Can you plug holes in the damn with cash? Or will larger cracks reveal themselves?
The struggle of NASCAR to increase viewership, race attendance, improve sponsor retention and grow overall revenue has been going on for the better part of the last five years. Though some gains have been seen in some year over year viewership most would agree that the swoon continues.
It all boils down to money for NASCAR, its tracks, its teams and the corporate entities that make the sport possible – how can they generate more money than it costs to operate when the standard benchmarks for the sport continue to decline?
This July NASCAR agreed to a new media rights agreement with NBC (and the NBC Sports Network) that will air 13 Sprint Cup races while ESPN loses its rights to broadcast races. The move from ESPN to NBC was based on more guaranteed annual dollars from NBC than ESPN.
Is this move really financially beneficial to the sport and its interested parties in the long run? Could moving away from the flagship in sports broadcasting really be good for any sport?
The power of ESPN goes beyond the race coverage itself, but the continuous highlights on SportsCenter and the discussions on various programs like Around the Horn and Pardon the Interruption. ESPN is the leader in a 24 hour a day sports news cycle – TV, radio, print, digital – you name it. There has been a growth of more sports centric outlets, including NBC Sports Network, but do all of them combined have the reach of ESPN. Many have argued that if you are not on ESPN you can’t be considered a ‘big time sport’.
Ask the NHL who played hard ball with ESPN after a strike lost season and its visibility with non core fans dwindled to almost anonymity.
Perplexing financial moves by NASCAR is not a new thing; many have thought the pricing model for race attendance has alienated many of its core fans in exchange for a higher end demographic over the past decade or so.
It’s understandable that NASCAR needs dollars today in hopes of growing for tomorrow, but how does this affect the value of the NASCAR brand and its product? It won’t take long to find out, corporate sponsors will not sit idly by hope for the best – should declines continue so will the corporate dollars.