65-25-10, HUT! HUT!
On Wednesday, February 24th, NASCAR announced that they would take over negotiating TV deals, which had been in the hands of the individual tracks since 1978. This move has the potential to more than triple TV revenue for NASCAR. I don't know about you; but to me, anytime you can triple revenue, it is a good thing. Lets take a look at how this breaks down.
This year, all the individual TV deals will total around $90 million. Those deals were very unevenly distributed. For example, CBS paid $15 million for the Daytona 500 alone. That is almost 17% of the total TV revenue for one race. Martinsville, on the other hand, has a deal with ESPN worth $14 million each for the spring and fall race……through 2003!!! That is less than $3 million each race. In today's age of mega TV deals, that is very much a bargain price for an event like that. NASCAR is expected to start working on packaging deals to the networks as early as this year, even though many tracks have contract through 2002. It is also expected that total TV revenue will jump to around $300 million, to be divided among around 21 tracks. If evenly distributed, that could be around $14 million per track per year. That is BIG news.
This announcement is about more than just money though. The way I see it, there are 2 clear cut winners emerging from all of this….Bill France Jr. and the fans! France has really put himself in a position that by the power of the purse, can control Bruton Smith like he couldn't do before. I see this deal squashing any talks of a second series, as Smith has proposed before. By getting the networks to commit big dollars to televise NASCAR racing, they aren't going to be as eager to put together similar deals with a new series. That was a major reason the USFL failed in its attempt to compete with the NFL, and they weren't even going head to head. If you remember, the USFL played its schedule in the spring because they knew they couldn't compete with the NFL for the same time slots. In auto racing, you don't have that luxury. Until they come out with domed race tracks (and I am NOT suggesting that somebody should do this) we won't be seeing very much racing in the cold months, and the season is so long, two series would always be overlapping each other. There is no doubt in my mind that the rival series idea has just been KO'd. I also can't see how splitting the current series into two divisions will survive now. Again, I can't see the TV execs putting together super deals knowing that only half the "Superstars" are going to be competing. The way the new TV money will be distributed has not been decided either. Obviously, Daytona and Indianapolis should get a larger portion of the pie than say Sonoma or Dover. I'm not saying the racing is better at those tracks, I am just pointing out that they are "crown jewels" of the schedule and as such, should probably get more of the money. NASCAR reportedly is already working on a formula to distribute the money in a fair manner. Can you imagine the possibilities that this brings? Bruton Smith can now go to Bill France and say that he demands that a second date be added to Texas and Las Vegas. France can agree to give the dates, but he doesn't have to give them money. Alternatively, he could bundle Daytona, Talledega and Indianapolis together with a major Network such as CBS, and put TMS, CMS and LVMS together with TNN or a lesser network. Will Smith be as determined to acquire new race dates, if the payoff is the same, or the TV exposure less? Maybe yes, maybe no…..time will tell. How would Lowes feel if their new investment wasn't going to meet the audience that it could have if televised by one of the "majors"? I don't think that it is a coincidence that this announcement came about only about a week after the announcement that Lowes would become the corporate sponsor of Charlotte. Either way, France now has the leverage to go head to head with Smith and comes out the winner either way. As I said earlier, the fans come out ahead too. The influx of new money should accomplish two things for the fans. First, it should help stabilize the escalating ticket price. I think that NACAR realizes that they are pricing the average fan out of the business. It was widely observed how many fans went home during the Rockingham race after both Earnhardt and Gordon had their troubles last week. With the great racing that was going on that day, I can only venture a guess that they were not die-hard race fans. Many of the fans that would have likely stayed until the conclusion of the race can simply no longer afford the price of attending a Winston Cup event anymore. If ticket prices could just level out for a few years, it would be a great boost to the common fan that saves money all year long for their vacation. Track owners now also have extra money to build high priced luxury suites, add seats and most importantly, improve track safety!! Soft walls need to be installed at all tracks, or at the very least, at any track where the average speed is over 135mph. The technology is there, the money is coming, so just do it!! How many more drivers must endure serious head injuries before something is done? I say do it now, before it is too late. Have you noticed the surface at some of the tracks lately? Daytona and Talledega are terrible. I heard during the Daytona 500, that there were talks about resurfacing Daytona and it hadn't been done since 1978. Come on!! 21 years ago? That is unreal. They repave the street in front of my parents house every 5 years, and that is about how often it sees traffic too. The other way the fan wins is with the television coverage itself. There is no way to deny that the coverage that CBS provides is superior to any other station. Granted, some people are unhappy with the commentating, but if that is really a problem for you, mute the TV and listen to MRN. CBS has more cameras, more camera angles, more graphics and in general more resources than any of the other stations. CBS has the ability to reach more viewers than any of the cable stations. CBS has proven their loyalty to the sport by pioneering live flag to flag coverage, by sticking with NASCAR over the years and by the huge amount of money they are probably going to shell out to continue bringing us the Daytona 500. If they get outbid, it will probably be by Fox, but that wouldn't be such a bad thing either. Does anyone really miss NBC's football coverage that much? Be honest with yourself.
The other group that will win in this deal is the drivers. NASCAR reports that they will stay with the 65-25-10 plan, which basically means the money will be split up with 65% of it going to the tracks, 25% of it going to the drivers purses and NASCAR keeps the last 10% of it. Normally I would say that this would be a huge amount of money for the drivers, but somehow I get the feeling that Jeff Gordon is going to win most of it too. Seriously, this is going to help a lot, but proportionally things will stay the same. Mark Martin earned less prize money for winning Rockingham than he did for finishing 31st at Daytona. I don't think that disparity will change under any new formula. It certainly will help the under-funded teams out though. Dave Marcis probably earns half his money each year at Daytona, I am sure he will be grateful to see his check go up a little at the smaller tracks.
It has been a long time since a NASCAR announcement made me excited. This one has. I only hope that all this added TV money will be distributed wisely, and greed doesn't become the overshadowing factor.