Why NASCAR Is the Most Important Sport in America

When it comes to a massive and exceptionally loyal fan base, NASCAR is without equal. But despite this, racing fans and consumers have yet to fully awaken from a financial crisis-induced slumber. Motley Fool contributor John Maxfield discusses this and whether or not Dale Earnhardt Jr.'s long-overdue victory at the Daytona 500 will serve as the much-needed agent of change.

Feb 28, 2014 at 11:09AM

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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John Maxfield has no position in any stocks mentioned. The Motley Fool recommends Ford and General Motors. The Motley Fool owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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