Turning Radius: NASCAR tries to engage Millennials
NASCAR is trying to respond to the challenge faced by almost all spectator sports — how to engage Millennials.
By the mid-2000s, NASCAR had evolved from modest origins — car races on the sands of Daytona Beach more than 60 years ago — to become a multibillion- dollar industry. Capping nearly two decades of double-digit growth, stock car racing was attracting an average of 75 million TV viewers a year, second among sports only to professional football. Fortune magazine had declared it America’s fastest-growing sport, and marketing firm PSB had named NASCAR the second-hottest brand, ahead of Google and iPod. (Blackberry was No. 1.)
But 2006 marked a turning point. Within five years, attendance at NASCAR races had declined by 22%, and racetrack revenue was in free fall, dropping from $235 million to $144 million at International Speedway Corp., the largest racetrack operator. Meanwhile, TV viewership was down 30%, and key sponsors were leaving.
In 2011, NASCAR CEO Brian France, who took over NASCAR from his father, Bill France Jr., in 2003, began looking for answers. Advisers told him that the recession had been particularly hard on NASCAR’s workingclass fan base and suggested business as usual, awaiting a rebound.
France “just didn’t buy” that the recession alone was to blame for NASCAR’s woes, however.
“The digital age was upon us, so I was wrestling with questions like, ‘Are our young fans going to consume us differently? Are attention spans really shortening, and are these new devices really going to be what drives content? If so, how does our industry understand all these things?’” France is quoted in a 2015 article published by Northwestern University’s Kellogg School of Management.
“Everywhere I looked,” he says, “we were doing things very traditionally, which had worked for a long time but wasn’t working anymore.”
In 2011, France hired a consulting firm to conduct a market study, and the results were even worse than he’d feared. According to the Kellogg School article, the consultant described NASCAR in 2011 as being in a state of “dangerous irrelevance.”
NASCAR — with a fan base dominated by white men over 40 — hadn’t engaged younger people or identified new customer segments. It also lacked a strong online presence. NASCAR drivers, whose season, at 10 months, is the longest of any professional athlete, weren’t interacting with fans on social media. Even when Millennials came to the races, there was limited cellphone service or wifi to let them share their experiences online in real time.
France and his team responded with a plan aimed at expanding the sport’s base. During the following months, NASCAR brought back in-house the website and other digital properties that it had outsourced. Drivers received media training and marketing resources, and racetracks pledged capital improvements.
In 2013, International Speedway Corp. (ISC), a publicly traded company led by France’s sister, Lesa France Kennedy, announced plans to spend $400 million to revamp Daytona International Speedway.
The project, called Daytona Rising, delivered new concourses, restrooms and concession areas, wider seats and free wifi. By tearing down the back grandstand, ISC reduced the number of seats to 101,500, about two-thirds of the track’s previous capacity. Two years ago, the newly renovated facility opened in time for the Daytona 500, drawing its first post-recession, sell-out crowd.
ISC also has invested in upgrading other tracks, spending nearly $180 million to revamp Phoenix International Raceway in Arizona.
So far, the results of the turnaround strategy are promising, if modest. Annual ticket sales fell again last year, but admissions in just the fourth quarter grew over the year before.
ISC, which owns 13 NASCAR racetracks across the U.S., said its total revenue rose by 1.6% in 2017 because of an increase in sponsorship and broadcast income. Media broadcast fees are the single biggest source of revenue for NASCAR and its racetrack company partners.