It’s a trend that seems to be picking up speed…NASCAR’s attendance is in the skids — even in the heart of NASCAR country. The decline has led NASCAR to re-evalute its rules, track owners to revamp facilities and Irwindale Speedway to cancel its 2012 season.
Given this trend, one has to wonder about the economic viability of a new racetrack in Minnesota – a locale not without NASCAR fans yet far removed from sport’s southern roots.
A study (nascaruncertainty11) by the UNC Charlotte and Western Kentucky University reports NASCAR attendance and TV viewership has declined since 2005, a factor independent of the price of gasoline and unemployment. They suggest empirical evidence shows that the declining competitive balance among drivers and racing teams might have been the common factor that reduced both television audiences and race attendance.
In its conclusion, the study states: “While it is entirely possible that the economic slowdown of 2008 and 2009 might have reduced attendance to NASCAR races as suggested by many commentators, the evidence found here is that the price of gasoline and the unemployment rate did not materially impact attendance and therefore either the drop in attendance is not large enough to be detected with standard statistical techniques or the macroeconomic influences that reduced attendance were not correlated with either the price of gasoline or the level of unemployment.”
Other sources suggest that the declines can be attributed to the changes made by NASCAR to increase driver safety after the death of Dale Earnhardt have taken the thrill out of the sport. Fewer crashes = fewer fans.
Of course, it’s hard to deny the economy has had an effect as well, as stated in this story and this from Forbes: “NASCAR’s attendances crashes as economy gets worse.”
This story from National Public Radio (March 21, 2012) suggests the decline is a result of the younger generations taking greater interest in technology and flashier stuff than cars. Teenagers’ one-time love affair with souped-up cars has grown cold, affecting the sport of racing and its future.
All this does not bode well for the sport and businesses associated with it. According to CNBC.com, the five-year projected earnings per share (EPS) growth rate for the two major racetrack ownership interests, Speedway Motorsports Inc. and International Speedway Corporation, is -25.9% and -17.73%, respectively.
With projections such as that, those companies, and any company associated with racing would be a poor investment. I, for one, hope that any financier considers these statistics before investing in IMEDC.
Other headlines on the subject are many. Here are a few more:
“Dover has lost roughly 45% of its attendance in the past five years. Dover’s not alone in the battle either, as tracks across the nation have struggled to fill their gigantic grandstands built in the late-90s boom.” Yahoo Sports, May 17, 2011
Brickyard 400 attendance becoming a major concern, August 1, 2011
**Thanks to Township resident Vicki Heisler for her help with this post.