Dude, Where's My Nascar?
Brian France helped turn stock-car racing from Southern curiosity into big business. Now he's looking for the greater riches that lie to the north.
(Business 2.0) – Taking over the family business is never easy--especially when the business in question is a multibillion-dollar enterprise that has become a cultural phenomenon almost overnight. Just ask Brian France. Grandson of the legendary "Big Bill" France, who invented Nascar in 1948, and son of Bill Jr., who built it into a behemoth, Brian faced doubters when he began his first season as chairman and CEO in February 2004. Among racing's old guard, he was seen as a Hollywood slickster (until recently he lived in Los Angeles, not Daytona Beach, the family seat) all too willing to sacrifice the sport's traditions on the altar of entertainment. Among the sponsors that pour millions of dollars into Nascar, there were fears that he'd simply rest on his father's laurels.
One year later, the doubters are mute, and France is riding high. Dressed in a sharp blue blazer, well-scrubbed and baby-faced, he sits in his office next to the speedway the morning before the Daytona 500, radiating the confidence of a guy who's kicked his critics in the teeth. The playoff system he instituted last year--breaking with nearly 30 years of tradition and inspiring great skepticism--proved a huge success. The transition to the sport's new flagship sponsor--from Winston to Nextel--went off without a hitch. Attendance is up; so are TV ratings. No wonder France is psyched. "2004 will be remembered as one of the greatest seasons we've ever had," he says. "We took some risks, and they paid off."
France may be happy, but he isn't finished taking risks. Fiercely ambitious, he aims to turn Nascar into a national sport, to penetrate the North and the West while maintaining its stronghold in the South. In this effort, one of France's main assets is innovation--in media, marketing, and even technology. With a management team full of young aces, he has Nascar speeding toward becoming the most important sports-business story this side of the NFL.
Innovation isn't what leaps to mind when most people--OK, most blue-state people--think of Nascar. Instead, the sport is synonymous with rednecks and fanatics. And certainly there's no shortage of either who turn up for the Daytona 500. Down in the infield, I saw more RVs, Jack Daniel's T-shirts, and barbecues fashioned out of oil drums than I'd imagined existed on earth. The whole scene looked like nothing so much as a Burning Man for Bubbas.
But one man's fanatic is another man's customer--and Nascar has a staggering number of them. The league claims 75 million fans, 40 million of whom spend eight hours or more watching, listening to, or reading about its races every week. Fully 40 percent are women, and 42 percent earn over $50,000 a year. And last year they spent more than $2 billion on Nascar-licensed products.
Corporate sponsorships, of course, are nothing new in pro sports. But no other league has taken them to such profitable extremes. In total, some 1,100 companies pony up more than $1 billion a year to plaster their names on everything from teams and races to tracks and promotions. And then there's the flagship Nextel deal, through which one firm brands the entire season. (The Nascar Nextel Cup is the functional equivalent of calling pro basketball the Nextel NBA.) For the privilege, the cell-phone carrier has agreed to lay out an estimated $750 million from 2004 to 2014--and so far Nextel CEO Tim Donahue thinks it's worth every penny. "Our penetration among avid Nascar fans nearly doubled last year, and we attribute 50 million calls made as a direct result of the sponsorship," he tells me. "It's exceeded all our expectations."
In media, too, Nascar has become a blazing-hot property. Before 2000, Nascar broadcast rights were negotiated by each track, and the sport appeared mostly on cable. France, in his previous role as executive vice president, persuaded track owners to consolidate the rights and then struck a six-year, $2.4 billion deal with Fox and NBC. "That was when we became a franchise sport, appearing week in, week out, with great production values and big-time promotion," he says. Today, Nascar draws the second-highest network audiences of any sport, behind only the NFL. Negotiations have now begun for the period after 2006, and everyone expects the deal that emerges to be a doozy, with Disney's ABC and ESPN networks having apparently entered the bidding.
Meanwhile, on the new-media side, France's hotshot team of digital execs in Los Angeles have made Nascar arguably the most tech-forward of all the major sports. There's Nascar.com, Nascar Radio on XM Satellite, and, most impressive, Nascar in Car--a multichannel digital-cable package that lets viewers switch between in-car cameras and check data on a virtual dashboard. (For this, Nascar has twice won Emmy Awards for technical achievement.)
Considering Nascar's humble roots as a sport fueled by moonshine and reckless bravado, its position today is astonishing. But France wants to take it further--much further. "All the ingredients are there for us to become a truly dominant sport," he says. "But we haven't yet captured all of America's attention."
To get there, France knows, Nascar needs to keep growing, not so much in numbers as in geographic reach, particularly into the white-hot centers of the national media. So he's been pushing relentlessly west and north, opening new tracks in Los Angeles and Chicago and now taking aim at New York--where he's angling to build a track on Staten Island. Nascar already holds its televised end-of-season awards in the Big Apple. The league's desire to be in Madison Avenue's face is urgent and palpable.
France admits that the blue-state push is imperative but tricky. "Our TV ratings in L.A., for instance, are second only to those of the Lakers," he says. "So the audience is there in the North and West, but we have to satisfy it without leaving our roots behind. It's a balancing act that we have to pull off very carefully."
I'll say. The trouble is that, for all the homogenization, Nascar's Southern roots are still very much in evidence. Every race, for one thing, starts with a religious "invocation" (i.e., prayer). Usually it's no big deal, but at the annual awards banquet last year--broadcast on TNT--the invocation stretched out for many minutes and into Jerry Falwell territory. When I asked France about the episode, he grimaced and said, "Oh, God. Tell me about it." Prayers, he added, are a part of Nascar, "but they need to be brief, to the point, and not on national TV."
It's only a tiny example, I'll admit, but it's also a telling one. For as Nascar edges closer and closer to the mainstream, sanding down its rougher edges to appeal to a wider audience and moving races from Red America to Blue, it risks alienating its core market. Not doing so, however, would run the equally great risk of limiting its growth.
And that would be a mistake indeed, I think, because the moment truly is at hand for a reordering of the hierarchy in the sports-industrial complex. It doesn't take a genius to see that pro hockey is on the brink of collapse. And, sad though it makes me to write these words, the NBA isn't doing much better--its ratings stagnant, its image poor, its lack of star quality undeniable. All of which is to say, there's an opening here for a sports magnate with guts and vision.
Is Brian France that guy? We'll soon see. The scion of an epic family who dropped out before completing his degree from the University of Central Florida, he has always been easy to underestimate. No doubt he has lived his 42 years vaguely annoyed at being overshadowed by his famous forebears. But if his success so far at Nascar's helm, in the face of doubters and critics, has taught him anything, it's that in business, being underestimated is almost always an advantage. Your rivals fail to watch their backs--and then they never know what hit them.