NASCAR ticket revenue in sharp decline

Rock Hill HeraldJuly 9, 2012 

DAYTONA BEACH, FLA. — The green flag dropped on Saturday night’s Coke Zero 400 NASCAR race with all 57,000 seats in Daytona International Speedway’s backstretch grandstands empty.

With decreased demand, NASCAR’s most famous track never offered those seats for sale, in stark contrast to the days when sellouts were routine at Daytona and most other tracks on racing’s premier Sprint Cup series.

NASCAR, which has a big footprint in the Charlotte area and was once viewed as the country’s fastest-growing pro sport, continues to grapple with perhaps its most troubling ongoing challenge: declining ticket sales.

Actual NASCAR attendance figures are difficult to come by, but according to securities filings, ticket sales revenue fell by 38 percent over the past five years at its three publicly traded companies, which host 35 of the 38 race weekends – 36 points races and two special events.

“Things aren’t perfect and easy, no,” NASCAR Chairman Brian France said Friday. “But a lot of people would like to have our problems.”

Securities filings for NASCAR’s track owners for 2006 through 2011 show:

• Charlotte’s Speedway Motorsports Inc. has lost more than a quarter of its admission revenue, falling to $130 million.

• NASCAR’s largest track operator, Daytona Beach-based International Speedway Corp., has lost more than 40 percent of its ticket revenue, falling to $144 million. Earlier this week, ISC reported an increase in admission revenue over the first six months this year (from $66 million last year to $69.9 million), but that included an additional race (at Kansas), moved from later in the season.

• Dover Motorsports Inc., which runs tracks in Delaware (including Dover International Speedway) and Nashville, Tenn., has been hit the hardest, with admission revenue falling nearly 60 percent, to $13.6 million last year.

Not all of the figures reported are entirely NASCAR revenue, but the annual reports note that the declines are almost all due to NASCAR events.

Figures for a NASCAR race at Indianapolis Motor Speedway and two at Pocono (Pa.) Raceway, both privately held, are not available.

The main culprit for declining ticket revenues, said France, continues to be the economy, because attending a NASCAR race often requires more travel and a longer stay than attending other sporting events.

“Given the way we’re structured, it’s had a greater effect on us,” France said.

Television ratings, which are roughly flat from 2010 to 2011, show that the sport remains popular, even if fewer fans come to the track.

Track operators, in an attempt to bring fans to their speedways, have lowered prices and offered promotions, worked to improve the fan experience at the track and marketed the sport aggressively.

And NASCAR, which is based in Daytona Beach, is testing plans to draw Hispanic fans and appeal to younger people and organizing for a five-year plan set to launch in 2013 to better market the sport.

NASCAR isn’t the only pro sport that has experienced attendance declines in recent years. Major League Baseball, the NFL and the NBA all release attendance figures, although they may use different methods to arrive at the numbers. Based on the numbers they provide, all have seen single-digit declines, much more modest than NASCAR.

Even the immensely popular NFL recently made a concession to some of its attendance problems, relaxing a longstanding policy requiring home teams to sell out or face a local television blackout. Beginning this coming season, only 85 percent of tickets will need to be sold for a game to avoid being blacked out.

Tweaking the formula

NASCAR’s racetrack companies largely blame the slowdown in consumer spending for the lack of sales. Admission revenues peaked between 2006 and 2008 and have fallen every year since. The companies say ticket sales will continue to struggle as long as the economy does.

“We think the pricing this year will stay consistent with last year,” SMI president Marcus Smith told Charlotte’s Sports Business Journal in May. “And we’ve held pricing firm for the last few years. We’ve done discounts for folks, the four-packs and the six-packs – maybe food and beverage is included in the ticket. It’s not the model that you would look to in the short term because it has resulted in some lower admission revenue. But it’s the right thing long term for our fan base because more and more fans are able to attend and continue their tradition.”

Charlotte has been creative in how it deals with the problem. Several years ago, the track removed a large block of seats, replacing them with a luxury motor home park.

“That can be a little misleading,” said France. “They have higher ticket pricing with that, but there are fewer people. But there’s more money from it.”

Tracks have tried other methods in attempts to at least conceal the attendance problems. Charlotte and Dover, for example, are among those that have placed tarps – some with advertising logos or an American flag – over large expanses of their grandstands.

“People do different things,” said France. “How they approach things, that’s the track’s prerogative.”

NASCAR is making moves of its own, with numerous hires aimed at improving the sport’s brand. The sanctioning body is testing efforts to draw Hispanic fans, including signs at some tracks in Spanish to make the sport more accessible. It is also working to appeal to people in the 18-to-34 age group and organizing a five-year plan, which is set to launch in 2013 to better market the sport.

Regardless, France said, the sport and its track owners will take a long-term view on solving the attendance problem.

“(NASCAR) is 60 years old and we’ve been through a lot of things,” France said. “But this was pretty dramatic, from an economy standpoint.”

Observer researcher Maria David and staff writers Kelly Mae Ross and Michael Persinger contributed.

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