Tuesday, December 20, 2011

NASCAR Discovers The Internet

Since 2007 we have been taking aim at one of the worst media contracts in all of professional sports. Over a decade ago, NASCAR sold the total online (digital) rights of the entire sport to Atlanta-based Turner Sports.

Originally part of the NASCAR mindset to maximize profit from the sale of exclusive content, it quickly became apparent that having a third party in charge of the sport's Internet presence was a mistake. Over the past few years, that mistake has turned into a disaster.

Online technology has become a key element for the other professional sports in North America. Recently, the basic offerings of website content and live video have been bolstered by the rapid growth of social media and the technology that comes with it. Digital strategy can now make or break a sport.

Sports Business Journal reporters Tripp Mickle and Jon Ourand broke a story this week that NASCAR had done the unthinkable. Long since governed by the motto that NASCAR cashes checks but never writes them, the sanctioning body seems to be ready to dip into the checking account and buy back its own online rights from Turner.

The SBJ reporters offer that a deal to end the current agreement two years early and have NASCAR back in charge by the 2013 season would wind up costing tens of millions of dollars. Ultimately, it has seemed all along that cash is king for Turner.

While the obvious starting point is the movement of the NASCAR.com website operations to NASCAR's headquarters in Charlotte, that is only the tip of the digital iceberg. The TV networks that will be negotiating in 2012 for rights to races beginning in 2015 need assurance that online streaming of that content is in play.

The current TV deal is NASCAR's cash cow with over four billion dollars changing hands in the current eight year agreement. That money is before any TV network even rolls a production truck, puts out one camera or hires one announcer. Four billion is just for the opportunity to show the races.

Hardcore fans know the real problems. NASCAR.com has been a mess for years and allowed websites like Jayski.com to thrive amid the continuing confusion and constant redesigns being done by Turner. The current version of NASCAR.com is perhaps the worst yet.

NASCAR itself has never been able to stream live race telecasts, radio content or video of any kind. NASCAR's current TV partners have also been restricted in digital applications, even on the websites of the very networks who combined for the current big money TV deal.

This is the right move at the right time and it makes sense for all the parties involved. The big issue on the table is the damage that has already been done. Even as the Sprint commercials on TV suggest that live video of races is available, it has never been. Younger sports fans have never been able to access NASCAR content like the other pro sports.

Secondary to a deal like this is the ability of NASCAR to branch out and address issues that have also been on hold for years. SiriusXM's NASCAR channel has a tiny audience right now of hardcore fans who listen on satellite receivers of all types. NASCAR in charge would clear the way for online streaming to smart phones, tablets and laptops.

While NASCAR's history might be on display at the Hall of Fame, it cannot be viewed anywhere online. Controlling digital rights would allow entire programs to be made available to fans via websites like Hulu, YouTube and NASCAR.com.

"30 Minutes You'll Never Get Back" is a NASCAR.com webcast featuring Rutledge Wood and Kyle Petty on Sprint Cup Series weekends from the track. These two knuckleheads act like fools, talk to NASCAR personalities and generally try to get away with everything they cannot on TV. Fans love it.

Originating live video from the tracks can be as simple as a garage camera with sound or a full-scale production of preview, review or interview shows. Establishing an online production department within the NASCAR Media Group is a clear priority.

Scott Ackerson, a FOX Sports veteran executive from Los Angeles, has been named the interim head of SPEED. One of Ackerson's roles will be to oversee the continued integration of SPEED's TV programs online via the NASCAR.com website.

SPEED is NASCAR's largest TV production partner and has taken the lead over the last few years in expanding the programs being offered in the digital space. Giving fans the ability to keep up with practice, qualifying and the news programs like NASCAR Live via smart phone, tablet or laptop is so very important right now.

Once NASCAR is in charge of online offerings, expect SPEED to play a key role in advancing the integration of existing TV programs onto the Internet. Hopefully, Ackerson will see the opportunity for a strategic partnership that will bring benefits to both SPEED and NASCAR for years to come.

Finally, control of NASCAR's social media would revert back to the sanctioning body. It's been tough to deal with Turner controlling Facebook and Twitter content for the sport. The tension between Atlanta and Charlotte on those issues could be cut with a knife.

The SBJ reporters got a no comment from both Turner and NASCAR, but suggested the deal would be done and announced sooner than later. Thanks to Mickle and Ourand for some solid reporting on this issue. The original story was posted on the subscriber-only Sports Business Daily website. If a legal link becomes available to the full article, it will be added to this post.

We want your comments on NASCAR's online situation. To add your opinion on this topic, just click on the comments button below. Thank you for taking the time to stop by The Daly Planet.


Anonymous said...

Very insightful and something I was not aware of. Putting this. In the hands of #NASCAR is a good idea, but at the same time, I hope steaming races live, like race buddy will remain free for those that don't have access to cable or can't afford it. As thrown out there on XM talk of a #NASCAR channel like the NFL, MLB Etc would be the ultimate. Hope it pans out.

larry said...

NASCAR does nothing for free. We will pay through the nose. They will tease us with some freebies then try to suck us dry.

Sorry for my cynicism.

Anonymous said...

Wow, I would have never thought bf would part with his money. I cannot wait to see how this plays out. MC

Anonymous said...

Larry above, beat me to it.

If they charge for it, they won't be getting any of my $$s.

Vicky D said...

Larry I agree with you I have a lot of cynicism regarding Nascar! Plus I take everything they say with a grain of salt. And my word verification is lies!

MRM4 said...

Sounds good so far. But as others have said, NASCAR will probably have their hand out looking to make up that money they'll be paying to Turner.

KudzuCarl said...

Interesting (typical?) that there isn't anything about this on NASCAR.com this morning.

Fed UP said...

Chances are, it IS going to cost you to view the online content. Nascar is a business afterall. However, it may not be a direct cost. Think of how Nascar could help its smaller teams with sponsorship by saying that not only do we have tv and radio, we have internet available to showcase your product. It may make the difference between a midlevel company saying no and yes to sponsoring a team. I'm sure that there will probably be more surveys out there, but that's how the companies can judge how effective its advertising is.
Its about time that Nascar buys back its rights. It takes money to make money.

Ziggy said...

I agree with Larry 100%.

Got to think the next TV deal will be less than 500M per year.

GinaV24 said...

Well, I'll believe it when I see it and like Larry, I believe that NASCAR will do its best to recoup all its money from the fans.

What I'm willing to pay will depend on the product. It bettr be more than cartoon cars racing around a pretend track.

thanks for the info, JD, it will be interesting to watch. Maybe the yahoos in Daytona are listening at least a little.

Russ said...

Several days ago I got flamed on this very issue. I dared to suggest that a Nascar Channel on TV was not as important as webcasts, and the social media, Facebook and Twitter.

If Nascar recognizes it's importance going forward, and is willing to shell out millions rather than letting the current agreement expire than there must be something to it.

Wonder what those people who were so quick to say that TV was all that was wanted or needed are saying in response to this news.

17972 B. C. said...

This is a good move by NASCAR for sure, and no doubt it will cost the fans some cash,but for the fans who live in the NASCAR only world, no other pro sport gives it away for free either. NFL right now will give week 17 and the playoffs feed for $9.99. NHL charges $19.99 for an app that allows radio feeds, live tv cut ins, but not live feeds, and access to 15 minute game tape post game, $160.00 for video for a season.I paid i believe $9.99 for the MLB app that included radio feeds for the season, quite reasonable i thought.The video app was $150.00 i think. So if you expect all of a sudden free unlimited live streaming of everything NASCAR, you might be a bit disappointed.The pricing will be the difference between money hungry NASCAR and fan friendly NASCAR.
And the fact that Sprint is the series sponsor could have implications as to who gets what and at what cost. Bottom line is this is a big plus, but have realistic expectations people.

KoHoSo said...

I sort of feel the same way Larry does as I remember the day years ago when NASCAR put driver radio streams behind a pay-wall when they had previously been free. Considering little has been done by NASCAR to help fans during The Great Recession, I fear they will use this as a money grab.

Possibly the best thing to come out of this will be something fairly simple -- a truly sensible redesign of the NASCAR.com website. That thing has been a joke since the late 1990s and they've never gotten it right. Other sports that used to be equally bad finally got caught up (the NHL and IndyCar come to mind) but NASCAR still lags behind both in content and especially ease of finding information. As somebody that has done a little Web design, I swear that the Turner folks make it look like somebody ate a coding textbook and then just slapped up whatever they barfed back up. :-s

Buschseries61 said...

Never thought I'd see the day! I'd understand reasonable pricing for tv/radio streaming. Every sport charges for it. But the alternative of paying for it is the current nothing on NASCAR.com right now. With the current tv contract, the best Turner could provide during the races was cartoon cars on RaceView and moving bubbles on TrackPass.

The Mad Man said...

I agree with Larry. I also agree with Russ.

Sure it would be nice to have a lot more internet content, but the internet isn't the end all to NASCAR's problems. In order to solve NASCAR's problems, you need to start with a clean slate which means replacing just about all the honchos NASCAR currently has and bringing in somebody who is smart enough to know how to handle both the internet & television products.

Right now, the France's are trying to buy up all the ISC stock they don't control. That smells of desperation. Now, they want all their digital rights and products. I may be wrong but to me this sounds like they're trying to get all their eggs in one basket in order to make a sale of NASCAR, ISC, or both.

NASCAR's TV ratings don't really justify any major network committing to a NASCAR channel. And if what the networks have said in the past about the difficulty of selling commerical time is true, that makes the idea of a dedicated NASCAR channel implausible because unless they run infomercials all night, the odds of normal mainstream advertisers coming onboard are extremely slim. Especially companies who have had past dealings with the France family.

And just what all would be on a NASCAR only channel? We'd get pretty much what we've got now on Speed, Fox, & BSPN. Then what? NASCAR Media Group isn't going to want to show races from the past as fans would be demanding to see the same sort of racing today. Do they air "The Best of Brian France's Speeches" to fill time slots? The True History of NASCAR? Racing movies like "Last American Hero", "Stroker Ace", and "White Lightnin'"?

While NASCAR tends to follow the lead of the WWE in a lot of aspsects because they're both after the same demographic groups, I don't see NASCAR having their own dedicated network like the one the WWE will launch in January 2012. And I don't see NASCAR making much of an improvement on their own web site. They might be able to post things that are currently being sent out to the media from the NASCAR PR site, but then what? They're going to have a tough time competing with Jayski because they won't post any articles which cast even the slightest doubt on what's happening on the track or in the garage. They won't post anything which questions the leadership or officiating. So we end up with a plain vanilla product that is little more than an extension of NASCAR's PR Department which is sort of what NASCAR.com is currently.

Dot said...

I'm with the others about bf/nascar charging fans to recoup their losses. This wouldn't be happening if there wasn't money to be made.

Anonymous said...

I have not been to Nascar.com for years,poor design.To many other outlets that provide good coverage.

Bobby, who believes NASCAR is rudderless said...

The Super Bowl will be available online and on smartphones. Match that, NASCAR!

OSBORNK said...

I think NASCAR is trying to buy back the online rights to make the upcoming bidding for the rights to broadcast races more attractive. The selling of the online rights lowered the TV broadcast value of NASCAR. The tens of millions of dollars to buy the rights is small compared to the increase in the value in the upcoming bidding "war".

uncredentialed said...

This is definitely the way to go. Major League Baseball has the best model and they make a killing off of it.

There are a couple issues here though.

#1 Editorial control - NASCAR has been notorious for the intimidation & games they've played with the independent press over the years. I have no confidence that they won't turn NASCAR.com into a glorified PR outlet.

#2 Mobile - Sprint is still the big elephant in the room. The key features of any mobile app would be live telemetry & live race weekend streaming content. I just don't see Sprint giving up exclusivity in this area.

Daly Planet Editor said...

Editorial content has been a big topic of discussion over on the TDP blog page.

Monte Dutton has said he believes it is the key issue. Marketing guys in charge of the news just does not usually work out well.


Anonymous said...

Russ, I don't believe anyone in that discussion said TV was *more* important. They simply said it was important for the people who do not have, or choose NOT to access the other avenues you mention to have it available. I personally think this is a great move., but it would not be the answer for that particular set of people I don't expect everything for free, so if they find a reasonable way to work online options out for the fans, it will be great, and this is a good first step. Long time to wait though.

Anonymous said...

From someone who is tired of paying up the nose for cable and seeing their bill increase often, I would bet there are others like me who would pay to watch the streaming of races. It would mean I can get rid of my cable. So with what money I'm saving, I can pay for the races online.

It would be another source of revenue for Nascar and would also get more exposure to their favorite demographic, the 20 something crowd, who almost all have some kind of gadget on the go that can access the web.

I'm very interested to see how this plays out

Sally said...

I really don't have a dog in this fight, since I won't bother even trying to watch a race on anything other than my 42" flat screen. I'm one of those who choose not to buy every electronic gadget known to man, and have no plans to do so. I'd be perfectly content with just getting good TV coverage of all the races, not a 'scripted' version of what someone else thinks I want to see. While I would be grateful for a less trashy Nascar.com website, I can find what I want to know elsewhere (like here!).

Russ said...

This is move in itself shows how the situation in the motorsports world has changed. At the very least it is apparent that they realize that without the digital rights they have a very weak bargaining position when the negotiating starts to replace the existing TV contracts.

Certainly it will be appealing to the networks, by opening up new venues to deliver content to a broader market.More important it will be appealing to sponsors, who have been voting with their checkbooks as to the attractiveness of Nascar as a brand.

Ultimately this can only benefit Nascar. Whether the increased revenue is enough to justify the cost remains to be seen. But my guess is that it will ultimately be a windfall to the stockholders.

And after all they are the ones that matter, right?

Air Ride Parts said...

Someone they put in charge in the website must be worse on how NASCAR.com is now. That's the problem.