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The state of the sport of NASCAR racing? ISC execs weigh in on things for Wall Streeters

  A ragged season, with ups and downs...and questions. What does Wall Street think about NASCAR racing? (Photo: Getty Images for NASCAR)

   By Mike Mulhern


  FONTANA, Calif.

   So the sport of NASCAR racing is a buy?
   Undervalued at the moment, because of the sluggish U.S. economy?
   Well, one of the sport's benchmarks, the Daytona-based International Speedway Corp. (NASDAQ: ISCA) just held its third-quarter Wall Street conference call, to discuss the state of the sport.

   And the top line – revenue in -- is still pretty weak, which has executives cutting stuff right and left, on the way down to the bottom line.
   ISC officials haven't yet offered 'guidance' yet for 2011 and what they predict the sport will do. They say the 'real wildcard' is what happens to consumer confidence and how the unemployment picture goes. The middle class, NASCAR's traditional target audience, is the big question mark.
   However, whatever happens eventually to improve the crowds in the stands, one of the big questions right now is TV:
   Pointedly, NASCAR's TV ratings for the past year or so, particularly for the opening three races of the championship chase, have been down. Loudon was a 2.3., Dover a 2.4, and Kansas a 2.3 – all down from last year's ratings by about 25 percent.
   The sport would certainly like to be on stronger footing when it starts negotiating the next TV contract, in about a year or so.
   ISC's John Saunders, a key figure in Daytona and now interim boss at Chicagoland Speedway too, that key track just outside the Windy City, concedes this season NASCAR slipped on the way out of the gate, with that pothole in the Daytona 500, when it already had stiff competition from the Olympics and World Cup.
   "But there are some good things to point to as well," Saunders says. "The Sprint Cup series was the number one or the number two sport on television for 20 of the event weekends."

  The Daytona 500 had a great finish, and some good action....but that two-hour break for pothole repairs put the sport in a hole right at the start of the season (Photo: Getty Images for NASCAR)

   NASCAR's current major TV partners are Fox/Speed, ABC/ESPN and Turner/TNT.
   The ESPN component has been oddly off in ratings this year, and even company officials are curious as to why. The rival NFL is hot on the tube, in contrast.
   Fox executives have complained about NASCAR losing as much as 30 percent of the 18-34 male demographic. But NASCAR is of course prime content for Fox' Speed channel.
   NASCAR, through its Charlotte-based Media Group, has been working a number of other angles too, on Showtime, HBO, BET and the Discovery Channel, to try to recapture some of those 18-to-34s.
   ISC pulled in some $62 million during the third quarter from its current TV deals.
   So why exactly are NASCAR's TV ratings so markedly down from two or three years ago?
   Saunders: "The number of changes made last year -- such as start times, double-file restarts -- are going to take time to resonate with the fans.
   "NASCAR has invested significantly in their NASCAR media group to challenge this issue. And we don't have all of the data as to why the 18 to 34 demo is off. But I can assure you that they are well-positioned, and they are digging into it deeply....It is a key focus of NASCAR."

   But admissions revenues for the period were down, because of lower attendance. And corporate hospitality – in those big white tents at each track – continues to be down too.
   Ticket prices for Cup races at ICS tracks were cut a little more than 10 percent, to try to spur larger crowds. Those cuts were most prominent for the two Cup events at Michigan International Speedway, in June and August; that Detroit-area track is in what ISC calls "the highly-challenged Michigan market." With those cuts, ISC says it was able to keep attendance at those two events about on par with last year.
   To save more money, the ISC has dropped all Indy-car events for 2011, a move which is still being debated, considering rival promoter Speedway Motorsports is still running Indy-car events and it pushing to take the Indy-car tour finale to Las Vegas next fall. The finale has played at the ISC's Homestead-Miami track.

    Major league pothole repairs: $20 million repave for Daytona International Speedway. Week 14. (Photo: Daytona)

    A key indicator of how well things are going, typically, is advance ticket sales – the retention rate. And ISC says Cup sales were down about 14 percent for the quarter, about down about 15 percent for the year.
    Saunders said "our retention rate -- which is the total number of tickets purchased during the entire renewal and sales cycle for an event that were also purchased by the same accountholder during any sale cycle for the same event in the previous year -- is roughly at the same level as last year, in the low 50 percent range."
    However, on the positive side, Saunders said corporate sponsorship "remains robust, with continued demand for our events from corporate America."
    He says ISC sold "our entire available inventory" for 2010 for Cup, Nationwide and Indy-car races. "For 2011 we have six entitlements either open or not announced for the 21 Sprint Cup events, and six entitlements either open or not yet announced for the 15 Nationwide events."
   And the pricing? "We are experiencing encouraging sign in pricing with our corporate partners," Saunders said. "Illustrative of this is that our NASCAR race entitlements have maintained their value year-over-year."


  Kevin Harvick had the car to beat here in the spring at California's Auto Club Speedway, on the outskirts of Los Angeles. But he says he beat himself, tagging the wall while impatiently chasing Jimmie Johnson. Will a Johnson-Harvick rematch attract a big crowd at this 92,000-seat arena? This is one of the key markets for NASCAR, and yet things have been off lately. (Photo: Getty Images for NASCAR)


Saunders seems like a stiff

Saunders seems like a stiff suit and speaks in corporate lingo. Willing to bet the figures he threw out for this interview aren't necessarily accurate. It's probably worse than he is willing to admit to shareholders.

Let's see how he feels after Fontana this weekend !

Well, I'm not Wall Streeter,

Well, I'm not Wall Streeter, and my 401k is about a 199k now....but from a technical standpoint it looks to me like ISCA stock is, in a long-term picture, undervalued right now, considering the assets it has and the monopoly is has.
Now the deal that worries me is, while NASCAR has some good action this season, new rules to provoke that, the sanctioning body -- and the car makers themselves, who have a sizeable say, and stake, in all this -- refuses to address some major concerns. like single-file racing at California Speedway, and a tour schedule that doesnt put the hottest tracks in the playoffs, and a COT that has to fit so many body templates that it's impossible to police (re Clint Bowyer) at the track, and a COT that bear no relationship to anything out on the street any more....not to mention the absurd length of ESPN's Sunday commercial packages, and the seeming inability to quickly come back live when something happens on the track. How many times during the K400 was ESPN in commerical break when things were happening?
Remember when 'the customer is always right?' Well, at lot of NASCAR's customers appear to have left the building.
Deer in the headlights?

Yet another potential change

Yet another potential change to the "Chase" is being discussed. This will again be another nail in the coffin. Fans do not care for the chase and dislike constant change. NASCAR needs some stability. The slide in attendence and TV viewership is attributable to much more than "the economy"

If it were the economy to blame, then common sense says TV viewership would rise as fans can't afford travel and tickets. But ratings are plumetting - fans are losing interest in droves and NASCAR and ISC can't / won't listen to their customers. There is extreme cause for concern regarding the short and long term future of the sport.

the chase isn't working,

the chase isn't working, that's the plain and simple of it. and why are we making so much of this championship anyway? shouldn't we start thinking about that. how do we market 'the champion?' who makes money off 'the champion'? this sport should be about winning races and leading laps, and the championship should follow from that. right now it's all about the championship...and not about winning the championship but rather not losing the championship. it's all backwards imho

What a bunch of hooey that

What a bunch of hooey that all is. The combination of a poor product on the track, the IROC car and cookie cutter tracks, The CHASE (the majority of fans hate it) and really terrible TV broadcasts by Fox and ESPN is the reason for falling ratings.

I thought it was disingenous that ESPN is trying to blame the 1 p.m start time for the fall off in viewers. NO, that's NOT it. With the chase scripts overriding any racing that may actually take place, why bother to watch?

ISC is drowning in its own

ISC is drowning in its own bad managment's decisions. Most fans don't like the chase, making more gimmicky changes just makes it more apparent that its a joke, rather than a true measure of a champion. Johnson, the IROC car, boring race tracks and boring races, combined with terrible TV coverage is the reason why fans have tuned out and stopped going to the track.

It's not the start times that ESPN is trying to blame, its the lousy coverage.

Just give Johnson the trophy again this year and we can all get the next 6 weekends back/

The Nationwide Race had

The Nationwide Race had virtually nobody in the stands. 15,000 max (if even that many)

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