After helping to make Nextel Cup racing the force that it is today, ESPN has opened the pocketbook in a big way to get back into the NASCAR business
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Article originally published in 2006 Athlon Sports Racing annual
It was called, according to the T-shirts the crew working NASCAR for ESPN2’s RPM 2Night show in 2001 had made up after that season in exile, “The Outside Looking In Tour.”
The back of the shirt listed the glamorous venues from which they were forced to do their jobs that season. Places like “Halifax Marina/Pep Boys Rooftop, Daytona Beach, Fla.,” “Diamond Hill & Co. Plywood, Darlington, S.C.” and various race track helipads including “Snake Pit Helipad” in Phoenix. In that first season of NASCAR’s first consolidated television deal, the pain from the divorce between stock-car racing and the cable sports network that had grown with it was still fresh. The bitterness was still real. NASCAR fans could not believe ESPN had been jilted.
While Winston Cup races had been spread out across the dial before 2001, it was ESPN that had most completely embraced the sport. And now, ESPN was on the outside looking in while Fox and NBC were doing Cup races?
NASCAR officials could not believe ESPN hadn’t come to the bargaining table with a bid for the rights that came close to what the sport was looking for out of the deal. If the whole point of getting tracks to agree to sell the rights in one package was to get a fair market value for the growing sport’s television rights, NASCAR couldn’t very well choose a sense of loyalty over significantly higher bids.
So when the 2001 season began, with Fox airing the ill-fated Daytona 500 in which Dale Earnhardt died, NASCAR opted to shut ESPN out by saying that RPM 2Night, a daily show that covered the sport, was a “magazine” show and not a news show. Under the terms of the new contract, magazine shows could not shoot footage inside the track during race weekends. So drivers who wanted to continue talking to ESPN’s reporters had to be shuttled in and out of the track in golf carts, or stop off at helipads on their way home from races.
That’s why it seemed so significant in February 2005 to see ESPN’s SportsCenter, the nightly gathering place for American sports fans, back with such prominence for Speedweeks. There was a set overlooking the track’s victory circle, just as there had been back in the days before the breakup. With negotiations of a new television contract looming near season’s end, the timing could hardly have been more obvious. And the conclusion everyone jumped to in February became a reality in December when the new eight-year contract worth $4.48 billion was finalized.
Beginning in 2007, ESPN, along with its corporate sister in the Disney empire, ABC, will be back in the stock car racing business. While the enormous price tag on the new deal got most of the immediate headlines, the biggest impact of NASCAR’s second major broadcasting contract may very well wind up being just how that deal positions the sport to continue the growth that ESPN helped spark in the mid-1980s and fueled throughout the 1990s with its expanding coverage of the sport. And make no mistake about it, having NASCAR races on ESPN will absolutely change how the sport is treated all the way across the networks’ vast array of programming, promotional and other commercial platforms.
“It’s an understatement to say that we’re delighted to rekindle our relationship with NASCAR,” says George Bodenheimer, president of ESPN and ABC Sports, which not only get the season’s final 17 Nextel Cup races each year through 2014, but also will become the full-season home for the NASCAR Busch Series. ABC/ESPN will have 52 races and plans more than 400 hours of NASCAR programming annually.
“To all the NASCAR officials, all the owners, all the drivers,” Bodenheimer says, “and most importantly to all the NASCAR fans, the millions of them out there, we say, ‘Welcome home.’”
ABC will broadcast all 10 of each year’s Chase for the Nextel Cup races, making NASCAR the centerpiece of its Sunday sports programming each fall while Fox, CBS and, beginning in 2006, NBC, will be serving up the NFL.
“In our minds, NASCAR’s Chase for the Cup is an absolute crown jewel in the sports world and a major asset for our company overall and ABC Sports in particular,” Bodenheimer says. “As for the Busch Series, we really feel like it’s the jewel in the rough. I really look at this deal as another in a series of agreements with new media rights that fuel all of our platforms. In fact, we have 18 different businesses that will enjoy NASCAR products and help fuel their growth.”
What makes the story about a television deal that doesn’t even begin until 2007 relevant for this year, in fact, is that array of businesses connected to ESPN that will begin ramping up for the sport’s return throughout the course of this season.
ESPN Radio, ESPN the Magazine, the network’s products for mobile phones and other data delivery devices that are just being rolled out, all will be part of where NASCAR goes.
“I can’t tell you how excited we are to get the resources of the Disney Company,” NASCAR chairman Brian France says. “All of the Chase events will be live on ABC. It will be a tremendous franchise for them and for us. We’re excited about that.”
ESPN’s first actual NASCAR race broadcasts since the end of the 2000 season will come in the Busch Series races beginning at Daytona next year. Its first Nextel Cup race in the new deal won’t be until late July in the season’s 20th race — Pocono — if the schedule for 2007 stays the same as it is in 2006.
Nextel Cup’s new television calendar will look like the following a year from now:
Fox will have the Daytona 500 and the next 12 Cup races of each season.
Fox and NBC alternated showing the Daytona 500 in the six-year contract that expires after this season, so NBC will have its final shot at the circuit’s biggest race — at least for now — this year. Fox also has the Bud Shootout at Daytona and will broadcast two Craftsman Truck Series races each year.
Speed Channel, which is part of the Fox corporate family, will continue to air the remainder of the Truck Series schedule as well as extensive ancillary programming — practice, qualifying and pre-race shows — on NASCAR weekends. It picks up the Gatorade Duels at Daytona, the 150-mile races that set the field for the Daytona 500, along with the NASCAR Nextel All-Star Challenge and activities surrounding that event.
TNT, which shares the second half of the season with NBC in the current deal, will strike out on its own to air six Cup races each year, beginning with the season’s 14th race. The centerpiece of its package will be the Pepsi 400 from Daytona on July 4th weekend.
ESPN/ABC takes over after TNT’s six races and completes the Cup season.
ABC will likely do the Allstate 400 from Indianapolis and the 10 Chase races each year, with ESPN carrying the other six in that corporate family’s 17-race Cup inventory.
NASCAR loves how Fox has promoted its racing coverage in recent years, especially when that network has had the Daytona 500. For months prior to the 2005 season, Fox ran promos touting the Super Bowl and the Daytona 500 as signature events on largely equal terms — something NASCAR would only have dared to dream about just a few years ago.
Speed Channel provides Fox with the perfect cable partner to cater to fans who can’t get enough coverage from the track, and the new contract will require that its shows promote live race coverage even when it’s on cable rivals TNT or ESPN or on ABC as well as Fox.
It was important for TNT to be part of NASCAR’s television future for several reasons. One, simply, is longevity. By the end of the new contract, Turner Sports, through TBS or TNT, will have been airing live NASCAR events for more than three decades. But second, and more important, TNT is part of AOL/Time Warner, a media giant with which NASCAR also does extensive business in the Internet arena. Rather than go back and start over with new partners on popular services available to online subscribers, having AOL/Time Warner back in the fold sustains the current relationship.
Financially, the stakes are big. ESPN and ABC will pay about $270 million per year in the new contract. Fox and Speed Channel are paying around $205 million, while TNT is paying $80 million.
That annual figure of $555 million represents about a 40 percent increase in the $400 million average per year in the current deal. Because the current contract increased each year from 2001, however, NASCAR may actually get less television rights money in 2007 than it gets this year as the “old” contract finishes up at around $570 million.
NBC elected not to continue in the negotiations for the new deal after losing money the first go-round.
There’s much debate within the television industry whether sports rights contracts should be expected to be profitable in and of themselves — the argument being that not having attractive sports events hurts a network more on the bottom line than the money that might be lost in acquiring them. The executives involved in the new deal, predictably, sound convinced that they can make it all work out just fine.
“When we started (in 2001), we felt that NASCAR was an important product,” says Ed Goren, Fox Sports president. “But the reality is, it took a couple years for Madison Avenue to buy into that.
“Over the last five years, our regular-season ratings have grown by 20 percent. We just came off our highest-rated season ever, averaging a 6.0 rating. You look at the Daytona 500, we didn’t sell out that first year of the Daytona 500, yet over the last five years the Daytona 500 has averaged a 10.5. In ’05, we had 35 million viewers. It was seen in more homes than any NASCAR race in history.
“I think it’s just taken a while for Madison Avenue to catch up with what we all believed in five years ago. I think we’re starting (the new deal) from a much different base.”
David Levy, Turner Sports president, agrees.
“NASCAR has come a long, long way over the last couple years,” he says. “What we’ve seen is we’ve not seen the typical NASCAR advertiser, meaning the ones that are sponsoring the cars, but we’ve also seen a cross-section of a whole bunch of new advertisers that have come on board in support of this event.
“It has become mainstream, if you will, from an advertiser’s perspective. But the key here is there’s still a tremendous amount of growth. I think there’s still a lot of growth in the ratings side. I still believe that there’s going to be more and more advertisers, as you see the ratings grow, become more attached to this sport.”
And while the coverage on Fox, Speed, TNT and even ABC will all be part of whether the new television deal does well on the bottom line, the fact remains that only one of NASCAR’s partners in that contract is at the center of deciding what “mainstream” means in the world of sports. When ESPN had rights to the National Hockey League, especially the Stanley Cup playoffs, professional hockey was a prominent part of SportsCenter highlights and the network gave the NHL promotion suited for a major event. As the NBA emerged as a more prominent part of ESPN’s programming, it became difficult to go more than 15 minutes in a nightly SportsCenter without hearing the name “LeBron James.”
Who knows? By February 2007 when ESPN comes back to begin doing Busch races, the guys on SportsCenter may even have a few racing catchphrases to drop into the sports fans’ lexicon.
But sorry, guys. Fox will still be around, and we’re pretty sure Darrell Waltrip has “boogity, boogity, boogity” trademarked by now.