Should Nascar Expand Overseas?

To maintain its growth, Nascar is thinking international. How will this all-American sport fare in Latin America, Australia, or even Japan?

By Rick Horrow and Karla Swatek

1. As Playoff System Begins, Nascar Is Chasing Revenue and Ratings

Starting in the 1980s and through the '90s, Nascar was unquestionably the fastest-growing sport in America. It's 90% dollar-on-dollar business growth rate was more than the NFL, NBA, or any of the other "stick and ball sports." However, for all of the past success Nascar has enjoyed, no sports organization faces more unanswered questions in today's economy.

First among those questions are existing TV relationships. Ratings for the 2009 regular season were down 7.6% heading into the Chase, averaging 6.899 million viewers for 23 broadcasts on ABC, ESPN, Fox, and TNT (and down from an average of 7.452 million viewers for 24 telecasts last year). Current deals with ABC, ESPN, and Turner are valued at almost $600 million per year and expire in 2014. With five years remaining on the contracts, Nascar should have plenty of time to steer the ratings ship straight.

Second, while a spate of recent team mergers is streamlining operations and creating economies of scale, some drivers and executives are convinced the mergers are damaging the sport. We don't want to see mergers of organizations. We want to see organizations have multiple teams," says Chase contender Ryan Newman in the Charlotte Observer. "I want to see six to eight cars go home every week. That's the way it should be in my eyes." For others, such as Tony Stewart's new powerhouse Stewart-Haas Racing and Richard Petty's RPM buyout of Yates Racing, it's a return to relevance in the acquisition of diverse drivers, a cutting-edge garage, and stronger supplier relationships.

The perception that the state of the auto industry means trouble for Nascar is only somewhat true. While some hospitality and sponsorship cutbacks have been unavoidable, Dodge, Ford (F), and GM in recent weeks have all restated their commitment to the sport. In addition, such nonauto sponsors as Sprint (S), Subway, and Home Depot (HD) aren't going anywhere. Yes, motor sports giant International Speedway Corporation (ISCA) has cut about 50 jobs in its business units, but anticipates "no further significant position reductions," according to a company spokesman. And Nascar has announced that next year its Sprint Cup, Nationwide, and Camping World Truck series will all maintain the same number of races from 2009: 36 for the Sprint Cup, 35 for the Nationwide, and 25 for the Camping World Truck Series.

As its business relationships continue to stabilize, Nascar should shift focus to expansion. Perhaps it is time to look closely at Ontario in Canada and to make prior exhibition races in Australia and Japan part of the yearly calendar. Or as Nascar CEO Brian France notes, "there also could be a chance to break into the Latin America market, since Miami is the gateway to Latin America." But first, it's on to Dover.

2. Whistle Blowing in the Wind? NBA to Lock Out Refs

It's official. After a couple of weeks of unresolved negotiations, the NBA has notified the National Basketball Referees Assn. (NBRA) that it has declared a referee lockout, only weeks before NBA preseason games are set to begin.

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