Business in Racing: Bad news for tracks, good news for fans?
Fans head into the track for a NASCAR Sprint Cup race. // LaDon George, NASCAR Scene
Related stories: Ticket prices and merchandise sales among ISC priorities as revenues drop
COMMENTARY
Bad news for tracks may be good news for fans.
International Speedway Corp., the largest track operator in NASCAR, offered some sobering results during its third-quarter earnings call with financial analysts.
Company executives confirmed what can be seen at almost any NASCAR event these days: fewer fans and more empty seats. The trend began before the recession but accelerated after the economy soured.
Now, ISC is fighting through the lean times with promotions, incentives and discounted ticket prices. Company executives made it clear that fans should expect to be wooed with even more enticements in 2010.
“We need to be creative and aggressive in getting our fans to purchase tickets and if possible getting them to purchase the tickets sooner,” said John Saunders, International Speedway president.
The company owns or operates 13 tracks and controls 54 percent of the Sprint Cup race dates, including the Daytona 500. Discounts in 2009 have led to an overall 2 percent drop in prices for Sprint Cup races at ISC tracks this year.
Ticket prices next season are expected to drop by another 3 to 5 percent, on average. In total, the company expects to have lower prices on 500,000 seats, representing about one-third of the company’s tickets.
Blame for the sluggish sales falls on a familiar foe: the economy. Track operators say fans are waiting much closer to race day to make buying decisions. Advanced sales — those made more than three or four weeks before a race — have declined by 25 to 30 percent at ISC through the company’s first three quarters. And the company expects a similar response from fans next year, too.
It’s a trend companies such as ISC and rival Speedway Motorsports Inc. dread for several reasons.
When fans wait longer to buy, they can be swayed more by weather and scheduling conflicts that may persuade them against buying tickets. For the track operators, advanced ticket sales can also mean less worry and lower costs for advertising and marketing blitzes.
To chip away at those problems, ISC is trying several things. The company has emphasized ticket renewal incentives to reward its most loyal customers — and keep them coming back.
Some of the offers include all-you-can-eat programs with the purchase of a ticket, gas cards, extended payment plans and other add-ons. To entice families, ISC has created kid-friendly offers such as half-price tickets for children 12 and under at Richmond and free general admission seats for kids at the company’s Michigan track.
One of the biggest challenges for sports leagues and teams is offering discounts and promotions aimed at boosting attendance without crippling prices to the point that fans begin waiting longer and longer to buy in hopes of finding an even better deal.
ISC believes it can avoid those pitfalls. Tracks won’t offer additional discounts as race day approaches, Saunders said. Instead, the company wants to make sure the best offers go to the loyal fans who come year after year and who renew their seats early. That could prove to be a test of discipline in 2010 as economists forecast continued unemployment problems and tight-fisted consumer spending.
Attendance woes hurt more than ticket revenue, of course. (International Speedway’s ticket revenue for the first three quarters of 2009 fell by 17 percent from 2008.) Fewer people means fewer cars paying to park, fewer T-shirts and hats sold and fewer people to eat and drink at the concession stands.
Those problems have been exacerbated by a drop in corporate spending, as well. Companies are under pressure to watch expenses and avoid glitzy client entertainment. The result has been fewer luxury suite rentals and less wining and dining at NASCAR races and other sporting events.
In other words, now more than ever, fans and companies can play let’s-make-a-deal when they’re thinking about a day at the races.
