Comments on: Franchising Needs to Stick to Stick and Ball Sports http://www.thenascarinsiders.com/2008/12/14/franchising-needs-to-stick-to-stick-and-ball-sports/ A blog by insiders for outsiders Thu, 09 Feb 2012 00:03:01 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Tommy http://www.thenascarinsiders.com/2008/12/14/franchising-needs-to-stick-to-stick-and-ball-sports/comment-page-1/#comment-4346 Tommy Wed, 17 Dec 2008 23:58:43 +0000 http://www.thenascarinsiders.com/?p=689#comment-4346 If Nascar did a better job of managing the competition and more organizations (teams) had a better chance of winning and getting value for sponsors, the sport would do much better as a whole. Franchising isn't the reason the #43 is shutting down. As stated here, they finished 21st in points and started every race. You really can't use the worn out "poor performance" clause with them either. There were several teams behind them in the standings (MWR, for one) that will soldier on with enough money to compete. The problem is the competitive imbalance and the concentration of all of the wealth with Nascar and a few organizations. Nascar tells AT&T to get lost, but then tells Childress to go raid someone else's sponsor. You want to fix Nascar, have another season like 2001 when there were 19 different races winners, 5 first time winners and 15 different pole winners. If Nascar did a better job of managing the competition and more organizations (teams) had a better chance of winning and getting value for sponsors, the sport would do much better as a whole.

Franchising isn’t the reason the #43 is shutting down. As stated here, they finished 21st in points and started every race. You really can’t use the worn out “poor performance” clause with them either. There were several teams behind them in the standings (MWR, for one) that will soldier on with enough money to compete.

The problem is the competitive imbalance and the concentration of all of the wealth with Nascar and a few organizations. Nascar tells AT&T to get lost, but then tells Childress to go raid someone else’s sponsor.

You want to fix Nascar, have another season like 2001 when there were 19 different races winners, 5 first time winners and 15 different pole winners.

]]> By: Neon http://www.thenascarinsiders.com/2008/12/14/franchising-needs-to-stick-to-stick-and-ball-sports/comment-page-1/#comment-4331 Neon Tue, 16 Dec 2008 20:49:28 +0000 http://www.thenascarinsiders.com/?p=689#comment-4331 As mentioned in Journo's article (para #2) "While this works in other sports because they are limited by geographic regions and fan bases, this makes little sense for NASCAR." is one primary reason franchising will not work. I live in Atlanta, home of the Falcons, Braves and Hawks, where I'll pull for those teams (ok…easier in good seasons than poor seasons) year in and year out. There are some players on those teams that I like, don't like and some I don't care much about. But by in large, I cheer for and buy a ticket to some games and buy some apparel because they are my "home" team. Now let's say NASCAR sells franchises to 43 teams. Joe Gibbs Racing (JGR) is awarded (3) franchises for each of his drivers, uh “teams” (Hamlin, Lagono and Kyle Busch). Now unless something big changes, JGR is not associated w/ any particular city in America (unless you consider Charlotte and then 95% of teams are from the same city). JGR, in effect does not have rights to ticket sales, concessions, parking fees, etc for even a single event. So where does the money come from to, not only run the team, but to make being a team owner a very profitable business? Selling sponsorships for over and above the cost to compete. The consumer here is the company sponsoring a JGR car just for the right to paste their name on a quarter panel, which hopefully draws the attention of race fans in person, print or TV. Side note: remember the year the Chicago Bears went to the Super Bowl shuffle and QB Jim McMahon got “in trouble” for wearing a Taco Bell head band??? Jim was in the wrong sport. Bottom line is NASCAR is a traveling circus made up simply of bill boards that tag along and display their ads 36 weeks a year in different cities. Kind of like a series of trade shows. But how do you get people to show up and spend money collected by the track itself. The actual competition is supposed to be the draw, but is incidental to the main intent of drawing money from fans at the track, advertisers on TV and print and sponsorships for the teams. Unlike F1 or Sports cars, fans don’t show to see the sheer technology and performance of the sexy cars. Heck, the cars are all the same and (except for the trippin hp) really not that all that impressive. Why do you think so many Cup drivers enlist in the 24 hrs of Daytona? It’s FUN! Ask Tony, Jeff, Kyle, JJ, Burton, etc. On a side note, this is also why NASCAR has never divided the series into an East vs West contest. Jeff Gordon fans in CA will not attend a race and spend money if JG is in the Eastern division. As mentioned in Journo’s article (para #2) “While this works in other sports because they are limited by geographic regions and fan bases, this makes little sense for NASCAR.” is one primary reason franchising will not work. I live in Atlanta, home of the Falcons, Braves and Hawks, where I’ll pull for those teams (ok…easier in good seasons than poor seasons) year in and year out. There are some players on those teams that I like, don’t like and some I don’t care much about. But by in large, I cheer for and buy a ticket to some games and buy some apparel because they are my “home” team. Now let’s say NASCAR sells franchises to 43 teams. Joe Gibbs Racing (JGR) is awarded (3) franchises for each of his drivers, uh “teams” (Hamlin, Lagono and Kyle Busch). Now unless something big changes, JGR is not associated w/ any particular city in America (unless you consider Charlotte and then 95% of teams are from the same city). JGR, in effect does not have rights to ticket sales, concessions, parking fees, etc for even a single event. So where does the money come from to, not only run the team, but to make being a team owner a very profitable business? Selling sponsorships for over and above the cost to compete. The consumer here is the company sponsoring a JGR car just for the right to paste their name on a quarter panel, which hopefully draws the attention of race fans in person, print or TV. Side note: remember the year the Chicago Bears went to the Super Bowl shuffle and QB Jim McMahon got “in trouble” for wearing a Taco Bell head band??? Jim was in the wrong sport.
Bottom line is NASCAR is a traveling circus made up simply of bill boards that tag along and display their ads 36 weeks a year in different cities. Kind of like a series of trade shows. But how do you get people to show up and spend money collected by the track itself. The actual competition is supposed to be the draw, but is incidental to the main intent of drawing money from fans at the track, advertisers on TV and print and sponsorships for the teams. Unlike F1 or Sports cars, fans don’t show to see the sheer technology and performance of the sexy cars. Heck, the cars are all the same and (except for the trippin hp) really not that all that impressive. Why do you think so many Cup drivers enlist in the 24 hrs of Daytona? It’s FUN! Ask Tony, Jeff, Kyle, JJ, Burton, etc.
On a side note, this is also why NASCAR has never divided the series into an East vs West contest. Jeff Gordon fans in CA will not attend a race and spend money if JG is in the Eastern division.

]]> By: T.C. http://www.thenascarinsiders.com/2008/12/14/franchising-needs-to-stick-to-stick-and-ball-sports/comment-page-1/#comment-4330 T.C. Tue, 16 Dec 2008 20:40:05 +0000 http://www.thenascarinsiders.com/?p=689#comment-4330 racer61: The are serious fundamental differences between stick and ball sports and NASCAR. The reason the other sports have such large barriers to entry, is that major sports teams rely on geography. Only major cities with large populations can support NFL, MLB, and NBA teams. You need a large population as to get a small percentage to show up to the games. You also need those people to contribute tax dollars to build the stadiums. Teams that started in small cities would never survive, as there just wouldn't be enough people to buy tickets, merchandise, etc. There are only so many big cities in the U.S. so there can only be so many teams. Stick and ball teams don't need to be competitive to make money. There are plenty of examples of sports teams that struggle year in and year out on the field, but still make money at the end of the day. NASCAR to its very core is a performance based business. Companies don't want to sponsor teams that aren't running up front, because they get less exposure. You need to WIN to be attractive to sponsors. Another major difference is the leagues. The NFL, NBA, MLB, and NHL are all organizations made up of the owners. There is no one owner of one of those leagues. The team owners collectively own the leagues. More teams means each owner gets a smaller share of the profits. This also explains why those team owners have power. Its because they own the league. The league commissioners are just the chairman of the board. They act as leader for the shareholders (the team owners). Stick and ball sports teams make most of their money off ticket sales and TV deals. They also earn revenue from merchandise sales, food and beverage sales, and to a smaller degree, sponsorships. NASCAR teams have a very different business model. Teams must derive the bulk of their operating revenue from selling those all important sponsorships. Without them, they don't exist. They don't have all these other streams. There shouldn't be a franchising system, because there are no real benefits, and it doesn't make any sense. I have yet to hear anyone suggest a real, feasible, thought out plan on how this would all work, and how it would benefit anyone. The more NASCAR teams that exist, the better the competition gets, because teams are forced to innovate and advance in order to sometimes even make the races! This competition is what has pushed the sport to be better and faster every year since 1949. And there is yet another difference. Stick and ball teams don't have to qualify just to play a game. racer61: The are serious fundamental differences between stick and ball sports and NASCAR. The reason the other sports have such large barriers to entry, is that major sports teams rely on geography. Only major cities with large populations can support NFL, MLB, and NBA teams. You need a large population as to get a small percentage to show up to the games. You also need those people to contribute tax dollars to build the stadiums. Teams that started in small cities would never survive, as there just wouldn’t be enough people to buy tickets, merchandise, etc. There are only so many big cities in the U.S. so there can only be so many teams.

Stick and ball teams don’t need to be competitive to make money. There are plenty of examples of sports teams that struggle year in and year out on the field, but still make money at the end of the day. NASCAR to its very core is a performance based business. Companies don’t want to sponsor teams that aren’t running up front, because they get less exposure. You need to WIN to be attractive to sponsors.

Another major difference is the leagues. The NFL, NBA, MLB, and NHL are all organizations made up of the owners. There is no one owner of one of those leagues. The team owners collectively own the leagues. More teams means each owner gets a smaller share of the profits. This also explains why those team owners have power. Its because they own the league. The league commissioners are just the chairman of the board. They act as leader for the shareholders (the team owners).

Stick and ball sports teams make most of their money off ticket sales and TV deals. They also earn revenue from merchandise sales, food and beverage sales, and to a smaller degree, sponsorships. NASCAR teams have a very different business model. Teams must derive the bulk of their operating revenue from selling those all important sponsorships. Without them, they don’t exist. They don’t have all these other streams.

There shouldn’t be a franchising system, because there are no real benefits, and it doesn’t make any sense. I have yet to hear anyone suggest a real, feasible, thought out plan on how this would all work, and how it would benefit anyone.

The more NASCAR teams that exist, the better the competition gets, because teams are forced to innovate and advance in order to sometimes even make the races! This competition is what has pushed the sport to be better and faster every year since 1949. And there is yet another difference. Stick and ball teams don’t have to qualify just to play a game.

]]> By: racer61 http://www.thenascarinsiders.com/2008/12/14/franchising-needs-to-stick-to-stick-and-ball-sports/comment-page-1/#comment-4326 racer61 Tue, 16 Dec 2008 19:40:53 +0000 http://www.thenascarinsiders.com/?p=689#comment-4326 T.C. you don't think that other sports have a massive barrier for entry for new teams? Has it hurt the competition level in the NFL that I can't just put together a team and show up wanting to play? T.C. you don’t think that other sports have a massive barrier for entry for new teams? Has it hurt the competition level in the NFL that I can’t just put together a team and show up wanting to play?

]]> By: Journo http://www.thenascarinsiders.com/2008/12/14/franchising-needs-to-stick-to-stick-and-ball-sports/comment-page-1/#comment-4325 Journo Tue, 16 Dec 2008 18:36:22 +0000 http://www.thenascarinsiders.com/?p=689#comment-4325 Lunch_Time- While that is true, the teams are still not seeing any of that money. 30-40 percent of it goes to the drivers and a large percentage of the rest goes to bonuses for the team members. Winnings have very little to no effect on the bottom line for most of these teams racer61- There was actually an incident in 1969 at Talladega Superspeedway where all of the major drivers decided to pull out of a race because they were concerned with the speed that could be achieved on the track. Bill France took all of the guys from the prior days race and ran the race with them. People still showed up and the racing went on. The moral of the story is, NASCAR is not going to be bullied by team owners, or drivers. It didn't happen then and it would never happen today. Lunch_Time- While that is true, the teams are still not seeing any of that money. 30-40 percent of it goes to the drivers and a large percentage of the rest goes to bonuses for the team members. Winnings have very little to no effect on the bottom line for most of these teams

racer61- There was actually an incident in 1969 at Talladega Superspeedway where all of the major drivers decided to pull out of a race because they were concerned with the speed that could be achieved on the track. Bill France took all of the guys from the prior days race and ran the race with them. People still showed up and the racing went on. The moral of the story is, NASCAR is not going to be bullied by team owners, or drivers. It didn’t happen then and it would never happen today.

]]> By: T.C. http://www.thenascarinsiders.com/2008/12/14/franchising-needs-to-stick-to-stick-and-ball-sports/comment-page-1/#comment-4324 T.C. Tue, 16 Dec 2008 17:35:55 +0000 http://www.thenascarinsiders.com/?p=689#comment-4324 racer61: So with only 43 franchises, now you are limiting the number of teams that can actually exist, and you are hurting some of the competition that has made the sport into what it is today. And you are also creating a massive barrier to entry for any new teams that come along. The only barrier that exists right now is the initial investment. Also, while it may help a little in the sponsorship search, only having 43 teams for 43 spots doesn't guarantee these teams could find sponsors. Petty's #43 was in every race and guaranteed in for every race because they stayed top 35 and had a past champion driving their car. But that didn't and hasn't helped them secure a sponsor for the future. Franchising won't help Petty to continue to exist. If these smaller teams can't sell a winning racecar or driver to sponsors, they need be creative in finding other ways to bring value to a sponsorship. It isn't enough anymore to just have Petty on the sign out front and hope companies will come knocking. These sponsors are spending big money and they want something in return. If they feel they aren't getting it, they will leave. Franchising won't help Petty run better or learn how to handle a sponsorship. And back to owners pulling out. Roush and Hendrick would never pull out of a race for reasons like that, because they have others to answer to. You might convince one sponsor to do it, but not all. AMP, National Guard, DeWalt, Aflac, DuPont, et. al, would be extremely upset to find out their car wasn't on track for a race after they spent $25 million for the season, just because the owners were mad about TV money. And along with that, you would piss the fans off who spent big money to come to a race, only to not be able to see their favorite driver run. I think a lot of the backlash would come back on the teams for pulling out, not necessarily NASCAR. It would create a big nightmare. racer61: So with only 43 franchises, now you are limiting the number of teams that can actually exist, and you are hurting some of the competition that has made the sport into what it is today. And you are also creating a massive barrier to entry for any new teams that come along. The only barrier that exists right now is the initial investment.

Also, while it may help a little in the sponsorship search, only having 43 teams for 43 spots doesn’t guarantee these teams could find sponsors. Petty’s #43 was in every race and guaranteed in for every race because they stayed top 35 and had a past champion driving their car. But that didn’t and hasn’t helped them secure a sponsor for the future.

Franchising won’t help Petty to continue to exist. If these smaller teams can’t sell a winning racecar or driver to sponsors, they need be creative in finding other ways to bring value to a sponsorship. It isn’t enough anymore to just have Petty on the sign out front and hope companies will come knocking. These sponsors are spending big money and they want something in return. If they feel they aren’t getting it, they will leave. Franchising won’t help Petty run better or learn how to handle a sponsorship.

And back to owners pulling out. Roush and Hendrick would never pull out of a race for reasons like that, because they have others to answer to. You might convince one sponsor to do it, but not all. AMP, National Guard, DeWalt, Aflac, DuPont, et. al, would be extremely upset to find out their car wasn’t on track for a race after they spent $25 million for the season, just because the owners were mad about TV money. And along with that, you would piss the fans off who spent big money to come to a race, only to not be able to see their favorite driver run. I think a lot of the backlash would come back on the teams for pulling out, not necessarily NASCAR. It would create a big nightmare.

]]> By: racer61 http://www.thenascarinsiders.com/2008/12/14/franchising-needs-to-stick-to-stick-and-ball-sports/comment-page-1/#comment-4323 racer61 Tue, 16 Dec 2008 16:57:09 +0000 http://www.thenascarinsiders.com/?p=689#comment-4323 Here's how franchising would work: NASCAR would sell 43 franchises, limit of 4 per owner. The teams that attempted all races last year would get first choice followed by a draw or some other method for any remaining spots. This helps the smalller teams because they are guaranteed a starting spot every week. They can tell a sponsor that their car will be in the show every week. No hauling your car out to California only to haul it back on saturday. And if an owner wants to leave or retire he has something of value to sell (the franchises) for years of hard work and supporting NASCAR.(After 61 years Petty has little left and can be replaced by anyone with a car, hardly seems right). As for the owners' growing power, I'm not talking about them starting a new series, but just imagine if Hendrick and Roush got together and said that they would not run a race if there was no TV revenue sharing. A race without Biffle, Edwards, and especially Johnson, Gordon, and the most popular Junior etc.? You think that wouldn't cause NASCAR to panic? Here’s how franchising would work: NASCAR would sell 43 franchises, limit of 4 per owner. The teams that attempted all races last year would get first choice followed by a draw or some other method for any remaining spots. This helps the smalller teams because they are guaranteed a starting spot every week. They can tell a sponsor that their car will be in the show every week. No hauling your car out to California only to haul it back on saturday. And if an owner wants to leave or retire he has something of value to sell (the franchises) for years of hard work and supporting NASCAR.(After 61 years Petty has little left and can be replaced by anyone with a car, hardly seems right).

As for the owners’ growing power, I’m not talking about them starting a new series, but just imagine if Hendrick and Roush got together and said that they would not run a race if there was no TV revenue sharing. A race without Biffle, Edwards, and especially Johnson, Gordon, and the most popular Junior etc.? You think that wouldn’t cause NASCAR to panic?

]]> By: Lunch_Time http://www.thenascarinsiders.com/2008/12/14/franchising-needs-to-stick-to-stick-and-ball-sports/comment-page-1/#comment-4322 Lunch_Time Tue, 16 Dec 2008 16:42:19 +0000 http://www.thenascarinsiders.com/?p=689#comment-4322 Quote from article: "Stick and ball sports make their money through ticket sales and tv deals. In NASCAR, the teams don’t see any of that money." You are incorrect - NASCAR stipulates that a certain percentage of the TV and ticket sales proceeds be included in the prize purse via the sanction agreement. Teams share in the funds based on where they finish on the track. The more competitive a team is, the greater the share of the TV and ticket sales proceeds they collect. Quote from article: “Stick and ball sports make their money through ticket sales and tv deals. In NASCAR, the teams don’t see any of that money.”

You are incorrect – NASCAR stipulates that a certain percentage of the TV and ticket sales proceeds be included in the prize purse via the sanction agreement. Teams share in the funds based on where they finish on the track. The more competitive a team is, the greater the share of the TV and ticket sales proceeds they collect.

]]> By: T.C. http://www.thenascarinsiders.com/2008/12/14/franchising-needs-to-stick-to-stick-and-ball-sports/comment-page-1/#comment-4318 T.C. Tue, 16 Dec 2008 14:59:57 +0000 http://www.thenascarinsiders.com/?p=689#comment-4318 racer61: We've heard and read all about people saying franchising is the way to go. But the question we asked, is how does it work? Give us a feasible plan, then we can decide if its going to work or not. All everyone keeps saying is that it will save the small teams. But how?! Also, owners still have very little power in the sport. Even if a few decided to leave, NASCAR still holds all the cards. Between the France Family and Bruton Smith, they control all the race tracks. NASCAR and the Frances also have all the leverage because they control the TV contract. It would be very tough to start a competing series with no tracks to race at and no TV coverage... racer61: We’ve heard and read all about people saying franchising is the way to go. But the question we asked, is how does it work? Give us a feasible plan, then we can decide if its going to work or not. All everyone keeps saying is that it will save the small teams. But how?!

Also, owners still have very little power in the sport. Even if a few decided to leave, NASCAR still holds all the cards. Between the France Family and Bruton Smith, they control all the race tracks. NASCAR and the Frances also have all the leverage because they control the TV contract. It would be very tough to start a competing series with no tracks to race at and no TV coverage…

]]> By: JT http://www.thenascarinsiders.com/2008/12/14/franchising-needs-to-stick-to-stick-and-ball-sports/comment-page-1/#comment-4316 JT Tue, 16 Dec 2008 14:52:33 +0000 http://www.thenascarinsiders.com/?p=689#comment-4316 NASCAR's attempt at de facto franchising is the Top 35 provisional rule, But it sure didn't help the DEI 01 or 15 teams survive. And prospects for BDR's 22 and RYR's 38 don't look too promising, either. NASCAR’s attempt at de facto franchising is the Top 35 provisional rule, But it sure didn’t help the DEI 01 or 15 teams survive. And prospects for BDR’s 22 and RYR’s 38 don’t look too promising, either.

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