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The Prince Of NASCAR


The smell of gasoline, the roar of engines, gruff men puffing on cigarettes and cussing about needing more horsepower out on the oval. For most people, that's hardly the stuff of childhood memories. But Brian France isn't most people. When the son of America's first family of stock-car racing thinks back as far as he can, he is a 4-year-old with a mop of sandy hair tagging along as his daddy chews the fat with daredevil drivers such as Richard Petty and grease-stained pit crews in the garages of Daytona International Speedway. Or he is looking up at politicians and movie stars who have stopped by the France house in the days just before the Daytona 500. They sip cocktails and pat him on the head.

In his 41 years, France can't recall not being at Daytona, the Sunday spectacle that marks the start of yet another NASCAR season. But this year's big race, on Feb. 15, will be like no other for the husky, baby-faced France -- and not just because President George W. Bush is scheduled to make an appearance. Race Day 2004 will be Brian's first as the chairman and chief executive officer of a zooming, multibillion-dollar empire founded on the sands of Daytona Beach, Fla., in 1948 by his grandfather, William "Big Bill" France Sr.

SUDDENLY, THE ASCENSION OF BRIAN

Last September, Brian's father, 70-year-old Bill Jr., announced that after 20 years of being prepped in various executive posts, his son was being raised up to the NASCAR throne. That came as a surprise to the racing world because Bill Jr., now a billionaire, had ruled the sport with an iron fist since succeeding his own father in 1972. Heart surgery and bouts with cancer in recent years may have influenced the decision. "Bill decided," one confidant explains, "that he wanted to be around for the transition."

What Brian inherits is a humming media and marketing machine that keeps swiftly evolving from its start as a pastime for beer-guzzling Bubbas. TV deals worth $2.8 billion with Fox, NBC, and TNT extend out to 2008, and NASCAR races are drawing the second-largest sports-viewing audience after the NFL. Thirteen million fans bought tickets to the 2,200 races in NASCAR's various divisions last year, with an average turnout of 186,000 for big events -- at an average ticket price of $75.

The numbers don't stop there. In the past five years, four new tracks have opened in big urban areas, including Los Angeles and Chicago, and plans are coming together to put one in New York City -- or at least nearby. Corporations spend more than $1 billion a year for NASCAR sponsorships and promotions, and annual sales of NASCAR-licensed merchandise top $2 billion.

NASCAR execs are relentless self-promoters who like to say the sport has 75 million fans, more than half of them hard-core. Even if that's over the top, NASCAR certainly has become a cultural force as politicians scurry to curry favor with a powerful demographic of white males dubbed "NASCAR dads." No wonder Bush, a no-show at the World Series and the Super Bowl, is headed for Daytona.

There is a faint grinding sound, however, beneath the sweet purr of the NASCAR engine. Even before the steering wheel was out of Bill Jr.'s hands, racing's old guard was privately questioning whether Brian has the right stuff to run the sport. After all, Bill Jr. is revered for putting NASCAR on the national map while fiercely guarding the interests of drivers, team owners, and track proprietors -- along with those of the Frances, of course -- and doing so with a cozy family feel. Racing insiders like to say that Big Bill turned stock cars into a sport, Bill Jr. turned them into a business, and now Brian wants to turn them into entertainment. It's the lure of Hollywood that has folks nervous. But the younger France, who shares a home in Los Angeles with his second wife and 11-year-old stepdaughter, vows to shake things up so the sport doesn't stagnate.

France doesn't kid himself about how much he will be scrutinized. "Am I here because of my last name? To a degree," says France. "But I would ask people to judge me and my executive team on what we accomplish. You never want to alienate the core fans, but we are going to take risks."

It's not just a debate over the glitzing of NASCAR that could be troublesome. The Frances face an antitrust suit alleging that they unfairly use their control over NASCAR, stock-car racing's sanctioning and rule-making body, to favor the family-controlled but publicly held racetrack company International Speedway Corp. (ISC) (ISCA) in the awarding of events. The lawsuit, filed by a shareholder of another racetrack company, is set to go to trial this summer in Texas. It could shine the glare of publicity on France family secrets -- especially since David Boies, the lawyer who prosecuted the Justice Dept.'s case against Microsoft Corp., represents the Frances, while O.J. Simpson defense attorney Johnnie Cochran represents the shareholder.

Meanwhile, in a sport that never met a sponsor it didn't like, France will have to persuade corporations to keep spending. With the sponsorship costs of maintaining a competitive racing team going through the roof -- they have more than doubled in 10 years, to as much as $15 million per season -- and with marketing messages being lost among the increasing clutter of logos on race suits, cars, and tracks, that will be a distinct challenge. Several teams this year have struggled to find sponsors. "The costs and clutter are going up," says independent analyst Dennis McAlpine, who follows ISC. Still, Brian intends to aggressively pursue two industries that have been elusive -- financial services and high tech.

In tech, anyway, he made one giant step even before his ascension. In June, 2003, it was announced that after 32 years, Winston was being succeeded as the sponsor of NASCAR's premier racing series by Nextel Communications Inc. (NXTL) Winston parent R.J. Reynolds Tobacco Holdings Inc. (RJR) had been paying roughly $30 million a year, but the Reston (Va.) wireless outfit is shelling out $750 million over 10 years to put its name on the Nextel Cup Series -- one of the biggest sponsorship deals ever. That a technology company is replacing a struggling cigarette maker speaks volumes about where the sport is headed. Working with Nextel, NASCAR can now exploit opportunities to sell racing to teenagers, something it couldn't do with Winston.

That's in keeping with France's push to lure younger fans. NASCAR is in the first year of a six-year exclusive video-game deal with Electronic Arts (ERTS) (some drivers, like Dale Earnhardt Jr., use the games' racing simulator to bone up on their skills). EA is talking with Nextel about offering some kind of NASCAR game on its phones. Nextel already offers a special news feed -- NASCAR on the go -- to its phone subscribers. And nascar.com is one of the top five most heavily trafficked sports Web sites.

As with any big family, the Frances are not without internal tensions. Brian has heard whispers for years that his older sister and only sibling, Lesa France Kennedy, 42, the president of ISC, is the sharper exec. It doesn't help that Lesa graduated from Duke and Brian never got his degree from Central Florida. Despite the sibling rivalry, NASCAR insiders say both knew that appointing a woman to run male-dominated NASCAR was not going to happen. And France is wasting no time in making clear that the Era of Brian has begun.

France's first directive was announcing on Jan. 20 rule changes to NASCAR's point system, which determines the champion driver every year. The changes were meant to create more excitement in October and November, the tail end of the 10-month season, when TV ratings get hammered by pro football. After all, NASCAR's version of the Super Bowl, the Daytona 500, starts the season instead of ending it.

RUMBLINGS FROM THE RANKS

Messing with a point system that had been in place since 1975 was heresy to some drivers. NASCAR 2003 champ Matt Kenseth and four-time champ Jeff Gordon criticized the changes as being all about ratings, not racing. "You could say that his changes...are too far to the entertainment side," says Gordon. Brian's response: NASCAR is entertainment.

The way France sees it, NASCAR isn't just competing with other auto-racing events, such as the open-wheel Indy car series, or with "stick and ball" leagues, but with all entertainment choices. That's why he has hired Richard Glover, a former No. 2 exec at ESPN Inc., to forge new relationships with Hollywood. A NASCAR Imax movie will debut in March, and cable channel FX is planning a reality series following the lives of drivers. And NASCAR boasts celebs galore. California Governor Arnold Schwarzenegger is a fan. So is Ben Affleck, grand marshal of this year's Daytona 500. Sheryl Crow likes the races. Britney, too. "If we can showcase the drama and athleticism differently and in a better way, then that is what it is all about," says Brian.

Tinseltown is a long way from stock-car racing's roots in the dirt tracks of the South, where bootleggers, good ol' boys, and veterans just back from World War II swigged a clear liquid that wasn't water and tried to run each other off the road. "Big Bill" France, a Daytona gas station owner, began to put some order into the races, organizing events that ran on the hard sands of the nearby beach. As the races spread throughout the South and onto hard tracks, Big Bill, a formidable figure at 6 foot 5 inches, became troubled that each track had its own rules. So he called a meeting of race organizers at the Streamline Hotel in Daytona in 1947 to suggest that a single entity control stock-car racing. A year later, NASCAR was born.

Through the years, as stock-car racing grew, so did the France family's grip. Today that control is creating an undercurrent of resentment. Plenty of folks in the NASCAR world are hoping the antitrust suit filed by Plano (Tex.) businessman Francis Ferko, a shareholder in Speedway Motorsports Inc. (TRK), could force the Frances to divest some holdings. Ferko contends that before Speedway built the $150 million Texas Motor Speedway in 1997 ($100 million in renovations have been added since), the Frances promised to place two major races there. So far, the track has only one Nextel Cup race.

Ferko alleges that the Frances use NASCAR to unfairly award more races to the tracks of ISC, which hosts 16 of the 36 Nextel races. Two more are run at a track the family owns separately. While there is supposed to be a Chinese wall between Brian's NASCAR and Lesa's ISC, there is only plasterboard separating them: The operations share the same offices on the same floor in a Daytona building whose facade is done up like a checkered flag. "It's 1,000% unfair -- or could it be even more unfair?" quips Speedway CEO O. Bruton Smith, the second-largest car dealer in the country, with headquarters in Charlotte. "The greed factor here has been a real problem." Driver Gordon says concerns that the Frances have too much control are real, but "what they have accomplished allows a lot of us to live some pretty amazing lives."

Both sides say they want to see the case go to trial. And while Brian and Lesa are putting on a unified front, they've had their share of disagreements over the years. Lesa -- who was adopted by Bill Jr. and his wife, Betty Jane -- and Brian are anything but effusive about each other. "We do run into heavy competitive situations," says Lesa, who is married to plastic surgeon Bruce Kennedy. For instance, Lesa says Brian was not thrilled that she negotiated a deal for Pepsi to become the official soft drink of ISC. Coca-Cola Co. (KO) is a NASCAR sponsor. "There are always good, spirited debates on how to do things," says Brian.

These days, though, a top priority for both Brian and Lesa is building a track in New York. Stock-car racing in the Big Apple has been talked about for years, but there is a new urgency for NASCAR. On Feb. 6, ISC announced its intention to build a track in Washington State, leaving New York as NASCAR's last major geographic void -- and perhaps its most important market. Says NASCAR COO George Pyne, 38, a grad of Choate and Brown and one of the thirtysomething execs with whom Brian has surrounded himself: "Ten million Americans live in that market. To have a totally successful product, you have to be there."

Building a track in New York will come down to real estate because at a minimum, several hundred acres of land will be needed. Brian spent some 60 days in New York last year promoting the plan, and since ISC would develop the track, Lesa has been flying into town every other week to work on the deal, too. Being in New York would put stock-car racing in Madison Avenue's face, she says: "It would just open a lot of doors."

TV RATINGS THAT BEAT BASEBALL

Nobody would enjoy seeing a track in the city more than the TV network executives who ponied up for NASCAR rights. Until 2001, those rights were negotiated by each racetrack, but France and his top TV exec, Paul Brooks, 38, persuaded track owners to consolidate those rights with NASCAR and strike a network package that included televising all races in the Nextel and second-tier Busch Series. It worked, prompting a shift from cable to the broader broadcast audience. News Corp.'s (NWS) Fox (FOX) has made the biggest investment in NASCAR, broadcasting Nextel Cup races in the first half of the season (so as not to conflict with its NFL programming in the fall), putting Busch Series races on its FX channel, covering auto racing extensively on its SPEED Channel, and airing a daily show, Totally NASCAR, on its Fox Sports Networks (FOX). "We've done a great job of being able to demystify the races with great analysis....and all sorts of new camera angles," says Fox Sports CEO David Hill. "And we are able to capture the sounds. These cars sound like caged, prehistoric beasts. It's like nothing else you've heard."

Fox's Winston races (Nextel this year) have averaged a 4 or 5 rating (about 5.4 million households tuning in), vs. about 10.5 for the average Fox NFL game. Still, that's far ahead of baseball's regular-season average 2.6 rating on Fox. Last year's Daytona 500 on Fox posted a 9.8 rating (though, by contrast, this year's Super Bowl on CBS did a 41.4). "Because these are cars we all drive, Dodges, Fords, and Chevrolets," says Hill, "there is an accessibility to it." But not for everybody.

SPONSORS, SPONSORS EVERYWHERE

The rap against auto racing as a TV sport is that it is deathly boring to watch cars go round and round, that people are really only tuned in to see crashes -- like folks waiting for the fights during hockey games. Yet fans say that once you understand the race, it's all about strategy. "I see it as a huge, three-dimensional chess game," says Dan Gronich, chairman of real estate firm Grubb & Ellis/New York. "You see how drivers handle drafting [a vacuum created by a front-running car pulling others behind it], passing, pit stops, tire changes. The layers are what make it fascinating." NBC Sports President Ken Schanzer concedes that it may take "some initiation," but "let's face it, NASCAR is putting on a Super Bowl every week."

There is such a thing as too much spectacle, though. And while NASCAR bills itself as the best marketing opportunity in sports, it could be running up against a saturation problem. For the 2004 season, NASCAR will have 36 official sponsors, from the Official Armed Service (the U.S. Army) to the Official Pizza Delivery (Domino's Inc.). Twenty-one other companies are promotional partners, from Rag? to Waste Management Inc. (WMI). Each race car has a primary sponsor -- which puts up anywhere from $9 million to $15 million per season -- and a slew of associate sponsors. The racetracks have separate sponsorships. In addition, drivers can strike their own sponsorship deals. (Star driver Gordon, for one, makes more than $20 million a year in race purses and promotional contracts.)

So is hooking up with stock-car racing really a good investment? That depends on whom you talk to. "Listen, let's say the NASCAR fan base isn't 75 million, but 40 million," says Mark Schweitzer, senior vice-president for marketing at Nextel. "There is still tremendous upside for us." David F. D'Alessandro, chairman of John Hancock Financial Services Inc. (JHF), doesn't see it that way. "To struggle for space with the dozens of other sponsors isn't worth it," he says. "Plus, your main decal is traveling at 200 mph. Who can see that? And is the crowd really sober enough to see it? Having a guy emerge from a fireball isn't a prudent way to sell insurance anyway."

The overpowering commercialization of NASCAR worries some old-timers, too. "[Brian] always needs to remind himself this is about the race cars," says Richard Petty, 66, a seven-time NASCAR champion and current team owner. But Brian France doesn't need reminding about the footprints he must fill. The family legacy stares back at him every day from the walls of NASCAR's offices: photos of his grandfather and father with drivers, big-shot CEOs, and Presidents.

On a recent morning, Brian was in his corner office reviewing on a massive, flat-screen TV the rough cut of a new commercial. Using computer-generated images, old drivers are seen next to the new generation -- Richard Petty with Gordon, "Fireball" Roberts and David Pearson with Earnhardt Jr. -- the old cars racing against the new machines. The ad's message, that NASCAR is timeless, is Brian's attempt to bridge the old and the new.

"Brian's biggest challenge isn't any of these issues with drivers or sponsors or new fans. His biggest challenge is to be Brian France," says team owner Felix Sabates, who has known him since he was a kid. When the announcer calls out "Start your engines" at Daytona on Feb. 15, the new CEO will officially get his chance.

By Tom Lowry


Toyota's Hydrogen Man
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