NASCAR Doesn't Need Reluctant Television Partners Right Now
A story in the Sports Business Daily reports that ESPN and TNT are looking to end their NASCAR coverage in 2013 instead of next year as previously agreed. With ten year contracts already signed with both Fox and NBC, the sanctioning body should do everything it can to accommodate their current broadcast partners and move on to their future ones. Neither the networks nor the sport benefit from having the races broadcast by a network not fully committed to the future of NASCAR.
Original Sports Business Daily article
- ESPN, Turner in talks to exit NASCAR early
ESPN and Turner Sports are talking with NASCAR about getting out of their broadcast rights agreement a year early, a move that could allow Fox Sports and NBC Sports Group to become the sport’s broadcasters next year.
Publicly, all is well with both ESPN and TNT. While they weren't willing to pay the steep rights fee increases NBC agreed to, ESPN and TNT both spoke to their commitment to maintain their current NASCAR coverage through the end of the 2014 season. Which makes sense; the contracts in place have the networks paying NASCAR hundreds of millions of dollars from now until then and publicly bashing the sport will make recouping those costs even more difficult. They're already facing difficulties in lining up advertising for next season's schedule in large part due to the lame duck status. Undercutting those negotiations by announcing their desire to trash the contract will make those sales virtually impossible.
Privately, however, the two departing networks seem more than ready to move on from NASCAR. TNT only has six races on its schedule and saw awful ratings during their summer series this year. Fans detested the oversized commercial bar TNT utilized during its coverage and the heavy commercial rotation; the network had the highest average commercial rate of any NASCAR partner over the past two years at 25.9%. By contrast, in 2012 ESPN averaged 23.6% (and 18% when looking at side-by-side coverage) and Fox sat at 23.3%. The numbers for 2013 similarly show that no network cut to commercial as often as TNT and the fans responded by clicking their remotes.
Check out other races from Daytona on DVD
ESPN has its own issues in terms of NASCAR coverage. The network currently carries the entire Nationwide schedule in addition to the final 17 races of the Sprint Cup schedule. With stiff competition coming from the new Fox Sports 1 network, ESPN cannot afford to provide a substandard broadcast product. Moreover, this isn't the first time that ESPN and NASCAR have parted ways; it's entirely possible that the two will do business again somewhere down the line. Between broadcast reputation and future business possibilities, ESPN isn't going to put out a single camera broadcast with a skeleton crew on a weekly basis.
Yet the temptation to cut costs, especially those races where ESPN's trucks show up to cover just a single Nationwide event, will loom large. Ratings for a Nationwide race in March from Las Vegas do not justify the costs to broadcast the event. This is particularly true given the fact that every dollar ESPN spends to build up NASCAR now will go towards another network's bottom line come the following season. That next contract is also better structured to help NASCAR's television partners defray the costs of broadcasting as both Nationwide and Sprint Cup schedules will be split between Fox and NBC. This split ensures that production costs will likewise be split between two races most weekends.
If NASCAR plays hardball with ESPN and TNT the consequences for next season could be brutal. ESPN is billed as the “World Wide Leader in Sports” and their overall ratings justify that claim. They have a sports megaphone that is able to drive viewers towards your product- or away from it. Think that ESPN doesn't provide enough NASCAR coverage now? Imagine what would happen should they try to stiff ESPN on this deal. And the network could easily fill that motorsports void by placing greater emphasis on other forms of racing. After all, the company still will have the rights to several IndyCar events per year including the crown jewel Indianapolis 500. Why not promote a series that's working with them over the one working against them?
Auto racing is a difficult sport to cover under any circumstances and a lame duck status makes it nearly an impossible one. Action can take place at any point on the racing surface and sometimes off of it. You need a wide range of camera to capture the action, multiple reporters on pit road to get critical information, and skilled people in the production trucks to beam out a coherent product. All of those items cost money. Should the networks look to cut racing costs those are the areas they will do it. Three pit road reporters? Cut it to one. Someone monitoring the race scanners for good material? Cut that, just take a live snippet here and there instead. Cut the number of cameras (and camera crews) in half; most of the race comes from a handful of shots anyway. Who cares if a major incident is missed? It's not like they're coming back next year.
NASCAR cannot afford to have disinterested broadcast partners with little invested in the future. The sport is only now beginning to recover from the economic meltdown and recession several years ago; overall attendance is inching up at most tracks and TV ratings (for the most part) have stabilized after a multi-year free fall. An engaged broadcast partner doing everything possible to put out a quality TV race product is critical to that recovery. Fans at home have high expectations of a race broadcast; missing a wreck or re-start is considered an inexcusable error no matter how common it was just a decade ago.
NBC and Fox literally have billions of dollars invested in the future of NASCAR. It's in their financial bottom line for NASCAR to grow and prosper in the American sports landscape. More fans equal higher ratings and better advertising revenue. Live sports programming offers one of the few products that people tend to watch as it happens instead of on DVR. That means sponsors will pay more for the time. NASCAR also traditionally offers an advertiser-friendly demographic despite recent setbacks. NBC also desperately needs eyeballs on its struggling NBC Sports Network. Bicycle races and hockey games simply do not draw the same size of audience that NASCAR does. The contract can't start soon enough for them.
While the original article seems to indicate the complex negotiations between the four parties (Fox, TNT, ESPN, NBC) will be difficult this would seem to be a fairly simple deal to make. Fox is getting more races starting in 2015; the launch of Fox Sports 1 would seem to provide an easy landing spot particularly given the time of year those races fall (the only other sport in season would be baseball). NBC's interest is obvious. And while ESPN and TNT will make noise about wanting to be financially compensated for leaving, the fact is that their financial benefit will come in ending the contract. The bean counters in Bristol, CT can add that up as easily as anyone else. Their only leverage here comes in how the network covers NASCAR should they be held up for something now.
The ending here is much like that of a married couple's divorce. Both sides entered with the best of intentions and efforts but it just isn't going to work out- mainly because both think they'd be happier elsewhere. Naturally there is some bad blood on both sides about the relationship ending and it will be hard to keep those ill feelings private forever. Why delay the inevitable? Why have both sides continuing to live in the same house when the papers are filed and the court date set?
No, this is a situation where the right thing to do ethically is also the right thing to do financially. No one benefits from keeping NASCAR where it isn't wanted- particularly when those races are wanted elsewhere. The sport loses momentum and interest thanks to lesser coverage. The networks lose by putting a product on air they don't believe in. And as always, the people caught in the middle are the ones who have no ability to change the end result; the fans. The time has come to set aside pride and reach a deal that makes sense for everyone involved.