The economics of auto racing

There has been so much talk lately about or economy and how it effects different  people and different business sectors. I watched a documentary last week on CNBC about how NASCAR is feeling the effects of our recession or economic slump (whatever you want to call it) and I started to wonder if NASCAR racing is really feeling the “effects” or does its slide simply coincide with the economic woes of the rest of the nation. NASCAR is reporting a slide in attendance figures and mainly saying the reason for this is because consumers don’t want to or can’t spend the extra money to go see races. But, weren’t attendance figures starting to slide several years ago during our countries “wonder years”. And why do you think this is?

Auto racing consumers or fans?

Let’s look at it from the perspective of the average consumer; and I’m not talking about your die hard race fans here, I’m talking about the fans who run to their car with even the threat of in climate weather, or sit in the stands and ask why the cars have to be so loud. These fans, because of the great television coverage, can watch detailed media coverage of everything that is going on on the track (practice, qualifying, and race) as well as way too much behind the scenes information. Do you want to know what your favorite driver had for breakfast? Stay tuned and Wendy will let you know after the break. The average fan can sit on the couch eating the biggest plate of perfectly prepared nachos while drinking as much reasonably priced beer as the stomach can handle; pass out, then wake up for the last, “best” fifty laps of the race. I’m a pretty die hard race fan and the above sounds pretty good to me.

Plus, there are so many new entertainment options open to people now. There is, and always was, only so many entertainment dollars to go around. As more entertainment venues are getting created others are going into decline. Now I’m not saying that racing is going to go extinct, but I think just like our national economy big time racing is in a bubble. Multi-million dollar teams signing drivers to multi-million dollar contracts, something’s got to give.

Grass roots racing

Although, there could be something else going on here. It seems to me local grass roots racing is sliding more and more to the club style racing mentality. Tracks pack the pits (back gate) with as many race cars as possible to hopefully pay the purse and expenses for the night of racing. I don’t see as much promotion or attention to getting fans in the stands like there was years ago. The local race tracks, with attendance being low, seem to be surviving out of the back gate without even caring if there are any fans in the stands. There is such an abundance of cars, tracks seem to be open to satisfy the competitive nature of the drivers, not the entertainment of fans in the stands. If a track can put a good crowd in the stands, great. If no one shows, at least they can cover expenses.

So what about NASCAR? It’s reported that because of the revenue sharing plan for the TV rights, NASCAR tracks are making huge amounts of money off of the television contract with NASCAR. Could the races in the future be held mainly for the television audience alone? With the lack of corporate money as sponsorship, could we see the multimillion dollar teams go away?; multimillion dollar iconic drivers reduced to a simple average living with a will race just for the trophy attitude?; the ‘good old boy’s’ way the sport used to be?

Ah;    maybe it is just a reflection of what’s going on in this economy and everything will get back to normal once it picks up.

I hope so.

Til next time.

Kevin