THE CRUCIAL LESSON NASCAR HAS FOR HORSE RACING

About ten years ago, speakers at horse-racing business conferences would sometimes point to NASCAR as a model for horse racing to follow to increase its popularity.  According to them, the marketing gurus behind NASCAR had the right formula for attracting and keeping fans.

How times have changed.

For example, CNBC published an article on May 27, 2018 titled “The Rise and Fall of one of the Biggest Sports Leagues in the U.S.”  It said: “Americans have been swiftly falling out of love with NASCAR. The iconic US sports league has had an undeniably rough few years, from a rapid drop in TV ratings, to sponsor attrition.”

Then, on July 7, 2018, CNBC published a second article, by MacKenzie Sigalos, with the headline “Here’s What Went Wrong with NASCAR.”  An excerpt from the article reads:

[NASCAR’s] been losing TV viewers.  It’s having trouble filling the stands, even after losing tens of thousands of seats from its stadiums.  And perhaps most worrisome of all, it’s losing sponsors, and those that remain are paying less than they used to.”

The author attributes NASCAR’s decline in some measure to “straying from the brand.”

“It’s partly to do with the fact that it’s alienated its core stock car racing fan.  In a bid to attract a new kind of audience, NASCAR moved into trendier markets in the ’90s.  NASCAR built superspeedways in Las Vegas and Southern California–and shut down some classic venues in America’s southern states.  But the move to be nimble with the brand backfired.  The new crowds didn’t convert into the die-hard loyalists that the sport needed.  Former NASCAR executive Ramsey Poston says the league was trying to enter new markets without the Southern stigma–a move that he calls a mistake.”

NASCAR’s misguided marketing strategy has a significant lesson for racetrack executives.  In brief: “Don’t alienate your core supporters.”  While it is certainly imperative for horse racing to cultivate fans for the future, too much emphasis on this approach can lead to the unintended consequence of not catering enough to its most valuable customers.  Horse racing’s revenues and profits derive from people placing bets and the vast majority of pari-mutuel handle comes from a relatively small proportion of bettors.

NASCAR mistakenly tried to escape its “Southern stigma” and horse racing sometimes attempts to downplay its gambling roots.

Copyright © 2018 Horse Racing Business

 

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