The Fox Hole

After negotiations ended this past Monday between NASCAR and FOX TV, the television station may consider ducking for cover as fans are left hanging with many questions. When Fox TV signed contracts on Monday giving it the right to air the Sprint Cup Races through year 2022, it failed to give fans and consumers the lowdown on how it will go about televising the races starting in 2013, with the first races during Speed Weeks at Daytona. Their new network, Fox Sports One, will be the rebranded name of the SPEED network, but will it provide the same satisfaction for fans?

In relation to the benefits for the motor sports industry, this deal with FOX TV will boost NASCAR’s income, as well as the income for tracks and teams. This income, in turn, will help maintain lower ticket prices for fans and increase race winnings for teams, which possibly reduces the level of corporate sponsorship. However, this scenario may be at cost to the fans watching at home. Not only will Fox have rights to air the first 13 Sprint Cup races and the entire Camping World Truck Series, but it also gets the digital rights for online streaming yet it is unclear whether fans will have to pay for online access. With FOX also announcing that the new deal will take some of Sprint Cup races off network television, internet access for fans will be even more crucial than before.

The next big issue for fans is the question of how FOX will go about televising the practices and qualifiers. With no official word on the status of televising these events, it leaves fans with the possibility of not being able to watch at all. Even though Fox could air those events on its subordinate stations like Fuel TV or FX, the fans at home will not be pleased having to watch multiple channels to get their fix, especially when they could previously watch everything on the SPEED network.

The biggest issue comes from the clash between what commercial sponsors want and what the fans want. Considering that Fox TV is such a highly rated network, commercial sponsors will be fighting to place their ads during as many NASCAR events as possible. Unfortunately for fans, this means more interruptions that could prevent viewers from seeing their favorite racer cross the finish line or catching the wreck they’ve been waiting for the whole race to see. With the amount of money spent on ads by sponsors, the proposal for a split screen for commercials will not go over lightly. In the end, Fox has a lot of people to please, and it’s a sure thing that not everyone will walk away happy. JH

THE COST TALLY OF THE FINISH AT TALLADEGA

The finish of this past weekend’s Sprint Cup race at Talladega was mayhem. The 25-car pileup, which resulted from Tony Stewart’s careless maneuvers to try to block his way to a win, was a spectacle to the fans on the front stretch but could have been deadly for all of the drivers involved.
The Richmond Times Dispatch quotes Dale Earnhardt, Jr. as saying, “If this is what we did every week, I wouldn’t be doing it, I’ll just put it to you that way. If this was how we raced every week, I’d find another job… It’s really not racing. It’s a little disappointing. It cost a lot of money right there. If this is how we are going to continue to race and nothing is going to change, how about NASCAR build the cars? It’ll save us a lot of money.”
While watching the final turns into the front stretch and the pileup occur, I could only imagine how frustrated and outraged many teams would be that their cars would have to be dragged off the track as a twisted heap of metal.
I am curious to know, in a dollar amount, how much the teams could salvage from their car given the severity of the damage. I know that the price in salvaged parts would be nowhere close to the total cost of running the race, but each team must be concerned with getting the maximum amount of money out of its investment. Talk about a risky investment.
With increasing costs in racing, saving money has to be at the top of every team’s “To-Do List”. The point that Jr. made about having NASCAR build all the cars brings up a great point that may be heavily considered in the near future.
One may be surprised how much money could be saved by individual teams if NASCAR had a factory that churned out a pre-built models and then distributed them to each team to finish off. I am not sure if this is a concept that has been considered before but it would appear to be fair and cost effective. If NASCAR could save each team $100,000 a week then that would add up to a hefty chunk of change at the end of the 36-week race season.
At this point in time the money invested in each car may not be a big deal to the larger teams such as Hendrick Motorsports or Joe Gibbs Racing, but to many of the smaller teams it could be a huge step in helping reduce costs. If teams were able to reduce costs each week, possibly new opportunities would be opened up for sponsors. NASCAR may not like the idea of having to build the cars for each team. Many teams may be completely against the concept, but something will have to change in the future. Something must be done when a major figure head of the sport openly says that if something does not change, he plans to find another job. SP

DEI-Ginn Hookup

So is this news or what? Nah, probably more of the ‘so what?’ factor as a struggling team does what we see in my Strategy class all the time, namely, merger/sell-out in order to survive. After all, you can’t win races if you don’t exist (of course you don’t have massive cash outflows either if you are in ‘vaporland’).

So this hits the airwaves but I’m not surprised — not that I have an inside pipeline to either operation, rather this is IMO a common business practice. Now the real question is what the impact will be for all the other folks (you know, those behind-the-scenes folks who don’t get much press who work for these teams) involved.

Joe Menzer writing on NASCAR.com even opined that:

“Ginn had an escape plan at the ready. For how long, who knows? Maybe this was his plan all along — to come in, fix up a race operation like it was an old rental property in need of some curb-appeal repair, and flip it for a profit like a real-estate developer does.”

Ooh, strong words! Does this mean that NASCAR teams actually have real economic value? Yes, my friends it does. And this is where another facet of capitalism is reflected in this sport. You are not bound by law to stay any longer than you have a written promise to do so and if you see an entrepreneurial opportunity then you are free to ‘go for it’ .

In the end what this really signals is that it is getting just too expensive to remain a “B” (or C) level team because cash talks and everyone else walks, and it takes mucho cash to play this game.

So are we becoming the domestic version of F1 racing? I hope not…

But hey, be of good cheer: no dogs or gambling debts are involved and we are not in need of “B” samples.

That’s the view from here

Michael

COMMIT THE CRIME; DO THE TIME!

Well, what goes around, comes around.

Can you believe that Hendrick is “disappointed” by NASCAR’s decision to fine Gordon and Johnson and suspend Letarte and Knaus? Letarte and Knaus get to work in the shop during the six-race suspension and even communicate during races via cell
phone and text messages!

Wow, do you remember “detention” in high school? — go to class, do extracurricular activities, practice sports.

And Hendrick is considering an appeal? And NASCAR doesn’t play
favorites?

You be the judge!

Jon

VISIONS OF CHAMPIONSHIPS DANCED IN THEIR HEAD

I’m quite certain that fans of Dale Jr. slept very well last night, with visions of championships he is SURE to win driving for Hendrick Motorsports. In fact, I wish him well. I just can’t wait to see Jimmy or Jeff pull over to let him lead a lap!

But here’s a different version of this current situation. A couple of years ago, Kurt Busch abruptly left Roush (Fenway) and moved on to Penske. Jack-in-the-Hat was so infuriated he changed the number of the car the following season. Last year, Dale Jarrett left RYR to go with Michael Waltrip. There were hues and cries about driver loyalty. Well, Kyle (I’m not a really big fan) had a contract through 2008 but Rick Hendrick decided he could drop the contract. I’m not in the “inner circle” so there probably was a clause that allowed this. But what about owner loyalty to a driver?

Keep in mind the following: Kyle has one win this season to Dale’s zip; Kyle has three top 5 and seven top 10 finishes while Dale has one top 5 and five top 10 finishes; Kyle is 10th in points while Dale is 14th; and Kyle has four Cup wins since 2005 to Dale’s two. Yes, Hendrick Motorsports will be a good move for Dale. But what about Kyle? What’s he to do?

Well, I’m a big fan of “Don’t get angry, get even.” So, maybe Kyle will do the proverbial “spit in your eye” and go to DEI.

Just a thought.

Jon