NHRA Pro Racing & The NASCAR Money Model
There’s been quite a shift in the tectonic underpinnings of racing in the U.S. these past couple of weeks.
First, after 56 years as a single entity, the NHRA decides to sell off part of its drag racing mothership to an investment and acquisition group – HD Partners. NHRA Pro Racing is the company that results (once it gets past the tax and regulator techs), and it will handle all straight-line racing and marketing and money-making at NHRA-sanctioned drag races above the Sportsman ranks.
The possibilities of NHRA Pro throwing off multi-millions in revenue from merchandising, etc. are ready and waiting, but the really big future money hinges on electronic distribution of the product -- the races and all the hoo-haa around them. More on that later. The remainder of the original NHRA, now called the NHRA Association, maintains its clear original mission even more directly – as an educational and safety and sanctioning body.
Wally Parks must be very proud, as he should be, that the NHRA Association will be without financial worry and can spread the gospel of safe drag racing to amateurs for many years to come. Who would have thought the Safety Safari would come to this?
The second major motorsports foundation shift? The General of NASCAR, Bill France Jr.,died at the first of the month after a battle with cancer. During his 30-plus years at its helm, he marshaled his family’s business into its modern status as a sports marketing behemoth of motorsports – second only to Formula 1 worldwide, and second only to the National Football League stateside.
There will not be a power vacuum in NASCAR because of his passing, although his steady and incredibly firm overall guidance will be missed. It will take the team of leadership (Brian France, Mike Helton, Jim France, Lisa France-Kennedy) to do what he did as one person.
That is because no one person in NASCAR today had/has his hard-won, up-from-the-infield-to-the-boardroom experience stripes, and concentration of business sense and power. Well, maybe Roger Penske or Wally Parks – but Wally is already occupied. Remember though, that was exactly what was said about Bill Jr. when he took over for his much, much larger-than-life father, Bill Sr., to run the stock car show.
I wonder if the new NHRA Pro Racing has a person of Bill France Jr.’s business sense and personality strength to grow it to the levels now available to it as a for-profit company? HD Partners picked Tom Compton to come over from the NHRA Association side to be the President and CEO and member of the Board of NHRA Pro Racing; this “promotion” after 14 years in the NHRA and seven years at its head.
While the NHRA has grown during his tenure, some of that can be attributed to the rising tide that NASCAR has brought over the past 10--15 years to all U.S. motorsports. Compton now gets the opportunity to see if he can take the capitalistic marching orders of the new NHRA Pro Racing identity and follow the NASCAR distribution and merchandizing model; unfettered by any former NHRA non-profit attitude (spend all you make to keep our tax status). It’s certainly too soon to know, but some racers might be singing, “Meet the new boss, same as the old boss!”
How did NASCAR get so big? Television was the driving engine that took it too the masses (eyeballs), that brought the sponsors and their money, that built the tracks that France (and Penske, and Bruton Smith) built, that put people in the stands, that brought the sponsors, that brought the TV, etc. Bill Jr. hired the right people, and was personally involved in bringing, first the irregular TV electronic eye to NASCAR, and eventually to even mainstream weekly network TV. For someone like me who used to wait eagerly for snippets of stock cars between barrel jumping on ice segments programming on ABC’s Wide World of Sports on the weekend, today’s TV barrage of NASCAR Nation almost all the time is unbelievable. The NHRA isn’t quite that far back on the evolutionary TV scale as being stuck between barrel jumping, but it’s just out of the electronic media distribution ooze by being shown tape-delayed on ESPN2 cable.
It took NASCAR from 1979 to 2007 to get to its TV distribution to the level it is now – a mix now serviced by network and cable to households. NHRA Pro has to get its TV distribution increased – first on cable (on ESPN-1, at least), so it can bring in more sponsor partnerships. Pay-per-view, would be a logical next step given the DirecTV link that HD Partners has.
A smaller electronic audience than NASCAR will be a given for some time, but it is a highly “qualified” audience (younger, more involved and with buying power) than the typical NASCAR one, and that is a plus to sell to sponsors. It is also about 10-15 years ahead of NASCAR in the diversity of its audience and participants, and that is a lever that really should be used much more than it has in the past.
TV is but one electronic distribution lever available to NHRA Pro these days. The Internet (and portable devices using it) is another – and that revenue stream wasn’t available to Bill Jr. at the same point in his sport’s evolution. The Internet’s “scaling” ability (adding more viewers – worldwide) is superior to TV, but its revenue production, for now, is far behind TV. That is going to change in the next 5--10 years.
Can the NHRA bring the management expertise to exploit the Internet as a distribution and revenue source? Don’t know; hope so. I’m looking forward to the day when I can virtually tune and race my virtual car, live, any NHRA Pro racer in any class, at any national event, in 2.1 NitroSound (copyright G. Grissom 2007), on a flat screen about the size of a wall, or on a tablet notebook -- while Burk is text-messaging me to get my column in. I’ll probably have to fight my grandkids for this opportunity – but I hope not.