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DATE News (chronologically)
01/06/10
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Declining NASCAR rents out space to bring in some bucks
[Editor's Note: NASCAR's declining popularity is now forcing them to rent out space in one of their facilities to try to bring in some cash...]

The NASCAR Media Group is developing previously untapped sources of revenue from its new $43 million facility within the downtown Charlotte NASCAR Plaza.

NASCAR Media Group, NASCAR's production arm that creates all forms of content and manages broadcast agreements, has four floors of studio and production space and an almost limitless supply of digital archive capabilities in its part of the new building, which also houses the NASCAR Hall of Fame.

Only a fraction of the studio and production space is being used as NASCAR Media Group settles in, so it's beginning to market those ancillary services to potential clients, in and out of motorsports.

The equipment and studios were integrated into NASCAR Media Group's new offices to give NASCAR the ability to start a network if it chooses, but that's a decision the sanctioning body won't have to make until 2014, when its current broadcast agreements are up. Until then, it's up to the media group to find new ways to monetize those three studios and 28 post-production rooms, as well as other assets it built into the facility, such as the archive and satellite services.

NASCAR Media Group's core business remains creating NASCAR-themed content in the form of feature films, weekly programming for Speed, its largest client, and programming for other networks such as Fox, Outdoor Channel, CMT and National Geographic. The media group also manages the TV compound at each of NASCAR's 36 Sprint Cup races.

It's uncertain how much of an impact these emerging services can make on NASCAR Media Group's annual budget, but it's believed to have the potential to make up 5 percent of its annual revenue early on and perhaps as much as 10 percent down the road. The media group does not reveal its annual numbers.

"We've got this tremendous capacity, and the next question is what is the smart extension of the business to complement our core competencies," said Jay Abraham, COO of NASCAR Media Group. "What we're trying to do is take our assets and put them to work for other sports properties and maybe even non-sports properties."

The Atlantic Coast Conference, University of South Carolina and Charlotte-based Raycom Sports are among the first clients to use the media group's digital archive system. The group also is selling its satellite services with the help of Crawford Communications, an Atlanta-based broadcast company.

The media group is still working out the charges for the studio and post-production room, but they likely will be flat fees for each day with incremental charges for additional equipment and manpower needs. The archive system fees are based on the hours of footage being stored.

A client such as South Carolina has boxes upon boxes of old game tape, coaches shows and behind-the-scenes footage that needs a home, so it struck an agreement with NASCAR Media Group to archive that old footage. The group does not seek any rights to the content it preserves.

"We've got everything from old three-quarter-inch film, beta, VHS, all laying around in boxes," said Marcy Girton, deputy athletic director at South Carolina. "What NASCAR Media Group can do is convert it and digitize it from any form. Just about everybody is concerned about their archives and the viability of it to generate revenue. It's more imperative than ever to take care of this. It's your history."

These new revenue streams have been built into NASCAR Media Group's 2010 budget, and although it's only a small piece of its total revenue, it's new money the group wouldn't have access to in its previous location just south of downtown Charlotte, where it was formerly known as NASCAR Images.

It also comes at higher margins because the services aren't typically labor-intensive and the equipment is already in place.

"It gives us a chance to be more diverse in our revenues," said John Martin, NASCAR Media Group's managing director of business development and strategic planning. Martin is leading the marketing efforts along with Greg Jacobs, director of business development, and Marc Jenkins, managing director of business operations.

"The core business is still NASCAR and NASCAR content," Martin said, "but we are expanding into other areas and we're going to see incremental revenue from that."

The media group, which took occupancy of the building about five months ago, is just now settling into its new digs and fully marketing its assets. The new weekly Showtime program, "Inside NASCAR," will originate from the group's headquarters, and a daily NASCAR-based radio show is expected to begin broadcasting from the hub this summer.

The group also is working on a new movie, "Petty Blue," a biography of NASCAR driving great Richard Petty. The media group's previous credits include "Dale: The True Story" and "The Ride of Their Lives," NASCAR-themed movies for Viacom that have been distributed on TV and via DVD.

The media group's revenue is distributed the same way as other NASCAR revenue, with 65 percent going to the tracks, 25 percent to the teams and 10 percent to NASCAR. Sporting News

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