Basketball season is over. Baseball's barely begun. And hockey may not come back at all. But fast cars are still packing them in on the nation's racetracks—and TV sets. Now the real drama begins, as networks jockey for position in the race to win the rights to broadcast racing.
Nascar officials may have backed off a little on their initial demand— quietly asking earlier this year for a 50 percent fee increase from the television rights holders on the next rights package—but in the aftermath of record household ratings for the first half of the season on Fox, those officials expect to be appropriately rewarded by whichever network or combination of networks wins the next package, which will take effect at the start of the 2007 season.
Fox and NBC/Turner each currently pay Nascar $200 million per year under their six-year deals, which expire after the 2006 Nascar season, and the incumbents all want to renew those deals. Waiting in the wings in case Nascar cannot reach an agreement with its partners is ESPN/ABC Sports, whose president, George Bodenheimer, has publicly said Nascar is the one sport he would like to add to his portfolio.
"In a market where it has become increasingly difficult for sports to maintain their ratings, Nascar continues to grow its ratings, and we expect to get a fair value back from our partners for this growth," said Dick Glover, Nascar's vp of broadcasting and new media.
Fox finished the first half of Nascar telecasts on June 26 with an average household rating of 6.0, up 5 percent from the 5.7 it averaged during the same period last year. NBC and Turner Broadcasting, which share the season's second half, begin airing Nascar Nextel Cup races over the July Fourth weekend.
But the racing circuit's TV partners may not be so quick to open their wallets much wider.
"I can understand the Nascar folks saying, look at the growth, but they also have to look at the reality and economics," said Ed Goren, president of Fox Sports. He believes the current Nascar rights holders may have overpaid a bit five years ago under the existing agreement, because advertisers were slow to recognize the value of the Nascar telecasts and brand, at least at first.
"Five years ago, Madison Avenue did not embrace [Nascar] right away, and we were forced to start out with a low ad base," Goren said. That lack of demand—and revenue—left the networks with production deficits for covering the Nascar races. They now are just about recovered, so a large rights fee increase would put them back to square one.