Fox Strains to Keep Race Pace

Fox’s Sunday-afternoon telecasts of Nascar races are attracting considerably higher viewership than the network guaranteed to its advertisers, but Fox is having difficulty selling its ad inventory. While Fox’s Nascar ratings are more than doubling those of the NBA on NBC, the persistent perception that stock-car racing attracts a lower-income, regional audience kept many major sports advertisers from making commitments to Fox before the racing season began six weeks ago. And now, the softening economy has dissuaded many advertisers from grabbing up spots on Fox’s surprisingly popular coverage of the circuit.

Through its first six race telecasts this season, Fox’s Nascar coverage has averaged a 7.2 rating/17 share in households, up 26 percent over last season, when CBS, ABC, and cable networks TNN and ESPN aired the Nascar schedule. Fox guaranteed its advertisers a 6.0 rating in households.

Nascar’s male demo ratings are also up significantly this season, averaging a 7.6 among men 18-49 (up 46 percent from 2000), a 6.2 in 18-34 (up 55 percent) and an 8.1 among men 25-54 (up 37 percent).

By comparison, NBA telecasts on NBC are averaging a 3.0/7 in households, almost 60 percent less than Nascar’s rating. Among men 18-49, the NBA has averaged a 2.4, almost 70 percent below Nascar. Tellingly, Fox’s racing telecasts are outdrawing NBC’s pro hoops coverage in five NBA markets in the north, where Nascar has never been considered a strong draw: Philadelphia, Boston, Detroit, Minneapolis and Cleveland.

Yet while viewers’ enthusiasm for Fox’s Nascar coverage is impressive so far, advertisers and media buyers have been slower to respond. “If the ad community was based in Atlanta instead of New York, Chicago and Los Angeles, Nascar would be selling out,” said one major media buyer. “But there has been a regional bias against Nascar, and the perception is that it is still heavily skewed to Southeastern, not national, audiences. Many media buyers just don’t know much about auto racing. That haunts the sport.”

“I’ve never been to the Daytona 500,” another buyer said. “Sometimes you need to see these events first-hand to get a perspective on their scope.”

Jon Nesvig, president of sales for Fox Broadcasting, said the network did host some advertisers and buyers at the Daytona 500 in February. Nesvig said the network will continue to entertain the ad community at Nascar events as the season progresses.

Fox has eight telecasts remaining on its Nascar schedule, which continues through June 24. NBC will begin airing the first of 13 Nascar telecasts on July 7. Fox, NBC and AOL Time Warner’s TBS (whose cable telecasts will begin July 22) paid more than $400 million to take over Nascar’s TV rights beginning this year.

Exposing new advertisers and media buyers to the sport is just one challenge facing Nascar and its new TV partners. Another is getting longtime sponsors of the sport acclimated to the exhaustive Fox/NBC network TV schedule, where commercial-time costs dwarf what they paid in the past. “Last year, when many more Nascar telecasts were on cable, advertisers could spend $2 million for massive amounts of commercial time,” one buyer noted. “To get the same time on Fox this year, you need to spend $10 million.”

With rates averaging about $100,000 per 30-second spot (compared to about $80,000 for the NBA on NBC), Fox has already taken in about three times as much ad revenue as ABC and CBS did last year. But Fox, with 15 races, has far more inventory to sell than ABC (5 telecasts) and CBS (also 5) did last year.

Fox’s Nesvig concedes that three to four hours of Nascar coverage each Sunday translates to a lot of ad time to sell on a weekly basis. But he says the “smart advertiser” will realize the telecasts are reaching sizable audiences, not only in the Southeast but around the country, and will jump on board now, when the network is over-delivering audience and inventory is abundant.

Several buyers suggested that if Fox maintains its solid ratings through its remaining Nascar telecasts, and both Fox and Nascar spend more time educating advertisers about the sport’s audience, some ad dollars could be diverted next year from NBC’s struggling regular-season telecasts of the NBA over to Nascar.

In fact, Nascar’s ratings surge puts NBC in a delicate position. While NBC wants to see racing succeed on its own network, stronger Nascar ratings this season could spur advertisers to divert some of their NBA dollars to racing next year, buyers say.

Meanwhile, Fox cable network FX is gearing up to air three Nascar races, beginning May 5. Lindsay Gardner, executive vp of affiliate sales and marketing for the Fox Cable Networks Group, said that three major cable operators–Comcast, Charter and Adelphia–in the past month have added subscribers for FX “above and beyond what they are contractually required to do, and they have told us Nascar coverage is the primary reason.”