DAYTONA BEACH — You’ve seen the numbers. TV ratings continue sliding southward.
You’ve seen the empty seats. Ticket sales aren’t what they once were.
What you can’t see is the future. But if you could, Steve Phelps insists, you’d see better times coming for NASCAR.
“I fundamentally and truly believe that NASCAR’s best days are in front of it,” Phelps, five months into his new role as NASCAR president, says from an office overlooking Speedway Boulevard and Daytona International Speedway.
The top-floor office at NASCAR’s headquarters — inside the International Motorsports Center — has belonged to Phelps for just a couple of weeks. It’s dotted with a few pieces of racing memorabilia, including a Richard Petty cowboy hat, a new NASCAR-emblazoned golf bag and some family pictures. But it’s also blanketed with challenges.
NASCAR might still be among the more attractive sports-entertainment properties, might still enjoy corporate partnerships and the almighty TV network contracts, but its forceful momentum and accompanying glory days seem to be growing distant in the rearview mirror.
Phelps, a longtime marketing man, understands how quickly perception can become reality.
“We have to change this perception that’s out there — ‘Hey, NASCAR’s best days are behind it’,” he says.
During a recent conversation, Phelps comes close to asking forgiveness for his “past sins.”
NASCAR, held together for decades by the loyalty of its fans to drivers, automobiles, products, and tracks, “probably lost our way,” he says.
They were chasing the new and the shiny, shuttering Deep South tracks like Rockingham and North Wilkesboro for hipper venues such as Las Vegas and Southern California, secure with their base of support and taking aim at the casual fans on a climb past every other sports-entertainment industry this side of the NFL.
Many factors played a role leading to the current slump, but any philosophical audit would likely point to a false sense of security regarding their longtime fan base.
“I think we were trying to search for that next-generation fan … and I don’t think we listened to what the hardcore fan wanted,” Phelps says.
And now?
“Those days have ended.”
Phelps, who helped deliver that past marketing strategy, is now charged with replacing it. He became NASCAR president last fall, not long after Jim France took over as NASCAR’s Chairman and CEO. Jim France replaced nephew Brian France, following Brian’s August arrest in Long Island, N.Y. on charges of DWI and possession of a controlled substance.
While Jim France will serve as the final word on all major decisions, Phelps will be the point man. Judging by the current climate and what some consider a monumental challenge, the new president needs a plan and the industry-wide desire to make it work.
He doesn’t appear to be blinking at the ongoing and perhaps oncoming headwinds.
The numbers
The late Bill France Jr., second-generation leader of NASCAR and its track-operating arm — International Speedway Corp. — saw what he believed was a lack of respect in the traditional sports industry.
The topic was ongoing talks with networks about a blanket TV contract for NASCAR, which had always relied on the speedways to strike their own deals. France had seen the number of zeroes at the back end of other sports’ contracts and felt his industry, which routinely packed 100,000-plus fans into tracks and drew a few-to-several million TV viewers, deserved more respect from the networks.
“We’re not gonna stick our heads in the sand and keep getting our ass kicked,” he once said.
It was the late-’90s and NASCAR was riding a growing wave of popularity, fueled in large part by drivers Dale Earnhardt and Jeff Gordon, whose contrasting images were the stuff of a marketing director’s dreams. In those high-flying days, Bill Jr. recounted the words of his father, NASCAR founder and longtime leader Big Bill France.
“You either get bigger or smaller. Nothing stays the same,” said Bill Jr., who died at 74 in 2007, well before that bigger-or-smaller needle began pointing in the wrong direction.
A few examples:
• Last season, NASCAR’s top-level Cup Series races averaged 3.34 million viewers on its two networks and their cable affiliates — NBC and NBCSN, Fox and FS1. According to industry periodical Sports Business Daily, the 3.34 million number was down 18 percent from 2017 and less than half of what it was 10 years ago.
• The 12 ISC tracks that are hosts to Cup Series events have been lowering seating capacities for several years — as have non-ISC tracks. In the previous decade, ISC tracks housed about 1.1 million seats; today that number is under 700,000. Actual attendance figures are sometimes well below that, judging from TV views of empty seats, but the official attendance numbers aren’t provided by NASCAR’s tracks.
Daytona International Speedway once reportedly had 168,000 seats and all were usually filled for the Daytona 500. The Speedway took away about 20,000 backstretch seats 10 years ago, then removed the remaining 46,000 in 2015 as part of the Daytona Rising renovation that brought all of the current 101,000 seats to the frontstretch.
• Sponsors, especially big-money corporate partners, are harder to find. Recent years have seen the departures of Lowe’s, Target, Home Depot and others. Just this past year, defending champion Martin Truex Jr. was forced to find another team because his team owner, Barney Visser, shut down the No. 78 team because he lacked enough sponsorship money to pay for a front-running team.
The idea of spending caps for the individual teams has been floated, in an effort to contain costs — costs that were once sufficiently covered by corporate dollars.
Additionally, Monster Energy will end its title sponsorship of NASCAR’s Cup Series after this season, and NASCAR has suggested moving to a different type of series sponsorship, one that involves multiple companies instead of a single major benefactor. The sponsorship issue also affects NASCAR indirectly, since individual sponsors carried a lot of the marketing load.
Of those issues, TV is most worrisome for the longterm health of NASCAR. Ticket sales and sponsor deals can generate millions of dollars, but TV contracts bring in billions.
NASCAR’s first blanket network contract, starting in 2001, was worth $2.4 billion for six years. The next one, starting in 2007, was worth $4.8 billion for eight years. The current deal, which actually began in 2015, after NASCAR’s TV numbers started declining, was even more staggering: Between Fox and NBC, a combined $8.2 billion for 10 years, through 2024.
Those numbers certainly help NASCAR weather current storms, and also keep the tracks in good financial shape, since the NASCAR/network contract directs 65 percent of the overall dollars to the tracks (25 percent goes to race teams through race-purse distributions, and 10 percent to NASCAR).
According to ISC’s recent annual report for fiscal year 2018, its net income was $225.3 million on revenues of $675 million. TV accounted for $255.8 million of the revenue, compared to $109.6 million in ticket sales.
The length of that current network contract, not to mention its dollar figure, provides an obvious backstop for NASCAR as it searches for lost traction. But beginning with Bill France Sr., NASCAR leadership has always looked well beyond the here and now, so for its long-term health, the numbers need to stabilize and maybe even start pointing northward again.
“All major sports leagues go through ebbs and flows in terms of popularity, fan avidity and business commerce,” says Jimmy Bruns, senior vice president for international marketing agency GMR, which is headquartered in Wisconsin.
“The challenge for everyone, including NASCAR, is to stem the decline as fast as possible and begin the rebound. I think it’s fair to say NASCAR has not been able to do that as quickly as they would have liked, but I do believe they are doing the things that need to be done, and now we need to see how those things come together and if they pay off.”
“The things” mentioned by Bruns — at least the most high-profile of them — appear ready to be rolled out over the next three seasons, beginning in a couple of weeks.
Big moves ahead
Phelps’ optimism is based on two sea-changes he’s eager to tout, sandwiched around another he’s keeping close to the vest.
The first arrives in two weeks at the season’s second race, at Atlanta Motor Speedway. At all races on ovals a mile or longer — which is 28 of the 36 annual races — the race cars’ engines will include “tapered spacers,” which will reduce speeds a bit, but also, like restrictor plates did at Daytona and Talladega the past 30 years, will likely bunch the cars closer together and make it harder for a few faster drivers to separate themselves.
NASCAR tested the rules package at last May’s all-star exhibition race at Charlotte Motor Speedway, and it got good reviews for the improved quality of racing (i.e. lots of traffic).
“I think this rules package is not a panacea for everything that is ailing NASCAR,” Phelps says. “Do I think this 2019 rules package will be successful for us? I do. It will be an eye test. When we get to Atlanta and out to the West Coast … did we hit on the right thing? I think we have.
“Look at the Atlanta race last year. Kevin Harvick dominated the race. It was a great race if you were a Kevin Harvick fan. I’d suggest it probably wasn’t our best race of the year.”
Harvick led 181 of the 325 laps, including the last 25 as he pulled away for a nearly 3-second margin of victory, which is practically a rout by modern NASCAR standards.
In past years, NASCAR occasionally invoked new marketing strategies, and often new people to oversee them, in an effort to better promote the ongoing product. This “tapered spacer” approach seems to be more of a ground-up effort — an old-fashioned philosophy of building a better mouse trap and waiting for the customers to notice.
GMR’s Bruns suggests the new racing package will be “a significant change.”
“If it does produce close, competitive racing,” he says, “it might win over the fans and ultimately lead to more viewers.”
Skipping ahead to the third step of NASCAR’s current big-picture plans, a new model of “stock car” is on deck for the 2021 season. The “Gen-7” cars, Phelps promises, will bring back more of the stock look and feel to NASCAR. And as a bonus, maybe lure additional manufacturers to the sport, which is currently occupied by just Ford, Chevrolet and Toyota.
And in the auto business, they’re not called manufacturers, but OEMs — Original Equipment Manufacturers.
“It’s an important step for us,” Phelps says. “The body styling of the car will look more like a Mustang, more like a Camry, more like a Camaro. Those things are important to our OEM partners, and any new OEMs that come in. This rules package this year bridges us to this next generation car.”
That bridge crosses over the 2020 season, which might literally be a groundbreaking campaign. There’s talk of Nashville’s Fairgrounds Speedway returning to NASCAR’s schedule for the first time since 1984. The idea of a condensed season, featuring midweek races, is being tossed around. Maybe another road course, given the success of the new Charlotte “roval” race last fall.
“We have all kinds of things that are on the table,” Phelps said late last season. “… Other things that we hear from fans a lot, more short tracks, more road courses. I think there will be some changes that we will make for 2020.”
‘It’s really about Jim’
Phelps grew up in Vermont and was a four-year track standout at the University of Vermont from 1981-85. That might not sound like the stereotypical upbringing for a stock-car fan, but he was indeed a regular at Catamount Speedway, 15 miles from his house.
He spent 14 years in marketing for the NFL before joining NASCAR in 2004. He had multiple executive titles within NASCAR’s marketing arm and was elevated to Chief Operating Officer last spring, just months before he was tapped to replace Brent Dewar as the fifth president in NASCAR’s history — he follows Bill France Sr., Bill France Jr., Mike Helton and Dewar.
Phelps has the prime real estate inside the Daytona Beach home office. But he knows where the buck stops: In an even nicer office across town, alongside the Halifax River on Ballough Road, where Jim France prefers to work and where he oversees the family business in a decidedly different manner than his father Bill Sr., brother Bill Jr., and nephew Brian.
Jim France was named interim chairman and CEO in the wake of Brian France’s legal issues last fall. Without fanfare, the interim labels eventually disappeared. Jim France declined to comment for this story, suggesting he’d prefer to talk later, after there’s a resolution to NASCAR’s effort to buy back shares of ISC and take the company private. France’s niece, Lesa France Kennedy, chief executive officer of ISC, also declined an interview request.
There’s also the ongoing intrigue of the France family reportedly seeking a financial partner (or partners) in NASCAR, which is private and tightly held by the family.
But Jim France isn’t out of sight. Last fall, he became a regular visitor to events. And to hear Phelps, he’s most certainly not out of mind.
“We have new leadership here. The leadership is Jim France,” Phelps says. “It’s Jim France’s vision. It’s Jim France’s plan. It’s Jim France who’s going to get people to collaborate and be part of this. It’s really about Jim.
“The man just loves racing. The man loves NASCAR. … The passion he has for the sport, it’s just undeniable.”
Given Phelps’ description of Jim France’s heavy involvement, there’s a bit of irony, based on past perception. While his father and older brother (more than 11 years separated Bill Jr. and Jim) were considered leaders of a stock-car racing empire, Jim was alternately known as the “motorcycle France” and the “sports-car France.”
At 73, and assuming the number of working years he has remaining are fewer than those already logged, it would add to the irony if his greatest achievement turns out to be that of NASCAR savior. It’ll take some heavy lifting.
Outside views
“To me, it looks like NASCAR has been throwing darts,” says Robin Miller, veteran motorsports journalist known mostly for his work in Indy-car racing. “You’re never going to get back to the numbers you had, so forget it. What you want to do is cultivate the product and make it entertaining and fun to watch again.
“They need to cut two hours out of the race and make them real races. You watch NASCAR, some guy leads 400 laps and then doesn’t win the race because of some (BS) yellow flag, debris on the track, stuff like that.”
Indy-car racing, however, could be envious of NASCAR’s current situation, Miller concedes.
“Indy-car fans, bless their hearts, they’ll say to me, ‘did you see all those empty seats at Bristol?’ ” says Miller, referring to one of NASCAR’s most popular venues. “I say, ‘yeah, but they still had 75,000 people; when is the last time we had 75,000 except at the Indy 500?’ ”
Mike Harris, who became the Associated Press’ motorsports writer in 1980 and held that position until his 2010 retirement, doesn’t share all of Phelps’ optimism.
“TV no longer has the same power as it once did,” he says. “The series sponsor doesn’t make a huge difference in the way people view the sport and they are pulled in too many directions when it comes to entertainment. I’m afraid NASCAR has fallen back into niche status and will likely stay that way, at least for the foreseeable future.”
Tom Roberts was a longtime public-relations man in NASCAR, counting Bobby Allison and Rusty Wallace among his clients. In boom times, he went out himself and brought in three sponsors for his driver.
“A lot of people made a lot of money during the upward spiral, when the sponsorship dollars were flowing in,” Roberts says. “Drivers demanded mega-bucks and got it. The money made in souvenir sales was through the roof.
“I get asked what happened and who or what was to blame. I do feel that continuously rising ticket prices and hotels gouging the fans were contributing factors. But it’s also true that losing big star power contributed greatly.”
Phelps agrees with the star-power issue, citing the retirements of Jeff Gordon, Tony Stewart, Carl Edwards, Dale Earnhardt Jr. and Danica Patrick over a recent three-year span.
“That’s a lot,” he says.
On the issues
Phelps touched on many issues during a fast-paced, 35-minute interview session this week.
• On trying to maintain a loyal fan base and bring back of those who may have felt disenchanted by any number of gripes NASCAR has heard over recent years — the closing of historic tracks, the arrival of Toyota, the confusing rulebook, etc.
“We’re not going to make everyone happy. We can’t. With that said, at its core we need to make sure we’re taking care of our longtime fans. That’s critical for us.
“Our philosophy — which was wrong — was ‘hey, don’t worry about it, the hardcore fan is going to be there regardless, so let’s change who our brand is and try to do things differently that might make it feel more modern.’ We were chasing a different fan that was outside of this core base. So what we need to do today is make sure we’re giving those core fans what they want.”
• On America’s declining “car culture,” particularly among the younger population.
“I don’t think it’s quite as bad as people think it is. But having said that, we have to market to them differently. It needs to be the excitement of what happens on the racetrack, it needs to be relevant, it needs to have the characters that made this sport. The drivers have always been at the center.”
• On what sagging TV ratings may mean down the road for future TV deals.
“Are we going to have a 50-percent increase in ratings for the Daytona 500? Probably not. But there is a plan, how we’re approaching things is going to be completely different than where we’ve been in the past.
“What we need to do is stick with the fundamentals. It’s about putting the best product on the racetrack, first and foremost. Then marketing to the fans in the way they want to be marketed to. If we’re able to do that, everything else will take care of itself.”
• The future of mass media.
“The media landscape is changing so quickly. TV viewership continues to slide. Not just our sport, TV viewership in general. What it means is, people are consuming sports and entertainment differently than they used to, and doing that in an accelerated pace.
“We have six more years with our current television partners. Thinking back to where we were six years ago, it looked completely different. Not just for NASCAR, for everybody. How people consumed things was different.”
Whatever the topic, Phelps can quickly wrap it in optimism. Part of that must be the marketing man ingrained in his psyche. Part of it is necessary.
“You can say the words, ‘oh we’re gonna change the narrative,’ ” he says. “Of course you want to change the narrative. Who wants to be involved with something that … ‘hey, things are on a downward trend.’ They want to be involved in things moving in the right direction.
“How do you change the narrative? You change it by being positive, but also, is there a vision for where the sport is going? Do you have a plan to fix those things where your headwinds exist? Do you have an industry that’s going to collaborate?”
Not surprisingly, Phelps says the answers to those questions is yes.
“I truly believe that.”
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