WILMETTE, Ill. — The sports media business model continues to evolve and money continues to flow. In this month’s Business of Speed, we investigate how the motorsports industry is approaching the future.
Teams are no longer simply focused on winning races and hoisting championship trophies. On the test track, behind the simulator screen, in the hauler, press conferences, sponsor summits, autograph signings and social events — all matter.
Racing entities are now full-fledged entertainment and media companies. Historically, the competition departments, engine and fab shops have been the most important. Now, the marketing, digital and research divisions are becoming key pieces to racing organizations.
Defining a strategic plan takes vision and each component plays a role. Racing’s goals are to increase competitiveness; engage with fans on and off the track; perform for industry stakeholders; deliver sustainability with efficient operations; collaborate through win-win relationships; and empower a diversified capable workforce. Successful integration of these strategies will lead to commercial success and partner satisfaction.
Sanctioning bodies and teams constantly refine their strategy. They use aggressive tactics aided by state-of-the-art technology. They realize drivers are important in executing the crew chief’s calls during the on-track game of chess. Schedules and formats are evaluated to mix it up. The race season is longer than most stick-and-ball sports, therefore motorsports organizations are selective about expansion.
In-house production has been a strength of key sanctioning bodies. They are constantly revolutionizing coverage with technical innovation. Each season brings unique camera placement and digital enhancements to elevate the viewing experience.
Utilizing multiple broadcast partners is not uncommon. The length of the race season along with the commitments to other leagues may make it necessary. Maintaining multiple media relationships can be complex, because partners who are deeply invested and aggressively promote are preferred.
NASCAR is negotiating its next set of media deals. The current contracts with FOX and NBC expire in 2024 and total $8.2 billion. These primarily covered the Cup Series, Xfinity Series and Craftsman Truck Series and averaged $820 million annually.
NASCAR recently entered a contract with The CW for the Xfinity Series that will begin in 2025. Over seven years, it will annually average about $115 million. The CW officials were looking for live content programming so their offer was higher than other bidders.
An announcement concerning contracts for the Cup Series and Truck Series Cup is expected in the near future. There are on-going discussions with the Race Team Alliance for a higher revenue split and increased purse and prize money. On a combined basis, all these deals will exceed prior ones.
NASCAR has placed a large amount of historical content from old races on its website. In addition, sanctioning body officials are reviewing the company’s console gaming licensing relationships
Sports broadcasters want to become all-in-one digital platforms. Data indicates that households are now watching more television on streaming than traditional cable. This is a significant milestone. Sports’ ability to garner huge live audiences remains unsurpassed, and cable is more profitable than streaming. The ability to extract higher subscription fees is flatlining.
The next phase will be all-in-one sports streaming platforms. Live video will be one of multiple services alongside betting, gaming, ecommerce and digital content.
Motorsports is well prepared for the next phase of the media landscape.
This story appeared in the August 30, 2023 edition of the SPEED SPORT Insider.