“SPUN OUT OF CONTROL”

Only a decade or so ago, the people who run Nascar were held up as sports-marketing geniuses.  At sports-business conferences and seminars there were almost always presentations on how to copy the wildly successful business model.  Horse racing insiders were told that Nascar business practices were to be emulated in order to reverse negative industry trends in racetrack attendance, pari-mutuel handle, and television viewership.

How quickly things have changed!

The Wall Street Journal ran a front-page article (February 22, 2017) titled “Long a Cultural Icon, Nascar Hits the Skids.”  Besides infighting in the France family, who controls the sport, Nascar has a host of problems.  One expert observer said that “Nascar’s problems seem to have spun out of control.”

  • Nascar tracks have removed one-fourth of their seats to make them look full of fans on race-day.
  • Since 2008, admission and event-related revenues have plummeted and television-rights revenue has deteriorated since 2014.
  • Television viewership is down 45%, which is twice as large as the decline in ratings, from their apex, for the National Basketball Association.
  • Nascar is having trouble lining up race title sponsors and the going rates for sponsorship have fallen sharply.
  • The sport has a dearth of star drivers to attract fans.

A former race-team owner and onetime head of McDonald’s U. S. operations said that Nascar’s issues flow from “economics and demographics.”  Nascar has an aging fan base of white, working class individuals who were hardest hit by the recession of 2008-2009 and who have been most hurt by an increasingly skills-based economy.

Almost the same rationale could be cited for why pari-mutuel handle has declined.  When secular trends are creating headwinds against a business or a sport, even the most creative solutions won’t be enough to reverse the situation.  That does not mean that improvements can’t or shouldn’t be made, only that a return to the halcyon days of yesteryear is unlikely.

Some people think that the National Football League is immune to such negative trends, but don’t be too sure.  Television viewership for the NFL is off 8% from its peak and the inherent concussion dilemma looms large.

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