$2 billion deal set to merge NASCAR and International Speedway Corp
In a $2 billion deal, NASCAR will be merging with International Speedway Corp, taking control of a dozen ISC racetracks that run NASCAR’s events. The list of tracks include the famed Daytona International Speedway, home of the Daytona 500. The merger is expected to be completed by the end of the year and will give NASCAR greater flexibility to alter the racing schedule. The sanctioning body has been under pressure from race teams and fans to shorten the grinding, ten-month-long, 36-race schedule, but contractual obligations, including allocating more than one race per year to some tracks, have prevented changes.
For more than three decades NASCAR had sponsorship stability, with “Winston Cup” having almost as much brand identity as hockey’s Stanley Cup when it came to famous sports championships. Regulations on tobacco advertising ended the Winston Cup in 2003 and since then title sponsorship for NASCAR’s premium series has passed through two cellphone service providers and a beverage company. Monster Energy is the current title sponsor, but that contract ends after this season.
NASCAR has decided to emulate the model of American stick-and-ball professional sports, which don’t have title sponsorships. Those competitions are called the Super Bowl and the World Series, not the [insert sponsor name here] Super Bowl, or The Baseball World Series presented by [insert sponsor name here]. For the purposes of advertising individual races on television and radio, NASCAR will likely use something like “the NASCAR Cup Series presented by [insert different sponsor each week here].” That could, however, cause confusion as track operators already sell title sponsors to their races. We could end up hearing something like, “The Amalgamated Widgets Michigan 400 at Michigan International Speedway in the NASCAR Cup Series presented by Thingamabobs Incorporated.”
Fan interest has been declining, now reaching a point where NASCAR is driven to action. More than two-thirds of the Monster Energy Cup races last season drew record low television ratings, and attendance at races has declined enough for track operators to close and cover up entire grandstands. Reducing the number of total races could improve ticket sales for the individual events.
In addition to a drop in popularity, NASCAR has also had to deal with some scandal. When Brian France, the grandson of NASCAR founder Bill France Sr., was arrested for drunk driving last August, his uncle Jim France replaced him as chairman of the company. That moved was welcomed by many in the sport as Brian France, who had run the sanctioning body since 2003, was criticized for his lack of engagement.
Speaking of bad publicity, one advantage for NASCAR in owning those tracks is privacy. ISC is publicly traded (NASCAR is paying ISC shareholders $45/share in the deal), while NASCAR is privately held by the France family, so, going forward, attendance figures, revenue, and other financial information for the tracks will not have to be disclosed.
The merger still needs shareholder and regulatory approval.