Is too much NASCAR a bad thing?
Since 1982, Dr. Joseph Mattioli’s big asphalt triangle in the woods of northeastern Pennsylvania has hosted two Sprint Cup races a year. The combined revenue from hosting these two events annually for nearly three decades has pulled Mattioli back from the verge of bankruptcy and turned him into a millionaire many times over.
So when Mattioli says two Cup races a year is one too many for some tracks, including his own, it’s worth taking note and asking why he questions an asset that he could sell for upwards of $200 million.
“The answer to the question is in the grandstands. There’s a lot of empty seats, aren’t there?” posed Mattioli, whose Pocono Raceway hosts its second Cup race in eight weeks on Sunday. “The fans can’t want more races. We’re oversaturated. It was good for all of us at one time, but now, no.”
From 1972 to 1996, NASCAR held between 28 and 31 Cup races a year. Then, in a five-year stretch beginning in 1997, NASCAR expanded the schedule to 36 points-paying races a season. Tack on two exhibition events and the number stands at 38.
Now, however, as attendance figures continue to plummet, illustrated vividly Sunday by images of fallow grandstands at Indianapolis Motor Speedway where around 100,000 seats were empty, the question has to be asked: are 36 points-paying races too many?
“I think we grew too fast,” team owner Felix Sebates said prior to the season. “Some of these race tracks put in 140,000 seats, 120,000.
“Bristol, if I was [track owner] Bruton [Smith], I would cut the two top rows off. When you can only get 100,000 in there, man it’s like, ‘My daddy died and I inherited the ticket.’ Now who cares? You can go down and buy a ticket. Too many seats.”
So far this season, 15 of 20 Cup events have experienced a drop off in attendance compared to 2009, a USA Today report found. International Speedway Corp., which owns 12 venues that host 19 of 36 Sprint Cup races, sustained an 18.9-percent decrease in ticket revenue through May, according to a quarterly report.
While they recognize the drop off in ticket sales, both ISC and Speedway Motorsports Inc., which owns seven tracks that host 12 Cup races, blame the struggling economy for the lagging numbers.
“When the economy comes back, the attendance will also,” SMI president Marcus Smith said.
But a tough economy doesn’t account for serious lags in television ratings, and the drop off for those, too, has been staggering. TNT’s ratings were down 9.1 percent from last season for its six-race segment. Fox’s ratings for the first 13 races of 2010 were down 7.1 percent compared to 2009. And of the “75 million” NASCAR touts as its fan base, only 5.7 million tuned in to watch Sunday’s Brickyard 400 – a 13-percent drop for one of the sport’s marquee events.
Within the next week or two, NASCAR is expected to announce its 2011 schedule. And while changes are expected, the number of points-paying races, 36, will stay the same.
Using figures culled from 2009 Sprint Cup box scores, tracks with two race dates experienced an average 14-percent difference in attendance between the events. Only Bristol reported identical figures.
Daytona International Speedway’s 36-percent shortfall from the Daytona 500 to the Coke Zero 400 was the most drastic difference, followed by Charlotte Motor Speedway’s 34-percent drop from the Coca-Cola 600 to the fall Chase race. This supports a theory that more venues and less tracks with two dates could stimulate new markets and allow the sport to benefit from scarcity of supply.
“Look at Auto Club Speedway out in California,” Dover Motorsports president Denis McGlynn said. “The story is self-evident there: one race did pretty well, two races, not so much. So I think the argument there holds up.”
But McGlynn also points out that it’s not as simple as just saying one track, one race. “If you look at the cost of building a facility these days, it’s pretty much required you have two races to have a chance at a return on an investment that’s acceptable,” he explained. “So it’s yes in some markets and no in others and maybe the process of natural selection sorts it all out.”
Still, less should be the goal of the entire industry, said Sabates, a partner in Chip Ganassi and Teresa Earnhardt’s Sprint Cup team. Sabates said the sport as a whole has failed to comprehend the concept of scarcity of market. The long-time owner made a fortune by turning Teddy Ruxpin dolls and Atari games into sought-after commodities in the 1980s and currently deals in high-end automobiles. He’s watched as NASCAR, flush with the success of the 80s and 90s and awash in the corresponding revenues, overwhelmed its fans.
He advocates the elimination of six races, including one from Pocono – “Nice people, but we don’t need to go to Pocono twice.” – Atlanta and Fontana, which has failed to crack a lucrative Southern California market.
If not for experiencing the first limits to its reach in the last five years, the schedule might be even larger than 36 races. But efforts to construct new tracks in the Pacific Northwest and Staten Island, N.Y., failed either because of public disapproval or apathy. ISC, which paid about $110 million for almost 700 acres of Staten Island property in 2005, is having trouble unloading the property for its asking price of $88 million.
Marcus Smith blamed those failures in part on an unwillingness among municipalities to publically fund race tracks as they do other stadiums. He still considers Washington, Oregon, New York City and Minneapolis untapped markets.
“They’re holding two spots on the schedule, race 37 for the New York market and one for the Northwest market,” he said. “[But] I just don’t know if those are ever going to be built. Even when we were rocking and rolling [economically], we observed how hard it was for ISC to get anything going in either of those markets.”
Peter DeLorenzo, an industry analyst and editor of AutoExtremist.com, said NASCAR should have realized the limits of its power with the failures in those markets.
“You would think it would be a little red flag of warning, but the amazing thing about NASCAR is they’re keenly unaware of signals,” he said. “They lost a fortune on that Staten Island deal, and it just doesn’t seem to dissuade them or to affect their thinking in any way.”
DeLorenzo advocates paring the schedule to 25 races, adding at least two more road courses and phasing out some of the “cookie-cutter”, 1.5-mile venues that comprise much of the Sprint Cup schedule.
Still, there exists a prevailing feeling among many within the industry that this, too, shall pass.
McGlynn said NASCAR’s woes are a confluence of three individually game-changing events: the death of Dale Earnhardt in 2001 and the inability to cultivate an equivalently popular, successful star; a cyclical downturn in the economy that became historically devastating; and NASCAR’s failure to create younger fans in an era of multi-platform media.
Though ISC president John Saunders said the ticket-buying public remains young, there is evidence supporting McGlynn’s contention that NASCAR is failing to reach a younger audience.
Fox Sports chairman David Hill told SportsBusiness Journal that his company had recorded a 29-percent drop in the amount of 18-to-34-year-old male viewers. And last year, the average NASCAR fan was 42 years old. Only Major League Baseball’s average fan was older.
Saunders said ESPN and ABC assumptions of the final 17 races of the season will commence a “next key initiative” because of ESPN’s reach into younger demographics.
And while some fans complain about races being broadcast on a cable network instead of broadcast television, races shown on ESPN actually posted a higher overall rating (4.2) in 2009 than races aired on ABC (3.5).
“ESPN was the one who actually saw some increases year over year,” said Julie Sobieski, ESPN’s vice president of programming and acquisitions. “We were up five percent with our part of the package and the move over from ABC to ESPN with some more races and the more consistent start times that NASCAR started. We fully expect the trend to turn around. There are way too many factors in play within any sports trend, something within our control and some outside of everyone’s control, including NASCAR’s as a league.”
McGlynn agrees, saying any knee-jerk reactions now might not be prudent in the long run.
“I think trying to make any long-term decisions about whether there are too many races on the schedule, just because we’re in this malaise created by whatever changes NASCAR made and exacerbated by the state of the economy, I think that’s the wrong reason to make change,” he said. “Three years from now, nobody will remember how bad this was. They should. But they won’t.”
Within the next two weeks, NASCAR will announce its 2011 Cup schedule, which will feature some realignment, according to NASCAR chairman Brian France.
“We’ll have some pretty impactful changes to the schedule that I think will be good for NASCAR fans,” France said. “It looks like there are going to be some really interesting changes to the schedule. It’s not easy, because everybody has a slice of the pie that they want to make sure fits them perfectly.”
Realignment, however, will be imperfect without contraction, DeLorenzo said.
“All the things they are discussing is to maintain the 36-race schedule,” DeLorenzo explained. “They’ll take a date from a current track, but add it somewhere else. It makes no sense. I’d rather have fewer races jam-packed with people and make each event special, rather than having this tedium going on. When people are scraping together dollars to do it, they’re not going to go to the second race.”
This is what “Doc” Mattioli is seeing at his track, which, located in Northeastern Pennsylvania, draws from the largest potential audience (New York City, Philadelphia, Boston and Washington D.C.) of any race on the Cup schedule.
For nearly 10 years, Mattioli operated Pocono Raceway with only one Cup date. When Ontario Motor Speedway went bankrupt in the early 1980s, “Big” Bill France went to Mattioli asking for a favor.
“He asked me to take a race,” Mattioli recalled. “I didn’t want it. At that time I had a NASCAR 500 and an Indy car 500. He begged me. He was in a fix and he had the TV money, so I took it.”
Today, almost 30 years later, he alone seems willing to give it back.