NASCAR: the fast and the curiousAfter marvelling legions of supporters for more than 50 years, family-owned NASCAR has not taken its foot of the accelerator. CEO Brian France tells Scott McCulloch how he is managing the business as the economic downturn bites

38 Spring 2009 Campden FB For more family interviews visit www.campdenFB.com/people

Focus: NASCAR

Campden FB Spring 2009 39

Reports of NASCAR’s demise have been greatly exaggerated. Yes, the National Association for Stock Car Auto Racing, to give it its full title, is suffering a decline in sponsorship, atten-dance and financial stability. And yes, earlier this year, Richard Petty’s venerable team was

forced to merge to survive. Indeed, all the major motor racing series – NASCAR, IndyCar, Formula One and NHRA drag racing – are undergoing their own form of reinvention because of the slumping economy, just as other businesses and consumers are making big spending changes to weather the downturn.

Media reports have made for grim reading, with the Los Angeles Times the most pessimistic: “The recession has cut into race attendance, dried up sponsorship dollars, sparked mergers among race teams now incapable of existing alone, triggered hundreds of layoffs among the surviving teams, and left US carmakers – the backbone of American car racing – teetering on the edge of bankruptcy.”

Well, not quite. “Obviously we are affected by the econ-omy,” says Brian France, NASCAR’s third-generation chief executive and scion of legendary Bill France Jr. “The race fans are affected and the corporate sponsorship base is trying to re-set the business models and figure out the way forward in a recession.”

Andrew Giangola, NASCAR’s, chief spin doctor, says spon-sorship renewals are running at a vigorous 90%. Not so bad, then. France admits his organisation has taken a hit but not the same punch that has stunned other industries. “We are pretty diverse in our different sponsorships and the com-panies that do business with us.” He says he is also acutely mindful of the tapped out American consumer, reeling from a decade-long spending binge and struggling under record lev-els of debt. No wonder then NASCAR is looking hard a “price adjustments” for its fiercely loyal supporters.

There is good news. While some prominent sponsors – Texaco, Wrigley’s and Napa – have abandoned the sport others are holding firm or expanding their NASCAR sponsor-ships. Aflac, the family-controlled insurance company, spon-sored the car driven by Carl Edwards, who finished second in the NASCAR season standings, for just eight races last season. This year, the company has paid to sponsor his car for all 36 regular-season races. Aflac also introduced two new 15-second advertisements featuring Edwards and the Aflac duck during the flagship Daytona 500. Paul Amos, Aflac’s chief operating officer, sees his company’s association with NASCAR as an opportunity to “vault into a serious place of prominence”.

True, insurance is not sexy but it is easy to see how car rac-ing would add some sparkle to an otherwise dry industry. As for NASCAR’s natural sponsors – automotive players – some are thinking of cutting back their involvement, others like ExxonMobil are sticking around. The oil giant has sponsored Roger Penske’s cars for 18 seasons and has been the official oil of NASCAR for seven. Indeed, ExxonMobil entertained some 250 guests in its suites during the recent Daytona 500. “We’re managing our costs in other ways than cutting

communications budgets,” says Jan Crowe, ExxonMobil’s Americas marketing manager.

As for bums on seats, things could be worse. NASCAR attendance figures may be an amorphous thing, but esti-mates are that attendance was down roughly 10% last season, with the national economic problems only becoming readily apparent in the latter stages of the season.

France insists his company is weathering the downturn better than others. “Even now, we’re more effective, we don’t want to act differently on that,” he says. “The biggest thing for us is the sponsorship stuff is market driven. We’ll have to see where all that shakes out, but what we’re focusing on is our fans and what they are going through in terms of their jobs or potentially losing their jobs and the anxiety they’ve had. We are re-pricing to be mindful of that so we will do all we can to help the fans get through and enjoy the sport that they love. That is really our number one issue.”

For more family interviews visit www.campdenFB.com/people

Focus: NASCAR

40 Spring 2009 Campden FB For more family interviews visit www.campdenFB.com/people

Number two is arguably turning a profit. Like most pri-vately-held concerns, NASCAR does not disclose earnings, but France claims his company is ahead of the pack. “It doesn’t mean that we don’t have significant issues and that we don’t have significant challenges,” he is quick to point out.

Brian France became chief executive of NASCAR in 2003 and, after the death of his father, Bill Jr, in 2007, inherited an 18.75% stake in the sanctioning body, worth an estimated $300 million. His sister Lesa France Kennedy owns another 18.75% and his uncle James France 36%. Uncle Jim is also chief executive of International Speedway, the sport’s big-gest owner and operator of racetracks, with a profit of $135 million last year on revenue of $777 million.

Although France has been CEO for nearly six years, he has been actively involved in NASCAR for more than 20. Having

excelled in marketing and promotion, he began to apply his expertise to a business that had long made its name for the charms of remaining old-school. Bill Jr, who had succeeded his own father at the helm of the sport in 1972, had signed some TV contracts, along with a long-term title sponsorship with Winston, and larger sponsors began creeping in over time.

But national acceptance of the Southern-based sport, and respect for its long-standing power to market to the most committed audience in American professional sports, didn’t emerge until the late 1990s. By then, Brian France had already helped lay the groundwork for the victories that would follow. He had, in his early 20s, begun signing major-market radio stations to broadcast races on the sport’s Motor Racing Network. But he truly proved his mettle by working tirelessly for three years to engineer what became, in 2001, the sport’s $2.4 billion television contract with Fox, NBC and Turner Sports.

NASCAR may be America’s fastest growing sport, claiming a fan base of 75 million and a TV audience second only to the National Football League’s. An army of about 100 Fortune 500 companies is involved in NASCAR, but its corporate sponsor-ship revenue is growing at a slower rate than in the past, according to the brokerage firm AG Edwards.

No matter. NASCAR executives are forever aiming higher. In 2000 they became the first major sport to open a Los Angeles corporate office, charged with becoming the most aggressive athletic player in cultivating the entertainment industry.

Six years later, that initiative has spawned a lucrative, if unlikely, partnership between Tinseltown and stock-car

A SpEEdy NASCAR hiStORyIn 1998, in a nod to NASCAR’s 50th anniversary, Bill Jr led an infor-mal tour of some famous spots in NASCAR’s history. From its humble beginnings on the hard sand of central Florida’s wide beaches, the France family’s brand of stock car racing has become a roaring success.

Bill Jr, aged 64 at the time, stopped by the old Streamline Hotel in Daytona Beach, where his father called the first meeting to organise NASCAR on 14 December 1947. On a lark, he turned down the street of his childhood home, a modest one-story brick affair. En route, Bill Jr explained how racing on Florida’s beaches dated to the early 1900s, when rich men and their fast cars vied for speed records up near Ormond Beach.

The discovery of Utah’s Bonneville Salt Flats lured the cars away, and with them went Florida’s image as a hotbed of speed. By the 1930s, Florida’s racing scene was lively again. But it had migrated farther down the beach, where men were building oval tracks near dead-end roads, where the ruckus didn’t bother anyone.

That’s where France lingered longest, at the site of the Daytona Beach Road Course that once stretched 4.2 miles in what’s now Ponce Inlet. “You never knew what kind of racetrack you were going to have until the tide went out,” Bill Jr said. The last beach race, in 1958, drew 27,000 spectators. Daytona International Speedway and its glistening 2.5-mile paved oval opened the following year.

Brian France, NASCAR’s third-generation CEO, wants to ensure that fans can still afford to come to watch the sport despie the recession

Campden FB Spring 2009 41For more family interviews visit www.campdenFB.com/people

Focus: NASCAR

racing: Hollywood tapped NASCAR to sell its latest movies, TV projects and music; NASCAR, meanwhile, hitched onto Hollywood vehicles to extend the boundaries of its impas-sioned fan base. With Hollywood’s help, NASCAR officials are integrating NASCAR drivers and story lines into every form of entertainment imaginable: from cartoons for the pre-kin-dergarten set to soap operas; from reality TV to made-for-TV dramas; from MTV videos to live race-day concerts; and major studio releases such as Pixar Studio’s Cars.

What’s next? “Right now, I think we’re very much focused on the economic circumstances that we find ourselves in and making sure that our business model, which has some flexibility, can be readjusted and re-priced for this kind of economy,” says France. “We are working a lot on that. We have to keep going on behalf of the industry and so there aren’t any new initiatives that we will be announcing because we are focusing on our core business.”

No recent initiative by the Frances has been more sig-nificant than the introduction of the standardised Car of Tomorrow, which is meant to enliven races by making it easier to overtake. It made its debut in 2007 at Bristol Motor Speedway in Tennessee, receiving sometimes sharp criticism from drivers. HA Wheeler, long-time race promoter and presi-dent of Lowe’s Motor Speedway, said the Car of Tomorrow would produce close racing, which would produce rivalries and drama that could bring the fans back. “With this car, I can see that sparks will fly once again.”

Sparks flew, initially among racing purists miffed at NASCAR’s tinkering with racing traditions. “Like anything, if it is new it is going to be widely criticised until people can

sort out if it is a really good concept,” says France. The big-ger idea is that with less belt-tightening poorer teams stand a better chance of competing head on with richer teams.

“Most of the teams that were critical now have seen the benefits that we had promised coming true, and they’re very necessary now in light of this tough economy because part of it – a third of it – was getting the cost down. You need less car. You need less engineering support for the cars and every-thing else, so the car is very successful,” insists France. “We are an entrepreneurial family and if it can add some value in something we participate in then we will do that.” l

NASCAR’S FOuNdiNg FAmilyThe National Association for Stock Car Auto Racing (NASCAR), the largest sanctioning body of stock cars in the US, was founded by Bill France Sr in 1948. A tough, towering figure, Bill Sr nurtured it with what veteran racers recall as “an iron fist”.

His elder son, former NASCAR president Bill France Jr, was known for a management style only slightly more temperate during his 31 years in charge. He had a rare touch for running NASCAR, a tricky sport even on its best days. When it came to making difficult decisions, Bill Jr was frequently brilliant and also frequently criticised. But making a call, any call, in a sport where men can die in an instant, takes nerves of steel. And Bill Jr never flinched.

While the milestones during his near 30-year reign are many, Bill Jr’s biggest legacy is that he saved the sport during its darkest hours in the 1970s and carried it through to unprecedented heights on the national and international scene. He died in 2007, aged 74, after a long battle with cancer but not before he had handed the business on to his son, Brian.

Brian is every inch his father’s son – confident and always the boss of this tightly owned family sport. He may be criticised for many things, but he’s a born salesman.

Today, the Frances are one of the most powerful families in professional sport. Bill Jr’s daughter, Lesa France Kennedy, became president of International Speedway, while his brother, Jim France, is vice chairman of NASCAR and CEO of International Speedway. Internationally, NASCAR races are broadcast in over 150 countries.