The View from Here: The Business of NASCAR

In a tough economy cutting costs is always at the top of discussion, but how does the economy affect the motor sports market? Moreover, how do you avoid cutting costs to the point where people are not losing jobs? Unfortunately, the NASCAR Hall of Fame (HOF) is looking to cut between $2.5 million and $3 million annually in order to balance its budget. The reason for cutting costs is that attendance figures have not reached the level anticipated in Charlotte's bid for the HOF. However, Tim Newman, CEO of the Charlotte Regional Visitors Authority (CRVA), stated in a recent NASCAR.com article that cutting costs at NASCAR's HOF will not impact plans for any current or future exhibits nor the laying off of 27 ful-time employees. Nevertheless, the NASCAR Hall of Fame has witnessed a decline in the number of people visiting due to a poor and sluggish economy.
Subsequently, when trying to win the business of Hall of Fame participants, NASCAR finds itself competing with places like the Rock and Roll and the Country Music Hall of Fame, two other good attendance draws. Surprisingly, other sources reported that attendance at NASCAR was lower than expected during the summer months. The sluggish turnouts have resulted in a net loss of around $3 million for NASCAR. However, NASCAR is on par with anticipated attendance figures between 250,000 and 350,000 running close to Baseball's Hall but just ahead of Pro Football's Hall attendance according to this year's projected forecast. Meanwhile, Country Music and Rock and Roll Hall's first year's attendance for both venues was estimated at around 800,000 respectively compared to the 800,000 respectively for the NASCAR Hall. In spite of a slow economy, NASCAR's Hall of Fame was still the leader with around 300,000 as compared to baseball's 280,000 and football's 196,000. In retrospect, football's highest attendance ever in the early 70's was around 247,000. In conclusion, the NASCAR Hall is planning a new advertising campaign to help boost attendance.
It's important to understand the dynamics of a sluggish economy whether it's a lack of interest from tourists or the fact that people are just not flocking to the Hall of Fame on which millions were spent building. Ultimately, it's important to remember that some individuals are able to visit the NASCAR Hall only by dipping into their discretionary income. Tim Newman suggested that there are several local promotions in the works; if successful, the local attendance could make budgets cuts less severe. AS

Posted by at 10:36 AM | Permalink | Comments (0) | TrackBacks (0)
Tags: Country Music Hall of Fame, NASCAR Hall of Fame, Rock & Roll Hall of Fame

Corporate Social Responsibility (CRS) has become an integral part of business world now as huge corporations and even smaller businesses are now looked upon to show their commitment to their communities. NASCAR is not lagging behind in fulfilling its role of Corporate Social Responsibility. For example, the NASCAR Foundation came into being in 2006 and has been involved in charitable causes since its inception through different programs and with the help of various non-profit sponsorships. One of its emphasis has been on initiatives to help children to live, learn and play.

This time NASCAR has come up with the Coca Cola Chase for Charity Program in collaboration with its sponsor, the Coca Cola Company. This program involves auction of collectibles, autographed items from race tracks and Victory Lane, and drivers' and teams' personal collections. And since this auction is combined with a noble cause of charity, it has doubled the attachment of fans to this effort. This auction will conclude on December 3. I see this action plan of NASCAR executed at just the right time, when the audience is declining and reduction in viewership is occurring. It is a great way to attract fans in two ways, one by creating excitement of getting NASCAR related collectibles through auction and another by touching fans emotionally through this cause of being charitable.

Besides the NASCAR Foundation there are two more projects NASCAR is carrying forward in betterment of the NASCAR community. One is a "Green initiative" to reduce the environmental footprint of NASCAR and the other one is "Drive for Diversity" to increase minority and female participation in the sport. These efforts of NASCAR towards the good of the whole nation positions NASCAR distinctively in the minds of its viewers and fans. I, being fan of NASCAR, really appreciate the ways it is playing its role in CSR. I believe when our favorites come up with such good causes, the fans feel proud and the loyalty towards that brand increases. The current efforts of NASCAR towards the well being of community is once again making its hardcore fans feel immense pleasure in being associated with this sport and it may also help NASCAR regain some of the lost viewership and attendance. FA

Posted by at 10:33 AM | Permalink | Comments (0) | TrackBacks (0)
Tags: Coca Cola Chase for Charity Program, Corporate Social Responsibility, CSR, Drive for Diversity, Environmental Economics, NASCAR

There is a negative stereotype that circles the world of NASCAR. It is sometimes hard to get people to break their stubbornness and watch a NASCAR race. I feel that there are still many people who do not have the desire to experience what NASCAR has to offer to the sports world. I recently had a conversation with one of my co-workers. I was discussing with her my enrollment in the Business of NASCAR class and she was stunned but also somewhat bothered by the fact that there is a class offered on NASCAR. The questions she presented were "What is so great about NASCAR that they would go as far as to have a class about it? What is the point? It is a boring thing to watch and is not a sport at all." To the defense of the sport, I generously shared with her the information obtained from class.

What she learned from our discussion made her think that just maybe there is more to NASCAR then 43 cars driving fast in circles. There is an actual business behind the sport. She seemed to become curious about other aspects of NASCAR, which leads me to the reason of the need for NASCAR education for people that have no knowledge of the sport. I think that not only would that be a great way to grow the interest in the sport, but also the viewership, sponsorships and the overall excitement of the sport itself. I talked to one person and answered her questions and left a positive impression on her; imagine what could happen if everyone had that same opportunity that she had to learn about NASCAR. RP

Posted by at 4:32 PM | Permalink | Comments (0) | TrackBacks (0)
Tags: NASCAR business

Elaborating on a discussion of the concession stands at NASCAR, it's no surprise in this financially driven society that the number of merchandise options, both physical and virtual, are available to the multitude of NASCAR enthusiasts that represent likely the most diverse fan base in all of professional sports.

Possibly my favorite aspect of the NASCAR.com store was the custom shop page, a truly genius idea in my eyes. In this part of the website a fan, regardless of affiliation or level of NASCAR intensity, can select from many different types of clothing and outerwear as well as use numerous combinations of designs specific to NASCAR or its drivers. A wrinkle in the options that really benefits NASCAR is an extensive version of something I have seen in other similar sites, be they Greek school organizations or sports teams or anything similar. Each piece of merchandise, especially basic clothing, has not only the two basic sides (front and back) available for screen printing, but five possible positions: front, back, both sleeves, and an extra area at the top of the back for an optional driver's signature or nameplate to make the shirt or sweat shirt that much more authentic. This personalizing comes with an extra $5 charge, a perfectly reasonable cost for "genuineness". While most major sports' websites do have the side sleeve option, the personal aspect of NASCAR's edition - autographs, actual driver pictures - enables NASCAR to cater to that many more fans. Speaking specifically fiscally, the occurrence of more numerous merchandise options translates directly to a higher profit margin. The age old equation applies: More people, more money; more money, more fun.

It all comes back to business appeal and profitability, and while the NASCAR.com site cannot provide the atmosphere of a real NASCAR race, it does a great job of providing as extensive a selection of any particular brand of merchandise I've seen. The ability to cater to all types, shapes, and sizes really gives NASCAR a great deal of flexibility in the sales department. What other store offers grill covers, binoculars, cooler cushions, and satellite dish covers all with your favorite drivers' name and number on it, and even some with the ability to be personalized further? The every-man nature of NASCAR's business plan is really one to latch on to, and something I believe will continue to remain successful - as long as the gas doesn't run out. DO

Posted by at 4:30 PM | Permalink | Comments (0) | TrackBacks (0)
Tags: NASCAR merchandise, NASCAR.com

Diversity is one of the biggest issues facing NASCAR today. The sport is seen as a predominately white American sport, but I believe it is starting to change for the better. There are many different diversity programs in many areas that people rarely hear about. Some teams like Joe Gibbs Racing even have their own diversity programs. NASCAR itself has a diversity internship program that provides twelve internships for minorities and women in everything from business to engineering to technical positions. NASCAR's primary diversity program is the Drive for Diversity. Drive for Diversity is the industry's leading development program for minority and female drivers and crew members. The Drive for Diversity program currently supports drivers in two of NASCAR's developmental series. Drive for Diversity also supports crew member candidates through a year-long pit crew training program. NASCAR more recently aired a show on BET, Changing Lanes. I tuned in and watched a couple episodes and was entirely impressed. It really tells a great story about these young drivers and what they really have to go through to compete at the highest levels of stock-car racing. Through the efforts of the sanctioning body and select teams, diversity is a word that is finally getting the attention it deserves in NASCAR. RI

Posted by at 4:28 PM | Permalink | Comments (0) | TrackBacks (0)
Tags: BET, Changing Lanes, Drive for Diversity, Joe Gibbs Racing, NASCAR

If Jimmie Johnson and Danica Patrick were walking down the street, who would be more recognized? Personally, I have the slightest idea what Jimmie Johnson looks like but I know I could easily point out Danica Patrick in a sea of people. Although her racing accolades pale in comparison to Jimmie Johnson's, her face is known by millions of non-NASCAR fans worldwide primarily due to her appearances in several television commercials and print advertisements. Why is Patrick so popular? Is it because she is a woman? Is it because she is an attractive woman? Or is it because she has the potential to be one of the most successful drivers in the NASCAR Universe? No matter what the true answer is, executives in the business world have recognized her ability to sell tickets and increase TV viewership and are trying to cash in.

Recently, Danica announced that she will be participating in the 2011 Nationwide series; however, she is only contracted for half of the races. Is this a sign that her team, JR Motorsports, is merely testing the waters or just teasing their male fans? It is unclear how helpful Danica Patrick will be to the sport of NASCAR. Some experts say that she is purely a showboat designed to bring in money and others claim that she is the real deal who is ready to win races and break records. It will be interesting to see how the world reacts to the addition of Danica to the Nationwide races. We can assume she will make money for the sport in the short run; however, NASCAR should be looking ahead to the future and hoping that Patrick will be the gal who wins races and breaks records. While her physical appearance will initially bring in viewers, once her luster wears off only her talent will be able to save her in the end. TD

Posted by at 10:33 AM | Permalink | Comments (0) | TrackBacks (0)
Tags: Danica Patrick, Jimmie Johnson, JR Motorsports, Nationwide Series