Why NASCAR Is the Most Important Sport in America


Dale Earnhardt Jr. celebrates after winning the Daytona 500 for the first time since 2004.

Baseball may be America's pastime, but NASCAR is far and away its most important sport.

In a country that gets 70% of its GDP from consumer spending, NASCAR's notoriously loyal fan base has long stood atop the podium of the sports world when it comes to supporting corporate sponsors and thereby influencing the direction of our economy.

How NASCAR became a consumer powerhouse
Imagine if Dale Earnhardt Jr. drove about town in the same car that he speeds around the track in on Sundays. Seems ludicrous, right?

It turns out that this idea isn't as farfetched as you may think. Until relatively recently, in fact, this is what NASCAR drivers did -- thus the name "stock" car, which is technically an "ordinary car that's been modified for racing."

Richard Petty's 1970 Superbird.

This was a boon for car manufacturers early on. As NASCAR's prestige and popularity grew, so too did the exposure for car companies like Ford (NYSE: F  ) , Toyota (NYSE: TM  ) , and Chevrolet, which is a division of General Motors (NYSE: GM  ) .

When a high-profile race was won in a particular car, racing fans would flock to showrooms the next day to get behind the wheel of one of their own.

From this pattern came the now-familiar adage, "Win on Sunday, Sell on Monday," which has since proven itself to apply to brands as diverse as 3M's scotch tape, car insurance from Berkshire Hathaway's GEICO, and even web hosting companies like privately held GoDaddy.com.

A one-of-a-kind fan base
Added to this history is the size and notoriously loyal nature of NASCAR's fan base. Roughly 100,000 spectators attend each Sprint Cut event, NASCAR's marque racing series, and millions more watch races at home on TV. By comparison, MetLife Stadium, the venue of this year's Super Bowl, has a capacity of only 82,500 onlookers.

Pound for pound, moreover, it's widely assumed that corporate sponsors get much more bang for their buck from deals with NASCAR as opposed to other sports.

  • Simmons Market Research has reported that 40% of racing fans will switch brands to buy NASCAR-linked products.
  • A 2013 study conducted by online research firm Toluma found that one in four NASCAR fans "strongly agree" that they support the sport's sponsors more than those of other sports.
  • And according to The Daytona Beach News-Journal, Ford's research shows that a staggering 40% of its new vehicle buyers are race fans, with about 85% of those being fans of NASCAR.

"Fans understand the importance of sponsorship to the sport. They realize that's what makes the sport go," says Steve Phelps, NASCAR's chief marketing officer.

The generation five debacle
It's for this reason that carmakers were likely disillusioned from a marketing perspective when NASCAR adopted a "safety first" approach to car designs in 2007. The move was prompted by the fatal accidents that killed Kenny Irwin Jr. and Dale Earnhardt in 2000 and 2001, respectively.

As a result of design changes, so-called "generation five" cars were ensconced in uniformly shaped bodies, eliminating any immediately discernable brand association.

"Car manufacturers were left without an opportunity to flex their design muscles, and their race cars bore little resemblance to their consumer vehicles," wrote Matthew Rocco with Fox Business News last year.

The Ford "Gen-6" Fusion.

After receiving a "tepid reaction from drivers and fans," NASCAR reverted back in 2013 and began allowing car manufacturers to reintroduce design elements that allow the racecars to more closely resemble their consumer counterparts. Appropriately, these are christened "generation six."

Toyota's vehicles take their cue from the Camry. Ford's are based on its popular Fusion brand. And Chevrolet's follow the design lead of its SS model.

With only a year under the belt, so to speak, it remains to be seen whether this reversion will ultimately pay off for car manufacturers -- or, for that matter, any of NASCAR's other corporate sponsors.

For what it's worth, the Ford Fusion certainly appears to be basking in the limelight, with annual domestic sales in 2013 increasing by 54,000 units, or 22%. At the same time, however, sales of the Toyota Camry were up by only 3,375 units, or less than 1%. And the Chevy SS was only just recently launched so comparable sales data isn't available.

Dale Earnhardt Jr., the Daytona 500, and the NASCAR consumer
While it may be too early to ascertain the impact of generation six vehicles, there's one huge development that could herald a new era for NASCAR, its fans, corporate sponsors, and by implication the American economy.

On Feb. 23, a certain Dale Earnhardt Jr. broke a 55-race winless streak by driving his Chevrolet to victory at the Daytona 500, the equivalent of the Super Bowl in the racing world. It had been a decade since he last (and for the first time) won the event.

Despite poor viewership ratings thanks to a record six-plus hour rain delay, the fact that the sport's favorite driver and reigning member of a racing dynasty prevailed is the best hope yet that the NASCAR consumer will fully awaken from its financial crisis-induced slumber and drive both the racing world and the American economy forward.

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Read/Post Comments (18) | Recommend This Article (19)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 28, 2014, at 11:23 AM, Amp482 wrote:

    I believe NASCAR is important simply because it is the last of major sports in the USA where you don't see them being arrested every other day for serious crimes or making total fools of themselves

  • Report this Comment On February 28, 2014, at 11:37 AM, KayakerRW wrote:

    Amp482, That's ironic because many early NASCAR drivers started by breaking the law hauling moonshine.

    I do have a slight acquaintance with one former NASCAR driver who is very grateful for being able to earn large paychecks at a young age and who has donated generously to his community (money and time).

    I had noticed that NASCAR fans are passionate about their brands, and I've read that Super Bowl ads (despite all the attention they get) often do not translate into better sales for companies; whereas NASCAR sponsorships do help.

  • Report this Comment On March 01, 2014, at 12:11 PM, scitracker wrote:

    NASCAR is the one sport most Americans can easily identify with, by their on-street driving habits. Not too many Americans running out every day and passing a football 50 yards, dunking a basketball or hitting a home run, but everyone can slide behind the steering wheel, hop on the freeway and drive 70-90 mph imagining they are Dale Earnhardt, Jr. I keep telling our state governor the easiest way to eliminate any budget deficit, is to set up a permanent moving speed trap on any major highway.

  • Report this Comment On March 01, 2014, at 12:37 PM, joe6464 wrote:

    As a long time NASCAR fan, I find most of your article accurate, but there is one glaring misconception. You say that "Until relatively recently, in fact, this is what NASCAR drivers did" when talking about a driver driving around town in his race car. "Relatively recently"??? That hasn't been true for about 60 years.

  • Report this Comment On March 01, 2014, at 1:19 PM, johnluma wrote:

    Great article with a lot of useful background info on NASCAR. But I need to have some fans here TELL ME THE EXACT APPEAL OF NASCAR racing. ??? What is it? The cars mostly look the same, still. The drivers are not clearly seen, as stars in other sports often are (but not always). It's an oval with speeds that rarely change. Is NASCAR appealing because of identity with the lifestyle? Of being a part of longtime American racing tradition? What is it that "drives" fans to fill the stands and tune in to TV? What's the exact, special appeal?... Thanks.

  • Report this Comment On March 01, 2014, at 1:44 PM, joe6464 wrote:

    to johnluma: with all due respect, it is obvious by your comments that you seldom, if ever, actually watch NASCAR racing. All of what you say is inaccurate. Perhaps you based what you said on watching decades ago. NASCAR has changed drastically in the past 20 or 30 years. You say drivers are not clearly seen... If you watch a telecast, many are interviewed before the race and often after the race, some are even talked to while in their cars. A driver can hit the wall at 160mph and be asked about it on TV 10 minutes later. Also, drivers have real personalities, and it is easy to get to know them. They constantly interact with fans, at the track and other events. They sign autographs... for free. The cars do not just go around ovals at the same speed. There are many variables at each track including shape, length, banking, track surface, etc. This is unlike any other sport where the dimensions are the same. While it is true that parts of the race are dull (this happens in all sports) the beginning and end of the race are usually very exciting. As with most sports, to give it a fair shake you should watch events all the way through, try to understand what is going on, and root for a driver or two. Do this for a month or to, with an open mind, then maybe you will get it.

  • Report this Comment On March 01, 2014, at 2:27 PM, Kcearnest wrote:

    NASCAR a SPORT, since when?

  • Report this Comment On March 01, 2014, at 2:34 PM, joe6464 wrote:

    your ignorance and prejudice are showing

  • Report this Comment On March 01, 2014, at 3:34 PM, johnluma wrote:

    Joe6464: Fair enough. Thanks for the clarification. I'll follow your suggestion and stay with it longer than the number of occasions I have at 10 or 15 minutes.

  • Report this Comment On March 01, 2014, at 5:44 PM, cmalek wrote:

    @johnluma:

    The appeal of NASCAR is the same as any other sport, the COMPETITION.

    @joe6464:

    Dimensions in other sports are standardized so that results at different venues can be compared directly and records (world/national/local/meet) can be established. In NASCAR, performance at Talladega cannot be compared to one at Charlotte which cannot be compared to one at Daytona.

  • Report this Comment On March 01, 2014, at 6:35 PM, colleran wrote:

    You headline should read 'Why NASCAR Is the Most Important Sport in America FOR AUTO MANUFACTURERS' Other than that it, it certainly is not.

  • Report this Comment On March 01, 2014, at 7:55 PM, joe6464 wrote:

    Thank you johnluma. That's all that I ask

  • Report this Comment On March 01, 2014, at 8:02 PM, joe6464 wrote:

    to colleran: since this website is mostly about business, and there is no doubt that NASCAR fans are very loyal to the brand their driver promotes, then it is most important to business. Companies like Lowes, Budwieser, McDonalds, Fastenal, Miller and many other big companies pay upwards of $25 million to have their brand plastered all over the car of the team they sponsor each year. There is even a company that calculates how many minutes the sponsors car appears on TV and translates that into ad costs.

  • Report this Comment On March 02, 2014, at 11:23 AM, Kirk42 wrote:

    Also missing is the HUGE amount of B2B that goes along with NASCAR sponsorship. A lot of companies that you see on the hoods (as a primary sponsor) or on other parts of the cars or fire suites (associate sponsors) aren't even there to sell to the fans. They are there to sell to the other companies involved in NASCAR. NASCAR even holds meetings of sponsors where folks from the various companies get together to pitch to each other. There's a huge "private" market going on in the sport that's worth quite a lot. That's why companies like Caterpillar have been in the sport as long as they have. Other examples include motor oil companies who are there to get auto dealers and other companies.

    As for NASCAR as a sport, driving that fast for that long is very physically and mentally demanding. Drivers can lose 20lbs of weight during the course of a 500 mile race. Many of the drivers (such as Jimmie Johnson) do things like run marathons for fun and charity. Even drivers like Tony Stewart work to stay in "racing shape".

    And then there are the pit crewmen. The over-the-wall group in the top teams are professional athletes in every sense of the term. Those 12-14 second pit stops are all they do on the team, during the week they train and practice in the team athletic complexes with their professional trainers. These guys work like crazy to shave 10ths or even 100ths of a second off of changing a set of tires because it can decide a race.

    Like a lot of motorsports, it looks kine of boring the first time you see it, it is a bit of an acquired taste. But NASCAR can be a lot of fun.

    Oh, and it's one of the few sports where being at the event is FAR better than watching at home on the TV. Often times the best racing on the track is not occurring at the front, it's 5 guys fighting like crazy over 15th place, or 2 guys trying to stay the first car one lap down.

    Kirk

  • Report this Comment On March 02, 2014, at 12:51 PM, Bikeryder wrote:

    I grew up watching NASCAR on Sundays with my dad. I continued to be a casual fan as a young adult until I attended my first race. From the front row at Pocono, you can see the cars sliding all 4 wheels up to the wall coming out of turn three. THAT WILL HOOK YOU. The skill to do that turn after turn, lap after lap at incredibly high speed, past the point of traction is amazing to watch. So Johnluma, if you want to really feel what NASCAR is about, get to a race. You won't regret it.

  • Report this Comment On March 03, 2014, at 12:42 AM, jimdandy wrote:

    NASCAR stands for:

    N on

    A thletic

    S port

    C entered

    A round

    R ednecks

    There is no real sport in it. The cars are all basically the same. Nothing like it was 30 years ago when the different car manfgrs actually had cars to race. Most of the drivers today don't even know how to check the oil!!! Give us a break!!

  • Report this Comment On March 07, 2014, at 2:54 PM, Kirk42 wrote:

    jimdandy,

    You're total lack of clue is amazing. You have no idea what you are talking about.

    If you invest with the same level of knowledge and understanding you showed here, I'd probably make a mint taking the other side of your trades.

    Most of the top drivers in NASCAR know a great deal about their cars and how they work. Many of them came up working on their own cars in lower levels of racing.

    NASCAR doesn't allow telemetry during races. So the only way the crew chief knows how to adjust the car is based on what the driver tells him verbally over the radio. The best drivers know the car inside and out and can tell exactly what is going on as the car goes around the track.

    Drivers who just show up to drive don't do well in NASCAR. That's why open wheel drivers generally do poorly when they try to cross over.

  • Report this Comment On March 10, 2014, at 9:41 AM, rocinanate3d wrote:

    I watched NASCAR before it was big. I watched it way back in in the mid-70's. My favorite racers were Tiny Lund, Cale Yarborough and others. It appealed to me back then because they were driving faster than I could. They made me understand the technical nature of the automobile.

    But in terms of being a fan of the sport I don't see the appeal. Its mindlessly driving around a circular track which is my flawed interpretation. I much prefer the track of a Formula I, it looks somewhat similar to a normal street.

    In terms of economics and a bottom line difference to the promoters, I don't see the difference. Sunoco is the official fuel provider to NASCAR. It wouldn't make me go and buy Sunoco gasoline. Does it make other people go and buy Sunoco gasoline?

    In terms of sponsorship by Ford, Chevy or Toyota does it make a difference to me. Probably not, I would buy a car that makes sense to me. It might be these 3 or it might be a Subaru.

    I think NASCAR as an entity is profitable and well run. But does it translate into profits for the sponsors, I think it is debatable.

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