CHICAGO (Reuters) - Many NASCAR fans think nothing of jumping in their recreational vehicles or pickup trucks and driving 300 miles or more to watch races in places like Talladega, Alabama; Bristol, Tennessee; and Las Vegas.
But rising gasoline prices are forcing them to make tough choices.
“The higher fuel prices have hit them hard,” said Roger VanDerSnick of International Speedway Corp, one of two major publicly owned race track companies. “We pull from such a huge geographical area.”
The National Association for Stock Car Auto Racing (NASCAR) has been one of the fastest growing sports in the United States, boasting a fan base of about 75 million, second only to the National Football League. It has the biggest stable of corporate sponsors of any U.S. sports league and TV deals worth $4.48 billion that run through 2014.
But its largely blue-collar fan base is feeling the pinch. While several tracks still sell out, others have seen crowds shrink.
VanDerSnick said the average percentage drop in ticket sales at ISC’s tracks was in the mid-single digit range, and fan spending on merchandise and concessions has declined similarly.
ISC, which operates race tracks in several states including the home of the Daytona 500 in Florida, competes with Speedway Motorsports. The France family owns 67 percent of ISC’s voting stock and also owns NASCAR.
Bad news for tracks is a June government report that showed Americans reduced the number of miles they drove for the sixth straight month in April, resulting in the biggest six-month decline since the oil shock of the 1979-80 Iranian revolution.
NASCAR’s advantage is its ability to sell each race as a unique event that many fans even build vacations around.
“If you’re a fan and make the decision to go to Talladega or MIS or Richmond, you definitely make those plans like other families would to go to Disneyland,” said Roger Curtis, president of the Michigan International Speedway in Brooklyn, Michigan. “It insulates us some.”
David Carter, executive director of the Sports Business Institute at the University of Southern California, said that while fans may grumble about the price of gas, they still regard going to some races as a pilgrimage.
“If it’s a special event and ... these people have made a point out of going year-in and year-out, they might be inclined to stick with it another year,” Carter said.
Bob Montgomery, of Hastings, Michigan, attending MIS for a race on June 15, said the calculation was easy. “You buy your tickets a year in advance and then you weigh out, ‘OK, do you lose money from that or do you shell out more money for the gas?’” he said. “But it’s like, do you give it up? No.”
NASCAR has tried to remain fan friendly, allowing fans to bring in small coolers with their own food and drinks, and providing free parking at most tracks. Packages include all-you-can-eat deals, and tracks also offer nearby campgrounds to entice those who come for several days to view multiple car and pickup truck races.
ISC has kept most ticket prices unchanged, and rolled out payment plans as an option for financially strapped households that often buy tickets a year in advance.
The tracks also are upgrading their facilities to make them more attractive to fans.
At MIS, ISC has spent $12 million this year installing a new scoreboard, better seating, a new sound system and improved facilities at nearby campgrounds. The track also plans to boost marketing to draw more fans from Canada and from out of state to help offset a Michigan economy hit by the struggles of automakers General Motors Corp and Ford Motor Co.
Another factor protecting NASCAR is its increasing reliance on corporate money and TV rights fees, William Blair & Co analyst Bob Simonson said.
“(NASCAR’s) relative worry is much less because they have guaranteed contracts on very, very profitable sponsorship revenues and importantly the TV,” he said.
The profit margins for the TV and sponsorship businesses are twice those from tickets and concessions, and account for more than half the tracks’ earnings, Simonson said.
The danger would be sponsorship revenue drying up if economic weakness lasts a long time, but most of those deals run three to four years, he said.
Reporting by Ben Klayman; additional reporting by Ben LaMothe in Brooklyn, Michigan