NASCAR and Detroit

I read with interest this article at on the troubles facing NASCAR and the Big Three automakers. An interesting reaction to the article is here.

I always enjoy popular press that is loaded with explanations for the way the world is because those explanations are often testable hypotheses masquerading as fact. Here are a couple of examples:

Attendance at races dropped drastically in 2008 (in large part because steep gas prices this summer curtailed the RV armada that follows the circuit), and TV ratings declined for the third straight year. The season-ending “Chase” has failed to provide fireworks or closure—if not for the BCS, it would be the worst playoff system in sports. There’s also a growing disconnect between racing and its hardcore fan base that began when the Frances stripped races from traditional tracks in Rockingham, N.C., and Darlington, S.C., in favor of places like Kansas and Las Vegas. And the most visible part of NASCAR, the driver corps, has morphed from a crew of heroic-yet-relatable, older, mostly mustachioed hell-raisers to an interchangeable posse of corporate-ready drones fresh out of driver’s ed.

But NASCAR’s biggest problem isn’t fixable with a couple of sexy drivers or a breathless season finale in Miami. The sport can’t escape the fact that the internal combustion engine and fossil fuels are technologies on a steep downslope. With hybrids and electrics on the way in, it’s hard to see where gas-guzzling, emission-belching stock cars fit in.

So, is NASCAR’s problem high gas prices, uninteresting drivers, bad management decisions (moving popular races, moving out of popular areas, mandating changes to cars, an odd organization to the championship), or the down slide of the internal combustion engine? Surely all of these have been problems for NASCAR. Possibly better management decisions would have helped NASCAR be in a position to deal with gas prices and technological change. Indeed, better management decisions, those that are less proscriptive but allow greater flexibility and which do not try to push NASCAR too far outside its base may be enough to get it through the current problems.

Technological issues are really not that hard to deal with. Let the teams decide what technology they are going to use but handicap cars based on technology choices if doing so is necessary to give different technologies equal chances of winning. Other sporting events handicap or penalize contestants. Equestrian events use time penalties for missing jumps or knocking down barriers. In some horse races, horses have to carry additional weight to equalize the competition. It is true that such changes would alter the way races are conducted to some extent and it is not known how fans would react. However, changes that give added flexibility and opportunities for innovation to the race teams seem a better approach than relying on a bailout of the auto industry or in further top-down dictates about cars.

Similarly, changing the business model may be a wise idea. Struggling companies often go through restructuring to build on what is solid and prune away the unproductive operations. NASCAR may need to move away from the single entity league model under which it is largely a family owned business.

So, let’s not debate whether or not NASCAR is worth salvaging and if bailout money from the car manufacturers should go to racing. Instead, let’s encourage NASCAR to reorganize, rethink, and even re-invent itself to be successfully reach out to the next generation of racing fans.

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Author: Dennis Coates

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