Race Team Alliance Appreciation Thread

wi_racefan said:
Turns out racetracks are very expensive to own and operate......
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If NASCAR wants to make an argument that the cost of physical plant for maintaining race tracks is causing them to lose money, they can. That would be a significant change from what I recall ISC's 10-K and Annual reports indicating and I doubt they'll go that route. Also turns out you can use racetracks for things other than NASCAR races, and most are utilized for things ranging from christmas displays to festivals to motorcycle races.

wi_racefan said:
If tracks are such a cash cow then why do no current team owners operate any cup level tracks? Except RP, which is a completely different situation
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Because tracks require capital investment many multiples over the cost of a race team? Also NASCAR and SMI made significant efforts to buy out track owners in the 00s?
 
virtualbalboa said:
If NASCAR wants to make an argument that the cost of physical plant for maintaining race tracks is causing them to lose money, they can. That would be a significant change from what I recall ISC's 10-K and Annual reports indicating and I doubt they'll go that route. Also turns out you can use racetracks for things other than NASCAR races, and most are utilized for things ranging from christmas displays to festivals to motorcycle races.
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Also turns out teams sell millions of dollars of sponsorship each year that provides a ton of income. Does anything actually think they will stop selling sponsorship or reduce the prices if they get a bigger slice of the pie?
 
wi_racefan said:
Also turns out teams sell millions of dollars of sponsorship each year that provides a ton of income. Does anything actually think they will stop selling sponsorship or reduce the prices if they get a bigger slice of the pie?
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It's irrelevant what teams do to make money in this argument.
 
Wasn't the main idea behind the Next Gen car to reduce costs? That hasn't happened apparently so playing hardball with NASCAR on the charter/revenue sharing agreement is their only hope.
 
JimmyJ4UK said:
Wasn't the main idea behind the Next Gen car to reduce costs? That hasn't happened apparently so playing hardball with NASCAR on the charter/revenue sharing agreement is their only hope.
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The car itself costs more, but there are few overall cars in the stable now. The other thing is while the car cost more there is no spending on R&D now that they can't create their own parts. No one is spending $2 million on R&D to produce a $150k chassis
 
wi_racefan said:
But you just used that same argument in regards to how tracks make additional money???????
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Track owners can use their tracks for a variety of things. What can NASCAR teams do with a fleet of Cup cars other than run Cup races?
 
wi_racefan said:
Ask people that pay millions a year to get their name of the sides of cars now. Clearly it's valuable because they even moved the numbers to give them more sponsorship area.
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Valuable why? What are they sponsoring the car for?
 
virtualbalboa said:
Because tracks require capital investment many multiples over the cost of a race team? Also NASCAR and SMI made significant efforts to buy out track owners in the 00s?
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Just to follow up on my own question: if race tracks are such bad investments and money losers, why did SMI and ISC build so damn many of them and buy out most of the independent track owners with inflated valuations?
 
wi_racefan said:
Was listening to good ol Dennis on action detrimental and he said the RTA is pushing for enough of the share that it would cover all their expenses without the need for sponsorship. Give me the moon!

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I remember when, two whole months ago, it was reported they were trying to drop their reliance on sponsorship down to around 50% (from 60-80%, varying by team, currently). At least that was rooted in some degree of reality.
 
FLRacingFan said:
I remember when, two whole months ago, it was reported they were trying to drop their reliance on sponsorship down to around 50% (from 60-80%, varying by team, currently). At least that was rooted in some degree of reality.
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Were teams actually able to get so much value from the TV deal that they didn't need sponsors (which I also think is unrealistic: they'll just spend more money on other things to gain new edges), we'd wind up with no pay drivers, a ladder system that promotes drivers based entirely on performance, pays drivers extremely well, and cars that were uniform and instantly identifiable to fans. These would be either reversions to the Good Ol' Days or outright improvements over the best eras of the past. You could not possibly ask for a better outcome as a fan watching races.
 
popcorn-muncher.gif
 
virtualbalboa said:
Just to follow up on my own question: if race tracks are such bad investments and money losers, why did SMI and ISC build so damn many of them and buy out most of the independent track owners with inflated valuations?
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Because 25 years ago when new tracks were being build ticket revenue and track sponsorship dollars were greater than what they are today by hundreds of percent?
 
Speedbowl14 said:
Because 25 years ago when new tracks were being build ticket revenue and track sponsorship dollars were greater than what they are today by hundreds of percent?
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LOL, if the ticket revenue has decreased 100%, there is literally zero. Attendance dropped significantly, yes. You know what also rose significantly? Media rights, which principally go to the tracks. There was and is significant reporting on how the revenue mix has changed, not just from reporters, but publicly available documents from companies that owned tracks.

Also: How does this support the notion that NASCAR has earned a lion's share of the profits if the sport has lost enormous amount of public interest? This is almost as funny as debating what the utility of a Cup Series chassis is.
 
Speedbowl14 said:
I hope math literacy is not a part of your daily job!!! :XXROFL:
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Bud, the fact that I know that a 100% decline means it went to zero is pretty indicative of why I have a job doing finance. Please, I am begging you, prove me wrong by telling me how NASCAR lost hundreds of percentage points of attendance.
 
Speedbowl14 said:
Because 25 years ago when new tracks were being build ticket revenue and track sponsorship dollars were greater than what they are today by hundreds of percent?
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virtualbalboa said:
prove me wrong by telling me how NASCAR lost hundreds of percentage points of attendance.
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Speedbowl14 didn't mention attendance, he mentioned revenue and sponsorship. You're correct that it isn't possible for today's track income to have declined more than 100%. However, if you start with today's smaller numbers as his statement implies, it's easily possible for past figures to be hundreds of times larger.

Regardless of the math, discussing attendance is changing the subject.
 
Charlie Spencer said:
Speedbowl14 didn't mention attendance, he mentioned revenue and sponsorship. You're correct that it isn't possible for today's track income to have declined more than 100%. However, if you start with today's smaller numbers as his statement implies, it's easily possible for past figures to be hundreds of times larger.

Regardless of the math, discussing attendance is changing the subject.
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Attendance was down in 2019 about 60% (same as ratings). You're never getting "hundreds of times" out of that from the current figures. Nor is it relevant since TV income exceeds what the ticket income was in adjusted terms. That was true before the new media deal.
 
virtualbalboa said:
Attendance was down in 2019 about 60% (same as ratings). You're never getting "hundreds of times" out of that from the current figures. Nor is it relevant since TV income exceeds what the ticket income was in adjusted terms. That was true before the new media deal.
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Just arguing to argue here, but Charlie is correct. It's very easy to get multiple hundreds of percent. Let's say a track that gets 50k attendance today and 150k 20 years ago. The 150k figure is 200% more than today's 50k figure. I would imagine too the revenue difference is greater than attendance, given I was paying much much more for Cup tickets 20 years ago than today.
 
This is the 2005 ISC Annual Report:

This is the 2018 ISC Annual Report:

Is admissions way down? Yeah. "Motorsports Related Income", the line item where media rights comes in, is more than double in 2018 what it was in 2001 at the advent of NASCAR having a unified television rights strategy. Even in 2005 at NASCAR's popularity peak, TV revenue was also double the revenue of admissions. I apparently must also clarify (since this is difficult for some to grasp) that the income derived from admissions was and is not a figure isolated to NASCAR races. This is why the media rights matter so much.

Now, again: What is the rationale that NASCAR is owed a greater share of the media rights based on the fact that the attendance has dropped? NASCAR is the promoter! They run the series! It's their responsibility to put in the work to engage new fans and grow the audience, not the teams. If the attendance has fallen dramatically, they are the primary ones at fault.
 
Speedbowl14 said:
Just arguing to argue here, but Charlie is correct. It's very easy to get multiple hundreds of percent. Let's say a track that gets 50k attendance today and 150k 20 years ago. The 150k figure is 200% more than today's 50k figure. I would imagine too the revenue difference is greater than attendance, given I was paying much much more for Cup tickets 20 years ago than today.
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I think there's some people here that just want to argue period.....
 
virtualbalboa said:
This is the 2005 ISC Annual Report:

This is the 2018 ISC Annual Report:

Is admissions way down? Yeah. "Motorsports Related Income", the line item where media rights comes in, is more than double in 2018 what it was in 2001 at the advent of NASCAR having a unified television rights strategy. Even in 2005 at NASCAR's popularity peak, TV revenue was also double the revenue of admissions. I apparently must also clarify (since this is difficult for some to grasp) that the income derived from admissions was and is not a figure isolated to NASCAR races. This is why the media rights matter so much.

Now, again: What is the rationale that NASCAR is owed a greater share of the media rights based on the fact that the attendance has dropped? NASCAR is the promoter! They run the series! It's their responsibility to put in the work to engage new fans and grow the audience, not the teams. If the attendance has fallen dramatically, they are the primary ones at fault.
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To your second point, the teams and drivers should have a responsibility at least to some degree to promote themselves and the sport as well. I mean, if there’s overall a significant reduction in track activity (there obviously has been) primarily because the RTA requested it to help cut expenses, and there are generally fewer promotional and sponsor appearances by drivers, too many drivers who don’t want to engage with the Netflix docuseries, etc., they bear at least some responsibility for shortcomings in popularity.

To the original point, the tracks and sanctioning body are healthy financially…and no matter what the TV revenue split is structured like under the next charter agreement, that figure is going to keep going up for NASCAR and SMI. But there is plenty of room for compromising on an increased distribution to the teams…but there will likely be some conditions associated with marketing and promotion attached to it.
 
I think the product is stale with this crap, low horsepower car.
If NASCAR wants to improve the sport then they need to allow more horsepower, more testing, longer practice sessions, etc. Every race nowadays is a freight train. Looks like a plate race, only slower.
 
FLRacingFan said:
To your second point, the teams and drivers should have a responsibility at least to some degree to promote themselves and the sport as well. I mean, if there’s overall a significant reduction in track activity (there obviously has been) primarily because the RTA requested it to help cut expenses, and there are generally fewer promotional and sponsor appearances by drivers, too many drivers who don’t want to engage with the Netflix docuseries, etc., they bear at least some responsibility for shortcomings in popularity.

To the original point, the tracks and sanctioning body are healthy financially…and no matter what the TV revenue split is structured like under the next charter agreement, that figure is going to keep going up for NASCAR and SMI. But there is plenty of room for compromising on an increased distribution to the teams…but there will likely be some conditions associated with marketing and promotion attached to it.
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The drivers generally have to as part of sponsor activation. That being said, of course things have changed because the nature of sponsorship has been changed to include a lot more Business-to-Business activity versus Business-to-Consumer. The reduced appearances and such are directly related to that shift, which is directly related to the increase of pay drivers throughout the sport and the transition of the national touring series under Cup to being pure ladder/development series.
 
virtualbalboa said:
The drivers generally have to as part of sponsor activation. That being said, of course things have changed because the nature of sponsorship has been changed to include a lot more Business-to-Business activity versus Business-to-Consumer. The reduced appearances and such are directly related to that shift, which is directly related to the increase of pay drivers throughout the sport and the transition of the national touring series under Cup to being pure ladder/development series.
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When 12 Corporations own over 500 food brands, I think it is more of a tax write off business expense, than a this driver is going to sell more stuff for us and make up what we spend. Can't say they all or like that, but Mars was a good example as being one of the twelve. Waltrip's General foods Tide Ride is another for example. Smithfield, one of 6 meat packers in the U.S., China owned, maybe need some good will from the good ol' boys and girls in Nascar?
 
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