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Taking STock
Nascar isnt just remarkable for being a billion-dollar sport; it is remarkable for being a billion-dollar sport that has remained in the control of the same family since 1948. Brian France, Nascars third generation chairman and chief executive, has his hands on the wheel at a time of economic instability and very different challenges.
By David Cushnan

If Brian France is one of the most powerful executives in global sport, then he also belongs to what might just be the industrys most powerful family. The Frances, three generations of them, have stood alone at the head of Nascar the National Association for Stock Car Auto Racing ever since their patriarch Bill France Sr. founded the organisation as long ago as 1948. Today, still firmly under the control of US motorsports first family, Nascar is a billion-dollar business, a commercial and

i think were at an all-time high and i dont just say that because it sounds good.
corporate juggernaut that runs four major series notably the top-tier Sprint Cup and sanctions hundreds more races across the United States, attracting thousands of fans to events most weeks of the year and many millions more on television. Nascar as a business may have changed beyond all recognition from what began as a way of formalising car racing along Floridian beaches, close to where the season still traditionally begins with the world-famous Daytona 500, but its longstanding blend of close-knit, action-packed, fender-to-fender, rough and tumble racing remains absolutely at its core. At its heart it remains a family firm, based on the same traditional values instilled when it was budding 63 years ago by Brian Frances grandfather and flourishing in the 1980s and 1990s when Brian Frances father,
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Bill France Jr., was its custodian. Four years before he passed away in 2007, the reigns had been passed from France Jr. to Brian and so began a third generation of ownership. While other family members are to be found in high-ranking positions in the Nascar hierarchy Brians uncle, Jim France, is vice chairman and executive vice president of Nascar and chairman and chief executive of sister company International Speedway Corporation (ISC), which controls many of the circuits Nascar visits, while Lesa France Kennedy, Brians sister, is a Nascar executive vice president as well as president of ISC it is Brian who, as chairman and chief executive, runs one of the biggest shows in world sport. As the 2011 season begins to reach what promises to be a compelling climax, the sport and business that he oversees appears in rude health, despite the turbulence of an uncertain economy. Television and spectator numbers have risen in recent months, after several years of decline, while the sport can count on a very healthy crop of official partners as well as a licensing and merchandising operation that might be the envy of every other major sport. In terms of products, the France-owned Nascar empire operates and runs four series: the top-tier Sprint Cup, secondary Nationwide Series, the Camping World Truck Series and, since 2008, the Grand-Am sportscar championship. The Sprint Cup, however, remains very much the pinnacle and one of the biggest spectator sports in the United States. In 2011, it comprises 36 races, plus the non-championship All-Star Race, across 23 venues. Dominated by ovals although the lengths and speeds vary from the 2.66 mile Talledega Superspeedway in Alabama to the

half mile Bristol Motor Speedway the series takes in just two road courses, at Watkins Glen and Infineon, during a season which runs from February to November. Despite a remarkable run of dominance in recent seasons by five-time champion Jimmie Johnson, 2011 has seen several new plot strands that have served to reinvigorate a sport that, whilst never in crisis, has waned somewhat in recent years in the face of an economic crisis and the fragmentation of the media world: 21-year old debutant Trevor Bayne stunned Nascar to become the youngest ever winner of the season-opening Daytona 500, one of five first-time winners as of the end of August; there were 15 different winners in the first 24 races of the year, the most for eight years; veterans Jeff Gordon and long-time fan favourite Dale Earnhardt Jr. enjoyed resurgences; rivalries were stoked

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Nascar has become a billion-dollar business, attracting vast crowds to venues such as Richmond International Raceway all under the auspices of the France family

by the so-called Boys have at it directive from Nascar, which relaxed rules on drivers with the successful aim of producing more close racing, rivalries and contact; and two wild card places were freed up in the end-ofseason Chase, Nascars version of the playoffs. It has provided a potent mix, broadcast across America each week via a US$4.5 billion eight-year broadcast contract with ABC/ ESPN, Fox and TNT that runs until 2014. After three years of falling TV audiences, 2011 has thus far seen a nine per cent yearon-year rise; amongst males aged 18 to 35 the figure has risen by 25 per cent. Although audiences have not returned to anywhere near the peak of a few years ago, Brian France sounds a contented man as he assesses not only the strength of the racing, but the commercial and sponsorship structure Nascar has assembled around it. Despite very

difficult economic circumstances, were doing fine, he says, on the eve of Augusts night race in Bristol, a 165,000 motorsport stadium that has become one of the cathedrals of US stock car racing. Were doing well. While its not easy because the economy is so difficult, Nascar has historically worked very well for business and brands and were going to continue to try and do that. I think one of the things to remember about any kind of growth that you have, particularly in the US, is all of the choices that people have, he continues. Theres so much more professional sports, collegiate sports, that have huge popularity and tradition. We have been able to make a number of gains over the last ten or even 15 or 20 years by providing the best racing in the world and by having topnotch business partners with us who help

us promote the sport and promote their involvement. Then theres the track operators, with expansion in different markets and their promotions. In a very difficult environment weve been very successfully growing the footprint of Nascar but it isnt easy and in this economy it makes it difficult. Were pleased with where our television ratings are and certainly where our attendances are these are huge mega events that are capturing a lot of attention and popularity. That attention and popularity is what, historically, has made Nascar such a magnet for sponsors. No other sport has more involvement from Fortune 100 companies. Nascar official partners have more than 120 track sponsorship deals and sponsorships with more than 45 different drivers, an example of a sophisticated, if cluttered, sponsorship environment that also benefits from the
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The Chase for the Cup

Early on, in a sport thats 60 years old, youre going to have tradition that people are going to be excited about, explains Brian France as he discusses the Chase, the end-of-season play-off style format introduced by Nascar for the 2004 season, and weve had to work through that but the reality is its great for our sport. The Chase works as follows: with ten races to go, the top ten in the points standings have their points reset and are eligible to compete for the championship; this year two wildcard places for the drivers with most wins that lie between 11th and 20th in the points will also be available. However, that the first seven years of the Chase have seen just three drivers win the title and Jimmie Johnson has won the last five in succession has hardly helped the introduction of a format that many traditionalist Nascar fans dislike. Nonetheless, France is convinced that it was critical to re-jig the end of the season. Even now, he says speaking in August, weeks before the 2011 Chase races begins in Chicago, theres a number of storylines and interest levels that are building of whos even going to get into the chase. In a country where people really look at post-seasons and play-offs very favourably, we thought we had to do that to compete in a very difficult marketplace and we think weve been right on that. remarkable brand loyalty displayed by Nascars most ardent fans, particularly when it comes to supporting companies that sponsor their favourite drivers. Its always been a central asset that weve always tried to enhance and develop, says France of Nascars fan loyalty which, according to research by Ipsos, has seen the proportion of avid Nascar fans who feel good about companies sponsoring the sport increase from 65 per cent to 76 per cent from 2010 to 2011. We try to do that by having companies stay around a long time, where theyre identified with a certain team or driver; we try to do that with how we promote their position in the sport. And
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Crossover stars and new markets

That Nascar is the most American of sports was underlined in August when Australian Marcos Ambrose won the Sprint Cup race at Watkins Glen. Remarkably, the former V8 Supercars driver was only the fourth foreignborn driver to win at the top level in Nascar, following in the footsteps of Canadian Earl Ross in 1974, the Italian-born American legend Mario Andretti, winner of the 1967 Daytona 500, and, more recently, Colombian Juan Pablo Montoya. Such is the US-centric nature of the sport and the fiercely patriotic fanbase, the likes of Montoya and Ambrose are still seen as interlopers in a domestic series. However, according to Brian France, new markets and further expansion of the Nascar brand are important, if not perhaps a priority. Weve got a pretty good footprint today, he says of Nascars international appeal and television reach. It could always be better in some countries and territories, in terms of the placement were on. When we get a Juan Pablo Montoya, who has from his Formula One days, a lot of European status and certainly Latin America status, that helps us clear things with countries that would be normally sitting there waiting to see it helps push some of those clearances for us over the top. The opportunity for growth provided by crossover stars such as Montoya is likely to be a common theme over the next few months as Danica Patrick makes her long it starts by taking that very seriously its not just a company coming in and out of Nascar, its a true partnership that we develop with companies like Coca-Cola, certainly the car manufacturers, or Home Depot over many, many years. It is, as another Nascar executive puts it, citing another statistic that says 84 per cent of Nascar fans will associate products adorning its logo as quality products, our competitive advantage. France adds: Our fans are associating products and services with Nascar and theyre consuming them more. Nascars annual central sponsorship revenues rose by ten per cent in 2010, with deals ranging from between US$2 million awaited full-time switch from Indycar to Nascar. Patrick will complete a full season of racing in the second-tier Nationwide Series as well as a handful of races in the Sprint Cup; Nascars hope is that she brings with her not only her dedicated fans but the casual audience that followed her exploits in Indycar, particularly in the Indianapolis 500 each May. Other crossover stars such as 2007 Formula One world champion Kimi Raikkonen, who competed in his first Nationwide Series race in May, and action sports star Travis Pastrana, who is likely to race in the Nationwide Series next year having been forced to abandon plans to do so this year through injury, could provide a similar growth spurt to the sport. I think theyre very important, says France of such drivers. Some of it is beyond our control: how well they perform, which division of Nascar they choose to compete in but in North America were the greatest opportunity and the hardest challenge for a driver to have success in. Were fortunate that we get a lot of attention and crossover stars do bring a lot of interest, they bring a great storyline and they bring their own fanbases who follow them but may not necessarily be core Nascar fans. Its really helpful for us when it happens and we can make that happen more by being the greatest opportunity for the best drivers to compete. and US$10 million annually. Sprint became title sponsor of the main Cup series in 2008, following its merger with Nextel, which had given its name to the series from 2004 onwards, itself replacing the Winston tobacco brand, which had sponsored Nascar since 1972. The original Nextel deal, taken over by Sprint, is worth US$750 million over ten years and is due for renewal at the end of 2013, ensuring a busy period for France and his executive team led by Nascar president Mike Helton, since a new US broadcast rights deal must be negotiated for 2015 onwards too. It will be a critical time for all Nascar stakeholders, with 65 per cent of Nascar

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revenues handed to the tracks, 25 per cent to the teams and 10 per cent retained by Nascar. While teams can rely on a quarter of the sports revenues, sponsorship remains their primary source of income. A sponsorship healthcheck midway through 2011 would not reveal serious ailments but there are undoubtedly aches and pains. Recent major additions notably Farmers Insurances US$50 million plus deal with Hendrick Motorsports to sponsor Kasey Kahnes car from 2012 to 2014 have been matched by high-profile departures; Red Bull will exit the sport at the end of the year, after five years of

as things in pop culture and digital and social media and many other things change, nascar will be changing with them.
running its own team, while another long term multi-million dollar sponsor, Crown Royal, will withdraw from team sponsorship at the end of the season as part of a realignment of its sponsorship strategy that will see it become the title sponsor of Nascars Brickyard 400 event at Indianapolis Motor Speedway. France is phlegmatic about the departures: There are always going to be a company or two in any given year, for whatever reason they dont like the way their teams are performing or they cant get the right driver combinations and things that work as well as they would have hoped. Theres always some of that and when you mix in the economy and the uncertainty of things and it is a big bet with us; we give high impact but it is a sponsorship that is integrated, it has a lot of things, a lot of commitments for companies some pause for a little bit, but the net of it is were having, by all accounts, a pretty good year. Not perfect, but a pretty good year. Be they Nascar partners or sponsors of official teams, the sheer volume of deals in place makes activation, across the United States, essential as sponsors fight with each other for their share of exposure and promote the sport as a whole at the same time. Recent economic circumstances have, according to

Brian France took over from his father, Bill France Jr., as chairman and chief executive of Nascar in 2003

France, dulled that trend but, nonetheless, Nielsen reports that in 2010 Nascar official partners spent US$136 million on television advertising, a rise of six per cent on the previous year. Official partners have spent nearly US$15 million advertising on Nascars official website so far this year, with overall online spending expected to exceed the 2010 mark, itself 24 per cent up on 2009. Some 15 official partners have created Nascar-specific TV adverts so far in 2011. One of the things in our perfect world is we would get a lot of activation out into the marketplace through somebody taking a position with us, France emphasises. There is less of that retail activation and promotion

of the position in the sport, because those are additional commitments that a lot of companies are more careful to make today than they were, say, a couple of years ago. Were trying to give them as much value as we can and that includes the teams they have to do some more things than they traditionally would do, but thats just the nature of where we find the world today. While sponsors are generally left to do their thing, Nascar has this year made its own moves into retail promotion, signing a major licensing deal with Wal-Mart in February. Described as the largest retail promotion in Nascar history, Race Time offering Nascar-branded merchandise, savings on
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Beyond the Sprint Cup: Nationwide and Grand-Am

formalising a relationship between the two series that had seen the France family create the Grand-Am sportscar series in 1999. Officially operating under the Nascar banner, Grand-Am now represents something of a window on the world for the Frances. Grand-Am, our road racing product, is in active discussions with a number of European manufacturers. We have a number of European manufacturers [Lola, Dallara, Porsche, Mazda, BMW and Ferrari] that have a role. Thats going to be the international content that people are familiar with road racing and obviously with Nascar we have a more oval-centric approach. Targets are to get more of the manufacturers involved and increase the involvement of the current manufacturers and showcasing that weve got the best road racing product in the world, certainly in North America. Its going well. The first thing we had to do was integrate that into the Nascar fold because they were run independently that takes a little bit of time, but its going well. Weve just announced that Indianapolis is going to host an event in 2012 and I think youre going to see other manufacturers look at this form of racing. that in some respects. Although Nascar remains proudly familyrun, the size and scope of the business means Frances management style cannot rely on sentiment. It doesnt really come into play for me, he says when asked about the challenges of continuing what is a remarkable dynasty. It may for other family members. I look at it as having a job to do and a lot of responsibility and I want to play my part, however that works out. Im grateful for the opportunity, thats for sure, and we do try and build on family values, on all the years of managing this sport. We know a lot about what works and even more about what doesnt work Im not nave enough that we dont draw upon that as a family quite a bit. But personally I just

While the Sprint Cup gets the lions share of attention when it comes to Nascar, two series in particular are making a significant mark in their own ways. Such is Nascars dominance of US racing that its second-tier development championship, the Nationwide Series, is the second largest motorsport category in the United States. Its very important to us, is Brian Frances verdict. Weve been able to take it to Mexico before and to Montreal theyve got more flexibility with their schedule than the Sprint Cup. It also allows us to build stars and talent Danica race tickets and Nascar in-store fan events was launched across 1,500 of the retail giants stores. Further retail promotions have followed, including the announcement of a license agreement with The 1903 Car Wash Company to create and develop 40 Nascarbranded locations in the next four to five years and a national retail promotion with Dollar General built around the Chase, which will see prizes ranging from free gas for a year to a trip to Las Vegas. Such promotions are tapping into the potential offered by Nascar Team Properties, a subsidiary created in 2010 and open to all competing teams that is centralising merchandising opportunities in the apparel, collectable die-cast, toys and trackside retail markets. The organisation currently has 11
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Patrick is one and there have been many others. Its turned out to be a great series for our television partners and it gives corporations in the US an entry point thats not quite as intense financially for them they can get a real taste of Nascar so it allows us to get smaller brands introduced and even bigger ones there that want to test some things. Nascars short-term strategy for breaking into new global markets, however, is likely to centre around the Grand-American Road Racing Association. Nascar Holdings bought Grand-American in 2008, teams signed up, plus Nascar and 30 of the sports leading drivers, evidence of the close bond between Nascar and its competing teams. I think were at an all-time high and I dont just say that because it sounds good, says France of the relationship. I think there is a strong confidence level between the manufacturers, the team owners and the sponsors that Nascar is getting the majority of things right, trying to control costs for them on the mechanical side, getting the competition fair and balanced the way it should be, and that we understand the challenges theyre going through. Those relationships change but right now were at the best place weve been at in recent memory where the whole industry is working together and these tough times make you do

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Nascar Sprint Cup races are high-speed, all-action affairs: contact and crashes are all part of the show

Crowds watch the action at the inaugural Nascar Sprint Cup event at Kentucky Speedway in July this year

want us to achieve everything that this sport should achieve. Im of the philosophy that you hire the best people in the world that you can get and you give them a fair amount of autonomy to be successful, but with some very strong parameters and ways to measure if were ahead or behind in a certain area. That shapes me well. Were a complicated business, with all kinds of different areas, but we try to minimise the turnover of our top people theyve been with us a long time and they understand the nuances of the sport and how the business side all comes together. We work real hard at retaining talented people because I dont believe the idea that people are somewhat important and its really about the business youve got I think its the people. We take good care of them and we get very good results. With that in mind, it is no surprise that France has a robust message for corporate America about the opportunity Nascar presents in the coming years. They can expect that as things in pop culture and digital and social media and many other things change, Nascar will be changing with them and will hopefully be ahead of the curves. Well make sure their involvement in Nascar is appreciated and that they know its crucial that we have a relationship with the biggest brands and biggest companies in the country and its also critical for them that it delivers value, which we have and will. In the short run and the long run it has to work for everybody and it will. Its about continuing to understand the sensitivities of the economy, for our fans who are trying to get to events, who may be unemployed, who want to renew their tickets; the commercial involvement and trying to be sensitive to how that works; and just be steady in what were doing and stay on our strategy. It starts because were a sport you can trust, that the competition is fair and the racing is exciting and safe and all that. But its also a business and a business to entertain people and also to deliver results for the companies that do business with Nascar. Weve balanced all those things very well historically; thats in our DNA.

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