TV or listen to the radio for just a few minutes and wager that not one commercial by a communications firm would appear, then we would be out a few dollars.  Taking our loss with us as we go back home and lament the fact that we made such a terrible bet, we should not even consider betting that we will not walk past someone either talking on their cellular phones, watching movies on a handheld device, or checking their “Facebook” accounts.  That would be a terrible move.  Only 10 years ago, however, either one could have been a moderately safe bet.  Today, leagues and teams are betting on the growth of technology – such as social media – and investing heavily in developing their wireless infrastructure at their venues.  But is technology the best bet?

As you have probably noticed by now, technology changes and “evolves” quickly.  The feature a sports entity may have spent top-dollar on that gave them an advantage one year easily becomes commonplace in the industry the next time around as quickly as star pitcher of the San Francisco Giants Tim Lincecum smokes a sizzling fastball past a blinking batter and into Bengie Molina’s distressed catcher’s mitt.  It’s a gamble.  Bill Schlough of the San Francisco Giants argues that to compete in technology with other teams will give you that momentary advantage should you offer a new feature at games that fans cannot experience elsewhere, but as the tide of technological advancement rises it will bring all others in search of the next big thing in fan experience enhancement.  Indeed, when the Giants built their new stadium 10 years ago or so, they installed modem connections in all of their suites.  However, they did not place terminals in the stands.  When you have tens of thousands of fans communicating wirelessly at games sending digital photos to their friends who could not weasel their way out of work that day or posting them on Facebook as the game wears on, bandwidth becomes an issue for stadiums with integrated 3G networks and costly reinvestment in modernized infrastructure is the only solution in an industry that progressively depends more on technology as time goes by.

But the ROI is there: those photos of the game laden with images of a myriad of sponsors who purchase signage or related items and even the team’s logo helps promote those brands and add value to the investment.  That is an example of an intangible benefit when it comes to sponsorship valuation when you are negotiating from the brand side.  That added exposure is something you want… and the property knows it.  Depending on the league, though, either the team or the league would benefit most since some leagues – like the NBA – centralize their digital content.  It’s all about who owns the rights to the digital content and how it is leveraged.

Now, that is just the content that fans share.  When you consider that the stadium’s bandwidth is also being shared with photographers who could stream content directly from their cameras and send large files almost simultaneously, that could, as Lorraine Spadaro puts it, “take your wireless to its knees.”  All of the iPhones and future iPhones of the world only complicate the challenge.  But the benefits are there.  Spadaro makes a critical observation that helps answer the question on whether or not all of this is worth the trouble.  She points out that younger generations are less likely to be content with a simple outfield display and an organ since they are growing up in a world with digital cartoons and television programs that allow the viewer to have a direct effect on the outcome of televised events, such as “American Idol” and even “Dancing With the Stars.”  They (the younger generation) view programs and experience events differently, and though older generations do not as often see the value of a giant screen suspended from the roof that could project 3D images with the help of passive lenses, the former almost expect it.  In sports like baseball, a significant amount of time lapses between actions on the field and digital content provided by the property helps keep the fan engaged.  As budgets tighten and competition from other sports and entertainment outlets increases, properties must find ways to enhance the fan experience and forums like the “Virtual Technology Leaders Summit” are held daily around the world as the industry undergoes an inevitable paradigm shift that embraces the ever-increasing presence of technology in our lives.

Television networks like ESPN also help fans connect with properties in ways we could not imagine just 20 years ago.  It was beyond my imagination to even consider that I would end up watching the NFL Draft or follow a baseball game over the internet, but ESPN has made that and more a reality as a result of technology and continues to push forth.  In fact, ESPN has a staff of coders that creates applications that make a sporting event and its related data more interactive, according to Michael Gliedman.  As they develop new outlets for the increasing amounts of information they receive from properties, ESPN works closely with them to ensure that the entire industry is moving forward at a similar pace.  With the right device fans can watch an ESPN feed of the game they are attending and enjoy analysts’ feedback and watch the game in-person all at once.  This is a sign of what’s to come.  Properties that either do not have the proper infrastructure or leaders to make the best decisions regarding technology strategy and information outlets (like TV networks) that are not adapting to changes in technology will be left behind and possibly suffer in the new decade.  The pace is only increasing and the pressure on front offices mounting.

In Major League Baseball, there are less than 10 teams with executives that represent information technology at the highest decision-making levels in their respective front offices, leaving over 20 teams that have yet to fully commit to the fact that properties must interweave their technology strategy with their business strategy.  TV’s capable of projecting 3D images are coming as Samsung, Sony, and Panasonic design and manufacture the screens capable of delivering this new experience to viewers.  One intangible benefit for properties from the upcoming 3D revolution is the fact that if their events are held in facilities that accommodate the additional number of cameras needed to broadcast in 3D, they can compete on a whole new level with other options on the dial that transmit in 2D and could otherwise make a far-from-die-hard sports fan who would usually opt out of watching the game tune in and possibly make him or her the newest fan of that property or sport because the idea of watching a 3D program was too exciting to pass up.

For fans who buy tickets and sit in the stands or are served in the suites, digital content adds value to their decision to pay to watch a game at the venue itself.  Leagues and teams are challenged to somehow embrace both the advantages of implementing a technology strategy and solve the problem of obsolescence that changes in every way every year.  By creating a position at the executive level that focuses on these issues, a general manager or president could count on having an expert at the most senior level who understands the problems with technology and can focus on how to exploit the benefits.  Properties cannot fear failure.  Even though ideas like “smart seats” (stadium seats equipped with televisions) failed when they were implemented a few years ago in Boston, experts found that the market simply was not ready for them – people still felt that such devices were intrusive.  Interestingly enough, though, Tery Howard of the Miami Dolphins and Sun Life Stadium mentioned that “we did a pilot project last season where we deployed about 2,700 devices… The surveys came back overwhelmingly positive with respect to having all of this information in their [the fans’] hands and they’re not missing out on any other out-of-town game that they could be watching from home.”  In case you did not know, the devices Howard referred to are similar to handheld televisions.

Conclusion

So, just like properties have experimented with ideas that have not always worked like “smart seats” and in-game player tracking similar to that used by the NBA on a few occasions over the last 10 years, trial-and-error is a necessary part of invention and development.  The Miami Dolphins and Sun Life Stadium were not afraid to fail and – as a result – may be on the brink of both enhancing the fan experience and activating sponsorships in a whole new way.  A senior executive who specializes in technology and understands the market could help the property make similar or better decisions regarding technology and business strategy that could generate more sponsorship revenue, expand marketing strategies, and enhance the fan experience (and even bring all three closer together.)  Technology is one of the best ways to enhance the fan experience, but without the proper support, it could also be one of the most expensive methods for the front office.  To me, the only thing better would be to actually mingle with the players and coaches themselves… but if you use technology to bridge the gap or facilitate that communication, then that experience can be monetized and even be used to gather vital market data with the proper tactics in place.

Cam Suarez-Bitar.

If you enjoyed this article and appreciate in-depth analysis of the sports industry, visit http://www.sportsbusinessjournal.com for information on how to subscribe.  I do not work for them nor am I affiliated with the journal in any way, but I feel that anyone who wants to learn more about how sports function, grow, and survive would be well-advised to familiarize themselves with their content.

NASCAR 2010 Season: An Assessment of NASCAR’s Position on the Sports Brand Life Cycle

For decades, NASCAR has experienced consistent growth – at least since the 80s – and is often the subject of debates over which sports property enjoys the most fan loyalty.  No other sport in America makes an entire weekend or week-long affair of its events and attracts more people to its venues; in fact, a NASCAR venue can seat 75,000 fans (such as the Chicagoland Speedway in Joliet, IL) and Daytona International Speedway easily accommodates over 165,000.  Since NASCAR tracks have such large capacities, the property and its tracks must work that much harder to fill every seat and should there be empty sections at the start of a race (especially those that are televised), each vacant space represents one more bit of evidence of NASCAR’s somewhat troubling position in what is referred to in sports marketing as the “sports brand life cycle.”  Just as the league slowly slides from maturity into decline, league sponsors, television networks like Fox, and fans are wondering what the league is doing to turn the tide and begin a new phase of growth and prosperity.  This week’s article will focus on some of the problems that have plagued NASCAR over the past 5-10 years and a few approaches the league is taking to revive its anemic revenue figures, reassure its sponsors of the league’s viability, and make fans (NASCAR’s greatest asset) an integral part of the remedy.

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“Step Up, We’re Waiting For You”

Volume 12, Issue 40 of Sports Business Journal features an in-depth article on how Brian France is changing his management style in order to revive NASCAR.  Though the words “step up, we’re waiting for you” belong to one motorsports executive, many stakeholders share this sentiment, according to Michael Smith’s excellent article.  Sponsors and partners do not question France’s ability; rather, they question his resolve.  Brian France’s father, Bill France Jr., was a lively and loquacious manager and leader.  He attended just about every race while he ran the family business Bill France Sr. started on the sands of Daytona in the 1940s.  Brian France is seen more as a “behind-the-scenes” leader who prefers to keep a low profile and does not actively seek out the limelight.  According to Smith’s article on page 15, Brian France was taken aback when it was suggested that he is not a “take-charge leader in his six-plus years as CEO.”  With vigor, France replied, “If you’re going to compare me to somebody else, my father or whoever, I’m not going to be somebody else… I have to manage in a way that fits my style and approach.  Not everybody is going to agree with that.”  Unjustly, comparisons to his father and grandfather hurt France’s image in the eyes of team owners, sponsors, and other executives.

To stakeholders, France seemed to be losing interest in NASCAR when it appeared that he may have been looking to head an NFL team roughly five years ago, Smith writes.  He attends only about half of the season’s races and is not very visible when he does.  France contends that NASCAR is very different today from the league 15 years ago when it was only a 100-man operation.  In fact, NASCAR currently employs over 1,700 people and France’s responsibilities outnumber those his father was burdened with as CEO.  Nevertheless, one wonders if better communication regarding the evolution of NASCAR’s culture would have helped France and the stakeholders better understand each other’s situations.

Brian France has done exceptionally well building and developing relationships between NASCAR and primary sponsors and partners. It would be unfair to ignore the fact that only months before he became CEO, France played a key role in the title sponsor negotiation with Nextel (and eventually Sprint) worth $750 million over 10 years, according to Smith’s article.  Also, Michael Smith writes that in 2005, Sirius Satellite Radio agreed to a five-year, $107.5 million deal making it the “official satellite radio partner of NASCAR” beginning in 2007.  The list goes on and on, and though France is partly to blame for the slow progress the league is making in improving its numbers, one cannot dismiss other marco-environmental factors such as the weak economy and new technology.

Before the start of the 2010 season, France’s mission involved meeting with every track management team and broadcast partners to address concerns and devise solutions that would be implemented throughout the season.  Weak attendance at races is a key issue and the solution lay with the fans.  He successfully identified what ails NASCAR and formed plans to bring it back to life, but he did not do it alone.

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How the “Car of Tomorrow” Exacerbated Some of the Problems NASCAR Faces Today

Since NASCAR adopted the so-called “car of tomorrow,” fans and drivers alike have complained that races are less competitive.  Part of the reason it was developed was to address safety issues that largely stemmed from the tragic death of the late great Dale Earnhardt.  Ironically, his son and NASCAR’s most popular driver, Dale Earnhardt Jr., is one of the many drivers who decries the car of tomorrow.  Surely, while every driver including “Jr.” appreciates a safer machine, he points out that it drives very differently from the previous designs and requires the driver to nearly relearn how to race altogether.  Earnhardt and several others feel that NASCAR became less competitive since the introduction of the new machine, but don’t tell that to back-to-back-to-back-to-back and current NASCAR Sprint Cup Champion Jimmy Johnson!  There is no disputing that Johnson worked for every single title in his historic run, but Earnhardt and company may have a point.  Still, it is hard to believe that NASCAR is hurting while Johnson is setting records year after year.  It has been postulated that the “car of tomorrow” and rule changes that favor safety over physicality – such as the elimination of the bump-draft in recent years – are partly to blame for decreased interest in the sport that has enjoyed the nearly unbreakable loyalty of – arguably – the world’s greatest sports fans.

One more thing… the “car of tomorrow” has also left merchandise such as clothing and die-cast toys featuring the previous design in many a retailer’s inventory collecting dust and languishing in obsolescence.  This is another proverbial “hole in the ship’s hull.”

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Conclusions: NASCAR’s Solutions

Decreased interest and participation has led to decreased sponsorship revenue over the past 5-10 years that has been catalyzed and represented by – among other factors including a difficult economy – a thinning of the crowds that attend NASCAR events and lackluster TV ratings.  Though the property has been slow to act over the last 3-5 years, it has recently taken several steps to address such issues as “blandness” and the perceived decline in competitiveness.   Brian France made a personal appearance on the pre-race show on Fox before this year’s Daytona 500 and reassured fans that NASCAR is a “contact sport;” essentially, his presence on TV and subsequent bold assertion certainly answered the call-to-arms from NASCAR stakeholders for the CEO to be more visible and reignited a passion in the hearts of many a fan.  He also sits in on more team meetings and communicates more openly with teams, sponsors, and partners.  According to Smith on page 16, team owner and driver Michael Waltrip says that at meetings France “is the first dude to speak… and that’s good.  He’s the one we want to hear from.”

Rules changes such as the reintroduction of the bump-draft have revived the physical nature of the sport and new drivers like Juan Pablo Montoya and Danica Patrick have increased and diversified NASCAR’s fan base.  Also, NASCAR’s broadcast partners have standardized the start-times of most of their telecasts in order to conform to the pattern established by NFL coverage (Sunday at Noon EST usually signals the beginning of NFL game coverage) so that viewers easily remember that race coverage starts at the same time as NFL programming just a couple of months before.  NASCAR has improved its business-to-business efforts and added more sponsored “fan zones” at tracks like Daytona to generate more revenue and enhance the fan experience at events.  Finally, some of NASCAR’s efforts to revitalize itself come from interviews with actual fans – focus groups consisting of NASCAR fans that represent different demographics and psychographics yielded perspectives and ideas that would help the league out of its slump.

NASCAR’s situation is definitely not bleak.  The league needs a new plan, sure, but it is far from beaten.  Every property experiences rises and falls in its life cycle, but some like the USFL have died off.  I have the utmost confidence that NASCAR will be just fine, though.  It is in capable hands.

So, let’s watch closely as NASCAR deals with these and all of its challenges throughout the course of the season. When you watch a race, look for empty sections in the stands and see if you can identify fluctuations in attendance.  Hopefully, tracks will sell more tickets this year than last.  Also, keep an eye out for on-screen ads.  NASCAR has stepped up efforts to sell these ads in order to increase revenue.  So far, the season does not look too bad… in 2010, the Daytona 500, for instance, posted its highest TV ratings in years.

Cam Suarez-Bitar.

Thank you for your continued readership.  I hope you enjoyed this week’s article and if you have any questions or comments, please feel free to share them.

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