National Association for Stock Car Auto Racing - Company Profile, Information, Business Description, History, Background Information on National Association for Stock Car Auto Racing

1801 W. International Speedway Boulevard
Daytona Beach, Florida 32115

History of National Association for Stock Car Auto Racing

The National Association for Stock Car Auto Racing, known as NASCAR, is the official sanctioning body for the sport of stock car racing. Stock car racing is a competition between cars that use standard auto bodies instead of specially designed exteriors. Stock car racing had a tremendous rise in popularity in the 1990s, and it is now the second most popular televised spectator sport in the United States, second only to major league football. Branching out from its base in the South, NASCAR runs races at tracks across the nation. Its Winston Cup series draws over six million fans annually, and 17 of the top 20 best-attended sporting events in 1998 were NASCAR races. The company brings in revenues through racing fees, licensing of its name, corporate sponsorships, and television rights. The company is privately held by descendants of its founder, Bill France.

Early Years

Stock car racing as a sport developed out of the need for fast and efficient delivery of illegal alcohol. The earliest racers were actually drivers for bootleg whiskey made in the Appalachian mountains of the American South. Homemade whiskey was a profitable sideline for poor farmers in Appalachia, who were able to sell their goods in urban centers when Prohibition made alcohol production illegal in the United States. Prohibition lasted from 1919 to 1933. Yet even after 1933, so-called moonshine remained in high demand, as it was inexpensive. Homemade alcohol was called moonshine because it was made at night, in order to avoid detection by federal revenue agents. The government levied high taxes on legal alcohol production, and the moonshiners sought to avoid paying. By the 1930s, a running battle between federal agents and moonshiners was underway, carried on up and down steep mountain roads between midnight and dawn. The distillers worked hard on their cars to give them speed and power, and built in features that helped them handle the cruel curves of the Appalachian roads. The cars themselves became the subject of folk legends, bearing names like the Black Ghost, the Grey Ghost, and the Midnight Traveler. The moonshine drivers were exceptionally skilled, and eventually they wanted to compete with each other in the daylight. The first such race was held in 1937 in Stockbridge, Georgia, and soon the sport was drawing thousands of spectators. Races were held on dirt tracks, which were usually officially horse racing ovals, although sometimes races were held in a plowed field. The most famous racers of the 1930s were all bootleg whiskey drivers, including Fonty Flock, Buddy Shuman, and Junior Johnson. The sport was rough, dirty, and apparently exhilarating. But it was not organized in any way until the intervention of Big Bill France.

Big Bill was born William Henry Getty France, the son of a banker from Washington, D.C. In the 1920s, Big Bill dropped out of high school in order to build and race cars in suburban Maryland; he also became a skilled mechanic. By 1934 France had a wife and a young son, and he decided to move the family to Florida for the warm weather. Originally headed for Miami, the family stopped off in Daytona Beach, and settled there instead. Daytona Beach was a haven for racers, who used its hard-packed beach as a speedway. Drivers from all over the world descended on Daytona to race. In 1935 Sir Malcolm Campbell, the most famous English racer, attempted to set a land speed record of 300 miles per hour at Daytona Beach. His attempt was foiled by strong ocean winds, and the next year, he and the world's other leading drivers moved from Daytona's speedway to the open desert of the Bonneville Salt Flats in Utah. Speedweek, as the Daytona event was called, was a huge financial boon for Daytona Beach, bringing in thousands of tourists. The city organized races in 1936 and 1937, but without the big stars, both of these lost money, and the sport seemed doomed. Bill France at that time was not only a stock car driver but also owned a gas station and mechanic's shop favored by other racers. The Daytona Beach Chamber of Commerce approached France about organizing a 1938 race, and France gladly stepped in. He booked a date, signed up drivers, and solicited local businesses for prizes, which included such items as a case of beer and a box of cigars. Tickets went for 50 cents each, and the race drew 4,500 spectators. The first race was a success, and France began planning for the next one. By 1939, he had organized a set of basic rules and found more local sponsors. With ticket sales raised to $1, he was able to pay his costs as well as rake in several thousand dollars profit.

Big Bill's adventure in race promoting came to a halt when the United States entered World War II and he was commissioned to work in a shipyard. After the war, France returned to Daytona and tried to pick up where he had left off. He lacked the financial backing to put a race together in Daytona, but he decided to sponsor a 100-mile national championship stock car race at a track in Charlotte, North Carolina. However, journalists France approached were uninterested in writing about a supposed 'national championship' when there were no national rules governing the sport. Other problems plagued stock car racing as well. Each track made its own rules, so drivers frequently had to re-fit their cars to meet differing standards, and owners were often unscrupulous, absconding with prize money before the race was over. France added legitimacy to his sport by forming his own national sanctioning body, named the National Championship Stock Car Circuit (NCSCC), and set up a point system for drivers and a prize money fund. He ran the 1947 season under the NCSCC auspices. The next year, France wanted to expand the NCSCC's powers, giving it governing authority over all the major Southern tracks. He gathered 35 major racing figures in a Daytona hotel room to hammer out the specifics of the organization in December 1947. The following year the group incorporated as the National Association for Stock Car Auto Racing, with four stockholders, including Big Bill, who was elected president.

NASCAR in the 1950s and 1960s

Stock car racing grew into a tremendously popular sport in the South in the 1950s and 1960s. France was a visionary promoter, and he was aided by track owners who wanted NASCAR's sanctioning to make their races official. A new raceway was built in Darlington, North Carolina, by a local entrepreneur, and NASCAR sanctioned the track's first Southern 500 race in 1950. The track was built to hold 9,000 spectators, but its first event drew a crowd of 25,000. Five years later, the Southern 500 had become the biggest sporting event in the entire South, drawing a crowd of at least 50,000. Attracted by Darlington's success, other track owners upgraded their raceways or built new ones. The sport remained rough and dangerous. To control unruly crowds in the infield, local sheriffs would set up a temporary jail inside the oval. This was easier than dragging offenders across the track. France wanted to move the sport away from small dirt tracks and run races at more modern, paved raceways like Darlington. The speedway at Daytona Beach had been deteriorating for years, and after several seasons of running a "last" race at the beach, France convinced the city to let him build a paved, 2.5 mile speedway, breaking ground in 1957. Big Bill went deeply into debt, but his gamble paid off when the track opened in 1959 to a crowd of 42,000, rivaling Darlington's draw.

In the 1960s, many new speedways were built. There were perhaps a hundred different dirt tracks across the South by the early 1960s, and NASCAR sanctioned more than 50 races during the season. In 1960 builders in Atlanta opened the Atlanta International Raceway, and Charlotte, North Carolina, saw the inauguration of the Charlotte Motor Speedway. A year later Bristol Speedway debuted in Bristol, Tennessee, and in 1965 promoters built the North Carolina Motor Speedway in the Sandhills area of that state. France busily promoted races and certified cars and drivers. In 1969 major tracks opened in Michigan and Delaware, expanding the geographical reach of the sport. As stock car racing became bigger business, NASCAR reached out to corporate sponsors to provide purse money in exchange for advertising. In the early 1950s France had signed up the big Detroit automakers as sponsors, and other loyal backers of the sport included tire companies and other automotive-related businesses. NASCAR's business was quite lucrative, as it received sponsorship money from corporations, while track owners were responsible for the expenses of running the track. NASCAR organized and promoted the races and handled logistics. Its responsibilities included qualifying drivers, keeping records of the point system, and declaring winners.

Second Generation Takes over in the 1970s

As stock car racing grew, Big Bill France found himself hard put to keep up. Besides his track at Daytona, France had invested in another at Talladega, Alabama, which meant that he had less time to run NASCAR. He ceded the business to his son Bill, Jr., in 1972. Big Bill was 62; his son, 28. Bill Jr. made immediate changes. Most importantly, he found a new corporate sponsor for the races in the R.J. Reynolds tobacco company, which had been banned from advertising on television. In 1971 R.J. Reynolds agreed to sponsor a 500~mile race at Talladega called the Winston 500, after its leading cigarette brand. In 1972 Reynolds asked for a bigger role in NASCAR. It wanted the company to reduce the total number of races in the season from around 50 to just 31 so that the season would be shorter and more fans would concentrate at each race. In exchange, Reynolds offered major prize money, including a $100,000 bonus to be split among the season's top racers. It also took over the job of promoting the Winston Cup series races.

NASCAR continued to expand. It penetrated into the Northeast with tracks in Pennsylvania and New York. The sport grew in popularity, fueled in part by the explosive personalities of the star drivers. Leading racers such as Carl Yarborough, Richard Petty, and Bobby Allison grew in fame beyond the confines of the South as racing fans were drawn from a larger cross-section of the United States. With the rise of new, paved tracks in the 1960s, the infield brawling of the sport's early years mostly passed. Women fans became increasingly prominent, and the Winston Cup saw its first female driver in 1976 in the person of Janet Guthrie, a former University of Michigan physics major. In 1979 NASCAR reached a major milestone when it convinced the CBS television network to broadcast a championship race. The Daytona 500, the first televised NASCAR race, drew approximately 16 million viewers, or twice the audience the network had expected. NASCAR took ten percent of television revenues, so this was an extremely important revenue stream. The cable sports network ESPN began broadcasting Winston Cup races in 1981, and by the 1990s all three major networks ran NASCAR races.

Marketing in the 1990s

Though explosive growth seemed to have characterized the sport all through its existence, in the 1990s stock car racing was a juggernaut, becoming not only the fastest-growing sport in the country but finding itself second only to major league football as a spectator sport. Attendance at the championship series Winston Cup races grew more than 65 percent between 1990 and 1996, with average attendance in the late 1990s ranging from 100,000 to 150,000. In the early 1990s, NASCAR was still run very much as it had been when the company started. The bulk of its revenues came from sanctioning fees, which each track paid in order to have an official NASCAR race. The number of races had grown tremendously, with nearly 150 U.S. racetracks holding NASCAR events and additional tracks in Japan, for a total of more than 2,000 events. NASCAR's marketing staff in 1991 comprised only three people, as most of its promotion was handled by R.J. Reynolds.

When the third generation of the France family entered the business in the early 1990s, the company began to find more ways of bringing in money. Brian France, Bill, Jr.'s son, became head of marketing in 1991. In 1990, fans spent approximately $80 million on licensed NASCAR merchandise, and NASCAR itself made roughly $1 million off licensing fees. Brian France worked to increase NASCAR's licensing revenues by putting the NASCAR name on more items. Not only T~shirts, but also car batteries and Barbie dolls soon could be found emblazoned with the NASCAR name and logo. The company opened a licensing division in Huntersville, North Carolina, in 1995. The original staff of six had grown to more than 20 a few years later. In 1996 NASCAR sold rights to Gaylord Entertainment, a Tennessee entertainment and media firm, to operate and manage a chain of stores selling NASCAR goods. The chain, NASCAR Thunder, opened in Atlanta and in Winston-Salem, North Carolina, and soon expanded to other locations. By the end of the 1990s, NASCAR's revenue from licensing fees had grown to approximately $35 million annually. Sales of licensed goods had grown to $1.1 billion. Brian France also endeavored to bring more corporate sponsorship money directly to NASCAR. Previously, most sponsorship money went to racers, whose cars then advertised the company backing them. Brian France convinced major corporations such as Coca-Cola, Visa, and Anheuser-Busch to become sponsors, with approximately $45 million in 1999 going directly to NASCAR. Big Bill's grandson also worked to negotiate better television rights for NASCAR. At the time, NASCAR races were shown on all three major networks as well as cable stations, and each track worked out its own deal with whichever station it wanted. This meant that races were shown on many different channels, and NASCAR had little bargaining leverage. France wanted to consolidate television rights so that races would be broadcast by fewer stations. This move was expected to increase the amount NASCAR brought in from broadcast rights, from $10 million to possibly four times that much.

As NASCAR prepared to enter the 21st century, its phenomenal growth did not seem to be slowing. It was reaching more fans than ever through television and at more and more live events as tracks continued to be built across the country. It had changed from a lowly, dirt-track sport to a polished form of mass entertainment that appealed to entire families. Seventy Fortune 500 companies were NASCAR sponsors to some degree. The sale of licensed goods continued to rise, bringing in revenue not only to NASCAR but also to other companies such as Action Performance, Inc., which made NASCAR collectibles. Stock car drivers continued to be as charismatic as the colorful figures of the 1940s and 1950s, and leading racers from the 1990s such as Dale Earnhardt, Jeff Gordon, and Rusty Wallace were heroes to young fans. Profit margins for NASCAR were estimated to be as high as 35 to 40 percent in the late 1990s, and it seemed evident the company would continue to prosper as stock car racing captivated an ever wider audience.


Additional Details

Further Reference

Bernstein, Andy, "In the Driver's Seat," Sporting Goods Business, May 12, 1997, p. 60.Fleischman, Bill, and Al Pearce, The Unauthorized NASCAR Fan Guide '99, Detroit: Visible Ink Press, 1999.Friedman, Wayne, "NASCAR Opens Drive for More Profitable Sponsorship Deals," Advertising Age, March 22, 1999, p. 22.Hagstrom, Robert G., The NASCAR Way, New York: John Wiley Sons, 1998."NASCAR Thunder Revs Up," Chain Store Age Executive, October 1996, p. 78."Numbers Reflect NASCAR's Growth," Knight-Ridder/Tribune Business News, April 6, 1998.Spiegel, Peter, "Southern-Fried Dynasty," Forbes, October 11, 1999.

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