NASCAR Signs Huge TV Deal
The moonshine-running Good Ol' Boys could never have imagined this: a sport born on dirt tracks in the backwoods of the South is now worth $2.4 billion in TV rights.
During the '90s, television ratings for NASCAR have risen while those for other sports have fallen. Sponsors annually pay up to $12 million to racing teams to have their logos emblazoned on their cars. There have been no holdouts, lockouts or strikes to turn off its wildly enthusiastic fans.
Thus, it's no surprise that NASCAR has quadrupled its TV income and will get $400 million annually under the new six-year deal with Fox, NBC and TBS announced Thursday.
"This sport has taken gradual steps up and along the way there have been some big leaps and bounds. This is one of those," said Jeff Gordon, NASCAR's biggest star.
"But this is probably the biggest leap it's ever taken," he said. "It's neat to be part of it. I'm enjoying the ride."
NASCAR fans cross just about all demographic lines and include those who rooted for Richard Petty, the retired driver known simply as "The King," all the way down to the younger generation's idols such as Gordon and Tony Stewart.
Their interest has fueled a building boom in the sport that has added gleaming new speedways in Texas, Las Vegas and near Los Angeles and expanded and refurbished old ones.
"NASCAR has shown explosive and huge growth on the upside. It is the success story of the '90s," said David Hill, president and CEO of Fox Sports.
Mike Helton, senior vice president and chief operating officer of NASCAR, said the historic TV agreement was made possible by the sport's longevity and continuity.
Helton said the sport, which was formed in 1948 by the late Bill France Sr., has outgrown its bucolic image.
"All that evolution has debunked that old redneck stereotype," he said. "I think we can stand pretty tall and feel real good about the age range, economic level and the male-female balance that we have now. It all comes from exposure."
Bill Croasdale, media buyer for Western Initiative Media, agreed that the NASCAR audience has grown beyond its Southeastern roots in recent years. "It's started to catch on everywhere," he said.
The races are particularly appealing for young men between ages 18 and 34, a group that is difficult to reach via television.
The TV deal, which begins in 2001 and runs for six years with NBC and TBS and eight years with Fox, is about four times what NASCAR is making under its current agreements. Those cover many separate deals for races, most of them negotiated by the tracks on which NASCAR races, with CBS, ABC, ESPN, TNN, TBS and BC.
Sunday's inaugural Winston Cup race at Homestead-Miami Speedway will be the first ever broadcast by NBC, while Fox has yet to show its first NASCAR race. TBS televised races earlier this season at Pocono International Raceway and Lowe's Motor Speedway in Concord, N.C.
In 1985, NASCAR received just $3 million for the TV rights to 28 races. In 1999, total TV revenues were estimated at $100 million for 34 events.
"This puts us in line with the other major league sports. It should have happened sooner," said seven-time champion driver Dale Earnhardt.
The new deal gives NASCAR more money annually than baseball and hockey get from their national TV deals, but less than the NFL and NBA.
The NFL is in the second year of an $18 billion, eight-year deal with CBS, Fox, ABC and ESPN; the NBA is in the second year of its $2.64 billion, four-year contract with NBC and Turner Sports; baseball just completed the fourth year of a $1.7 billion, five-year deal with Fox, NBC and ESPN; and the NHL is in the first year of a $600 million, five-year contract with ABC and ESPN.
Baseball, the NBA, and NHL also receive millions of dollars annually in local television deals.
If there has been any knock on NASCAR in the recent past, it has been that the races have been spread across too many outlets, often making it difficult for fans to figure out where and when the races were being telecast.
"The change for NASCAR fans is it will be easier to find races each week on network television," said NBC Sports chairman Dick Ebersol.
In fact, France noted that, although a precise schedule is yet to be determined, beginning in 2001 "about 70 percent" of the races will be on network television.
With the races consolidated under one TV contract, advertisers will be more likely to buy multiyear packages that will let them appear on all of the races.
Fox, along with cable partners Fox Sports Net and FX, will get the first 18 weeks of the NASCAR season, while NBC and TBS will split the second half.
The season-opening Daytona 500, the sport's premier event, will alternate each year, with NBC getting it in even years and Fox in odd years.
Helton said he sees no end in sight for the spectacular growth of NASCAR.
"What we have in our favor, in an odd kind of way, is we're taking our sport from rural areas to urban areas," he said.
"It's all an evolution," he said. "We're going into urban markets now that continue to fuel our growth, and we're fortunate to be able to do that. With this (TV) deal in place, our marketing and licensing guys cn go out there and package our sport as an entertaining and reputable and salable product."
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