NASCAR looking marginalize IndyCar TV again
Having followed this sport for decades one pattern is apparent, no matter what TV broadcaster CART, Champ Car or IndyCar did a deal with, it wasn't long before NASCAR races were on that same channel and their large media buys essentially smothered IndyCar and forced them into a worse deal somewhere else. History is about to repeat itself once again.
Officials from the France-family controlled track-operating company International Speedway Corp. hope that the recent rebranding of Versus to the NBC Sports Network will drive up television rights fees by adding a potential additional bidder in the negotiating room.
The current eight-year, $4.48 billion NASCAR television contract with FOX, TNT and ESPN/ABC runs through 2014, and negotiations have begun for 2015 and beyond. NASCAR chairman Brian France said in January that he hoped that all three of the current partners extend their deals.
But with recent changes at NBC Sports Group, which is run by former Turner Sports president Mark Lazarus, there is a belief that it could be a bidder.
Versus owner Comcast took over NBC Universal in 2011 and this year rebranded the network to the NBC Sports Network. NBC had televised NASCAR races from 2001-2006 as part of the first NASCAR-bargained television rights deals.
“The rebranded NBC Sports Network, while just the fraction of viewers of ESPN, will grow in prominence with this year’s summer Olympics,” ISC president John Saunders said during the company’s conference call Thursday with financial analysts. “It is conceivable that with increased visibility that they may secure more sports media rights. And prior to 2007, NBC was broadcasting NASCAR events.
“More bidders usually mean higher fees for sports rights. … We think there is some good competition in the marketplace.”
The television contracts are vital to the tracks’ success. The tracks, which previously had negotiated their own television rights deals prior to 2001, get 65 percent of the TV money, while competitors get 25 percent through the purse and NASCAR takes a 10 percent cut.
ISC makes more money from the television contract than it does in ticket sales. Through May, ISC has cleared $104.2 million in all broadcast rights, compared to $69.87 million in ticket revenues, which includes nine Cup weekends.
FOX, which has the first 13 races of the season, saw a 4 percent drop in its ratings. Sports advertising is up 33 percent over the past three years, Saunders said.
“We know that broadcasters want live programming on their networks because it creates destination viewing—viewers watch these events in real time and do not DVR them (as much),” Saunders said.
The television deal was just one of many topics on the conference call as ISC released its results for December-May. That includes all Speedweeks events at Daytona (Daytona 500, Rolex 24 At Daytona, Supercross, etc.), Phoenix, Martinsville, California, Kansas, Talladega, Richmond and Darlington.
Among the key elements:
• ISC ticket revenue for the first six months was $69.87 million, compared to $66.04 million for the first six months of 2011. But this year, it had nine Cup weekends in first six months, while last year it had eight (Kansas was in June 2011 but in April 2012). ISC chief financial officer Dan Houser said that ticket revenue was down 1-3 percent for comparable events (which includes the Rolex 24 at Daytona and motorcycle events at Daytona). Houser said that Talladega is one of the more struggling markets. The average ticket price this year for events is 1.2 percent lower from last year. Retention rates have had a “slight uptick” but the company reported that in general, advance ticket sales are down 8 percent in number of tickets sold and 9 percent in ticket revenue.
“Attendance-related revenues continue to be challenged by the slower-than-expected economic recovery,” Saunders said. “NASCAR’s core fan demographic, which is the working class, still has a lack of consumer confidence, seeing a lack of job growth and less income growth.”
• ISC reported overall net income of $30.88 million for December-May, compared to $33.31 million last year. When taking into account just core operations, the company made $41.12 million for the first six months, compared to $35.91 million for the same period last year. Deferred revenue, as adjusted by the schedule changes, is down by $11 million. In part from Sporting News