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NASCAR's Success is a Win-Win-Win

The 2021 season has seen some exciting return trips to Phoenix and Atlanta, with both events scoring well in Jeff's poll. While these races were considered better due to their later position in the season, being playoff races, and more being at stake, it's clear that the Gen-7 car is paying off. But does successful racing mean a successful business?

Not entirely. So, how does NASCAR make money? The answer lies in television.

Getting butts in seats is a big goal for NASCAR, with in-person attendance set to improve this year. However, their most important revenue stream comes from broadcasting contracts. Back in 2012, NASCAR made an eight-year deal with Fox for $2.4 billion, which was eventually extended for another $1.4 billion on top of that. In 2013, NASCAR made another deal with NBC for $4.4 billion. These deals will keep NASCAR in the air until 2024 at a price of $8.2 billion.

According to Jerry Perez's article on The Drive, NASCAR also earns money through sanction fees and title sponsors for the series itself. For example, it costs Monster Energy $60 million to be the title sponsor of the cup series between 2016 and 2019. NASCAR earns even more money from title sponsorship of each individual race. Companies pay millions of dollars to sponsor an event like the Kwik Trip 250 presented by Jockey Made in America at Road of America.

All of this money keeps the NASCAR machine going, but the organization doesn't keep all of it. About 65% of broadcasting revenue goes to the tracks, 25% to the teams, and just 10% for NASCAR itself. NASCAR's financial motivation to make racing more entertaining is obvious. The more people watch NASCAR, the more leverage they have when it's time to negotiate TV contracts.

A more expensive contract isn't necessarily a bad thing for the broadcasters either. Higher ratings mean they can charge more money for commercials during the race. And the more people watching a broadcast, the more people will see their ad. Better racing is a win-win-win for everybody, including the teams.

According to Jimmie Johnson, TV viewers are everything to the sport, as it stands right now. Tune-in numbers drive sponsorship numbers that obviously drive the purse and certainly the money on a given car that the driver shares. Even though it feels like less and less media we consume comes through broadcast TV, it's still a huge part of how NASCAR operates.

A surprising aspect of NASCAR's operation is that in-person attendance isn't as big of a deal as I previously thought. The tracks take such a large share of the TV revenue that they can afford to have years below attendance like 2020, where no one was allowed in the stands. However, NASCAR does have a vested interest in getting people to the track because they now own a bunch of the places they race at.

Back in 2019, NASCAR merged with the International Speedway Corporation (ISC) buying them out for a cool $2 billion. These are all the tracks that ISC owned and operated. While NASCAR might benefit from TV money going to some tracks they own, they still want to sell out every race on the calendar that they can.

The fewer people that show up to the track, less facilities like concessions and other attractions are necessary, and less people who work on the track get paid, which can have a cascading effect through the community surrounding a racetrack. Nobody wants to see a racetrack close down to improve in-person attendance and boost TV ratings. NASCAR must make itself not only America's biggest motorsport but one of the biggest sports overall.

So, how do they do that? That's a little harder to answer. Drive to Survive is one of the biggest accomplishments in both documentary filmmaking and motorsports marketing and recent memory. Not only were they able to shoot, layout, and edit a season's worth of racing in the 10 episodes in just three months but successfully convinced millions of people who had never watched F1 to become fans pretty much overnight.

It's safe to say that this windfall of cultural relevance is the envy of the motorsports world. Every team owner out there saw Zach Brown playing hockey and thought to themselves, "You have a content machine."

WEBVTTKind: captionsLanguage: en- In many ways, NASCAR is anorganization of contradictions.Tradition is a main ingredientbut they want the recipe for the future.They're an iconic American institutionthat's everyone's heard of,but struggling to holdonto their relevance.Now more than ever,NASCAR needs to succeedthey wanna survive the next decade.In some aspects I think they're succeedingand in others they reallyneed to get it together.How can golf of all sports help NASCAR?Turns out they can learn a lot.(gentle music)- Hello, my name is Riley andI'm a friend of the channeland I'm also the artist thatmade the Donut Media Mural.It's finally done afterso many sleepless nights,snacks, Red Bulls, upsand down, highs and lows.Now it's finally here,and I'm so excited you guys get to see it,and have your own versionof it as a sticker.- It's not gonna beavailable for very long,So if you want it,I suggest you go todonutmedia.com right nowand get you one.(gentle music)(paper rustling)(paper rustling)- I'll get straight to the point.NASCAR's biggest problem right nowis finding the right balancebetween the organization's Southern rootsand achieving mainstream success.We'll talk about that first part laterbut right now let's focus ongetting back in the mainstream.NASCAR enjoyed strong cultural influencefrom the late sixtiesto the mid two thousandsbut it can't be denied thatthere or cultural cachehas waned another years since then,but something very fortuitoushas fallen into NASCAR's lap.The kids think NASCAR is cool againor that their shirts are at least,how many influencers and real celebritieshave you seen rocking a vintageNASCAR T in the last year?Probably a lot, NASCARis in a good positionto capitalize on this nostalgia.They need to turn the person who is a fanof wearing Vintage Daleshirts with designer jeansinto fans of the sport thatmade that shirt possible.So how do they do that?NASCAR's primary productfor the fans is racing.It's simple, the better theracing, the better the product.The better the product,the more people want it.From 2013 to 2021 thestock car's driven on trackwere known as Gen-6 cars.The machines were far fromthe stock cars of the '50s,barely recognizable andnowhere near street legal.These Gen-6 cars had themost advanced aerodynamicsin NASCAR's history.A great achievement for thesport, but terrible for racing.The cars may have been more capablebut they were harder to race.All the turbulent air causedby the better aerodynamicsmade it a whole lotharder to follow behind.When you can't follow the car in front,you can't race the car in front.This meant that for a few yearsafter the Gen-6 car was introduced,racing was a little flat.Fast drivers wouldregularly build huge leadsover the field, effectively,running away with the win.That's not very fun to watch.So to solve the problem,NASCAR introduced an effectiveand controversial fix.Stage racing is exactlywhat it sounds like,instead of doing a 300lap race all in one go,the race is broken up into sections.For example, if a race is 300 laps,NASCAR might break it upinto two 75 lap stagesand a 150 lap finale.In between the stagesare competition cautions,which give the teamstime to do a pit stop.The thinking is thatsince the aerodynamicsand other car factorscan cause the field to spread outover the course of the race,these cautions bringthe pact back togethermaking for closer racing.Stage racing was a bit of a bandaidfor the bigger problem,NASCAR that something had to change.The new Gen-7 car debuted this yearat the clash of the Coliseum,if you're a regular Donut vieweryou probably already knowa lot about this car.And if you aren't aregular viewer, go aheadand consider hitting thatlike and subscribe button.NASCAR's goal with the Gen-7 caris to solve the problems of Gen-6,while making stock car racing relevantto modern manufacturers.This car has modern suspension,large single lug wheelswith lower profile tires.And dare I say, it actually looks likethe cars they're supposed to be.The car also relies more onwhat's called ground effect,prioritizing a low pressure zoneunder the car to create aerodynamic gripthat doesn't produce as much turbulencemaking it easier to follow.But this is just one aspectof NASCAR facilitating successful racing.There are more factors, let's define them.For a race to be goodthere needs to be racing.And that means lead changes.If one driver is out infront the whole time,that's not interesting.So the higher the number ofleaders in the race, the better.There also needs to beminimal mechanical failureson the part of the cars.Nobody wants to see a leaderor challenger drop out of the racefor something they had no control over,it's extremely anticlimactic.Since every team in NASCAR usesthe same chassis and tires,performance parody needsto be a priority as well,so smaller teams have a decentchance against the big teams.Now, I'm not saying that every carneeds to be completely equal.Teams that are betterat setting up their carsshould be rewarded for their efforts,but money should not be anoutright shortcut to success.And along with parity,the racing needs to resultin a healthy variety of race winners.As it's a lot less fun to watch something,if you have a good idea of who'sgonna win, just look at F1.And overall, the seriesneeds a logical championshipthat still remains dramatic.We'll talk about thatlast part a little later.But so far the Gen-7 car seems to deliver.It's hard to scientifically quantifyif the racing really is better this year,but there's at least onesource we can turn to.Jeff Gluck is a motor sports journalist,and every week he askedhis Twitter followersif that weekend's NASCAR race was good.And if we compare the racesthat have happened so farthis year to last year's,we can see that yes, the fansthink the racing is better,a lot better, in fact.Atlanta was the worst race so farat the time of this recording,but it still polled 18% betterthan the first Atlanta race of 2021.Now, it's worth mentioning that NASCARwill sometimes hit the sametrack later in the season.And in two of these 2021 return tripsPhoenix two and Atlanta two,those did score better on Jeff's pollthan the first races of this season.But I would guess that theseevents were considered betterbecause they took placelater in the season,they were playoff races,and more was at stake thanthe earlier season races.So the racing is getting better,the Gen-7 car looks like it paid off.But does successful racingmean a successful business?Not entirely, how the heckdoes NASCAR make money anyway?Well, the money comes from the TV.While getting butts in seatsis a big goal for NASCAR,with in-person attendanceset to improve this year,their most important revenue streamare their broadcasting contracts.Back in 2012, NASCARmade an eight-year dealwith Fox for $2.4 billion,which was eventually extendedfor another 1.4 billion on top of that.In 2013, NASCAR made anotherdeal with NBC for 4.4 billion.These deals will keepNASCAR in the air until 2024at a price of $8.2 billion.According to this great articleon The Drive by Jerry Perez,NASCAR also earns moneythrough sanction feesand title sponsors for the series itself.For example, it costsMonster Energy $60 millionto be the title sponsor of the cup seriesbetween 2016 and 2019.NASCAR earns even more moneyfrom title sponsorshipsof each of the races.Companies pay millions ofdollars to sponsor an eventlike the Kwik Trip 250 presentedby Jockey Made in Americaat Road of America.All of this money keepsthe NASCAR machine going,but the organizationdoesn't keep all of it.Of that broadcasting revenue,about 65% goes to thetracks, 25% to the teams,and just 10% for NASCAR itself.NASCAR's financial motivationto make racing moreentertaining is obvious.The more people watch NASCAR,the more leverage they havewhen is time to negotiatethe TV contracts.And a more expensive contract,isn't necessarily a bad thingfor the broadcasters either.Higher ratings means theycan charge more money,if you want to air acommercial during the race.And the more people watching a broadcastthe more people will see your ad.Better racing is a win,win, win for everybody,including the teams.According to Jimmie Johnson,TV viewers are everything to the sport,as it stands right now.Tune in numbers drivethe sponsorship numbersthat obviously drives the purse,and certainly the money on a given carthat the driver shares.Even though it feels like less and lessthe media we consume comesthrough broadcast TV,it's still a huge partof how NASCAR operates.This could be seen as a bad thingfor the future of companyas so many young people consume mediathrough streaming servicesrather than cable.But again, we'll talkabout that in a little bit.A surprising aspect of NASCAR's operationis that in-person attendanceis not as big a dealas I previously thoughtbecause the tracks take such a large shareof the TV revenue.They can afford to have yearsbelow attendance like 2020where no one was allowed inthe stands, but keep in mindNASCAR does have a vestedinterest in getting peopleto the track and that'sbecause they now own a bunchof the places they race at.Back in 2019, NASCAR mergedwith the International SpeedwayCorporation buying them outof a cool $2 billion.These are all the tracksthat ISC owned and operated.There's a lot of them,just because NASCAR might benefitingfrom TV money going tosome tracks they own,they still wanna sell outevery race on the calendar that they can.The fewer people that showup the, less facilitieslike Concessions and otherattractions are necessaryand less people who workon the track get paidwhich can have a cascading effectthrough the communitysurrounding a racetrack.Nobody wants to see a racetrack closeso to improve in-personattendance and boost TV ratings,NASCAR must make itselfnot only America's biggest motor sport,but one of the biggest sports overall.So how do they do that?What does mainstream success look like?Well, I'll be honest, that'sa little harder to answer.Drive to Survive is one ofthe biggest accomplishmentsin both documentary filmmakingand motor sports marketingand recent memory.Not only were they able to shoot, layout,and edit a season's worthof racing in the 10 episodesin just three months, butsuccessfully convinced millionsof people who had never watched F1to become fans pretty much overnight.It's safe to say that thiswindfall of cultural relevanceis the envy of the motorsports world.Every team owner out theresaw Zach Brown playing hockey,and thought to themselves,"That should be me, dang it, I'm cool."With the Gen-7 car looking goodand producing enthralling racing,this sort of mediacoverage is the next stepNASCAR needs to take if itwants to reintroduce itselfas America's Motorsport.But a Netflix series won'tfix everything overnight,NASCAR needs to make a concerted effortto pepper drivers all over pop culture.You might have seen this articlein photo shoot from Vanity Fair.While it makes sense that driversfrom a historicallyglamorous sport like F1would participate in a fashion shoot,there's absolutely no reasonNASCAR drivers couldn't dosomething like this either.I'm telling you, call up Vogue magazine,dress Chase Elliott and RyanBlaney in some Saint Laurentand get it done, okay.I know that wouldn't reallyfit the grizzled imagenormally associated with stock car racing,but that's kind of the point.The Vanity F1 P sent shockwaves through the F1 fandomin the week leading upto the Bahrain Grand Prixbecause it was so out of left field,that's called earned media, baby.And it doesn't have tobe photo shoots, okay.Just get the drivers in front of people,it's a astounded to methat a NASCAR driverhas never been on "HotOnes," that's a layup.Like I mentioned at the top,the public is primed andready to like NASCAR again.People are dropping hundreds of dollarson vintage NASCAR gear,the aesthetic is cool,and the racing is good.This is totally possiblebut there's some speed bumps in the way,and a lot of them come from NASCAR itself.(dramatic music)First, let's talk about theissues I have with the racing,I understand why NASCARadopted stage racing.But I think it's time to start thinkingabout getting rid of it.If the season continues,and the drivers are allhaving an easier timefollowing each other and racing hard,there's little reasonto bunch of cars up to manufacture drama.The tension will come naturally.Now, that's pretty easy for me to say,but I don't think getting ridof stage racing will be quicksince it's an easy way for NASCARto guarantee a dramaticfinish at every event,and that's what they want.NASCAR will have to find the right balancebetween organic competitionand storybook final laughs.I would actually arguethat not every single raceneeds to be made into an epic nail biterbecause then legit and epicnail biters become less special,especially when there are 36races scheduled for the year.My next gripe with the racingis NASCAR's championship system.In most racing series,like formula 1 and IndyCar,drivers and teams earn pointsbased on their performance.And at the end of the season,the points are tabulatedwith an overall winner determined.With this system, it's possiblefor drivers to have slowstarts but gain momentum.Or for a team to come out the gate,guns blazing only to fall apart.Dominate drivers have a goodchance of winning the titleeven if they have a few off days.NASCAR works a little differently,they have a regular season and playoffslike sticking ball sports.If you win a race duringthe regular season,you qualify for theplayoffs automatically.Then over the course of four rounds,consisting of 10 races,you need to outperformthe other playoff driversand stay above the cutoffline for each round.Each playoff driver starts the playoffswith 2000 playoff points plus bonus pointsawarded for regular season performance.Then the playoff points arereset in the next playoff round,plus playoff bonus points areadded, this happens twice.If it sounds confusingthat's because it is.This is a recent development.Like stage racing, NASCARadopted the playoffsto manufacture drama towardsthe end of the season.Let's take a look at 2020.Driver, Kevin Harvick had the most wins,tied for the most top five finishes,and had seven top tens out of 36 races.He also finished fifth in the championshipbecause of this playoff format.Eventual champ Chase Elliotonly won five events that year.Tell me how this makes sense!Proponents of the playoffsystem will say it's goodbecause once the playoffs begin,contending drivers needto be on top of their gamefor every race, which I'll admit is true.But I'll also say it's needlesslyconfusing because it is.Now that the Gen-7 carproduces good racing,I think NASCAR can start thinking aboutdoing away with this weird playoff system.F1's epic battle between Lewis Hamiltonand Max Verstappen last yearprove that a traditional point systemcan still make for extremelytense championships.All right, I think it'stime to talk about golf.The PGA Tour, probablyisn't the first sportyou'd think NASCAR couldlearn a thing or two from.But stick with me.The first thing I think they can borrowis golf's approach to athlete personas.The PGA doesn't play down rivalries,or stifle the personalities of players.I hate to say it, but NASCAR kinda does.How many times have you watched a raceand seen the winner climb outta their car,the first thing outta theirmouth is a monotone sentence,thanking the sponsors?Come on guys, it's boring.Let's show some emotion here.Sure, the teams do get about 75%of their income from sponsors.I know, but I want some personality here.Golfers on the other hand,are a little more animated.And I think I know why this is,golf historically, is amore gentlemanly game.Whereas racers are mostlytalented degenerates.Historically golfers neverhad to be wrangled inor given media trainingbecause they're mostly posh rich guys.Racers on the other hand,did need media training.But I think over theyears, NASCAR overcorrectedand muzzled reallyinteresting personalities.If NASCAR wants people to become fans,they need to let the drivers be themselvesand express themselves.That's how you get heroes and hillsand everything in between.And if you're someonewho complains about NoahGrayson's personality,get a clue, dudehe's exactly the kind ofdriver sport needs right now.This next part is a smaller issue,but I really think NASCARcould do a better jobon the YouTube side of things.Now, I will give them propsfor posting highlights on race day,and more extendedhighlights after the race.But these videos are in blurry720p at 30 frames per second,which comes off as frankly outta touch,and doesn't cut it in 2022.Not when F1 is posting super crisp,1080p at 50 frames per second,and it's sick, looks awesome.When the fans you wantto get are on YouTubeand other video platforms,you need to make it a good experience.Which brings me to streaming,with NASCAR making so much doeoff the broadcasting rights,I don't think a streamingservice like F1 TVis in the cards, at least not right now.According to NASCAR's senior VPof media and productions quote,"We couldn't do anagreement, at least in 2021,"simply because of one, ourfan base isn't there today."And two the team sponsorship model"is so dependent on sponsors of revenue."Those spots sell off of TV eyeballs,"and if you're not sellingoff the TV eyeballs"then it compromises the economic model"of our our entire industry."This is a tough onebecause I know younger fansaren't gonna sign up forcable just to watch NASCAR,but NASCAR also really, reallyneeds that broadcast money.I don't have a solution forthis one, it's complicated.So the only question left now is,how does NASCAR balancetheir desire for new fanswhile still serving their base,the Southern fans that werethere when the sport was born?I think it's easy really,you serve the coreaudience by making racingthat's really good and authenticbecause that's what the core wantsto remember the sport as being.There might be detractorsthat don't like road coursesor races at the Coliseum,but when it comes down to it,racing is simple, it's a battle.And if the battle is close,the the battle is good,and people will want to watch it.Thank you for watching, whoa!Al right, like andsubscribe, all that stuff.Add Donut Media (indistinct) .Be kind, see you next time.