On Television Partners and Contracts…


One of the most basic tenets of economics is that agents make decisions rationally. And though this assumption is almost always broken in reality, rational expectations provide a good base for discussion in business deals. I’ll be writing about that “starting point” of NASCAR’s search for television partners today. Money obviously comes into play and can complicate the process, but knowing which networks will promote NASCAR the most and reach out to potential new fans is necessary to assess future interest. This entry establishes which networks have been the most reliable partners with NASCAR’s top series.

Similar to last week, I recall a couple of portions from the ratings prediction model I created in a previous NASCARnomics entry. The following chunk of the model is related to how the Cup Series’ partners marginally impact the household T.V. ratings:


Let’s make sure to understand what the model is implying before examining some visual aids. Recall that the first network listed is the one to which we initially compare other channels. So let’s compare the present-day ABC station to, say, NBC. The coefficient next to NBC is 0.070. In other words, all other race traits being equal, NBC attracts a household audience that is 7.0% greater than the current edition of ABC [ 0.070 * 100 ]. That’s the beauty of regression modeling — I can compare television stations’ relative popularity even though they appeared in different “eras” of the sport.

What about a couple of cable stations down the list? I simply subtract one from another when I’m not interested in the baseline result. For example, TNT draws a Nielsen household rating that is 8.6% less than what ESPN garnered in the 1990s. I calculated that number by the following method: [ (-0.240 - -0.154) * 100 ].

So that’s a pretty handy list of numbers. You can impress your friends, too, by telling them that CBS attracted the widest household audience, ceteris paribus, in our sample period. But what about all of the networks’ individual contributions to television ratings on one convenient graph? Well, here you go:


The most notable comment from this visualization is that over-the-air networks draw a far bigger audience than the cable channels, all other characteristics equal. The lowest-rated network still outpaces the greatest cable partner by about 12.5%. This makes sense in practice, too. Over-the air networks are in more television households than cable stations. If NASCAR wants to generate more interest, one solution is to present its product in more television households by airing its races on ABC, NBC, FOX, or CBS. Showing races on cable presents the challenge of having a smaller “base” audience from which to draw. A race on TNT, for example, already excludes fans who do not have access to that channel. Before a race on TNT even begins, then, almost fifteen percent of those households with televisions are excluded from watching the event.

[There's a dark argument to my advocating over-the-air events. A lot of these networks are willing to pay outrageous fees to put races on their fledgling channels such as FS1, NBCSN, etc. They do this to help establish the new channel and drive-up the number of households that carry it. Although NASCAR stands to earn more primary revenue from this technique, the secondary revenue that stems from interest in the series would likely decline due to fewer people watching races. FOX's choosing to air six races on its young cable network FX is an example of this trade-off.]

I’ve established that there is a large audience difference between the two types of channels. Let’s split them into an “over-the-air” bar plot and another plot for the cable tier. We can really compare which networks are shining and which ones, well, are kind of dull. Here’s how the over-the-air networks look:


It’s important not to confuse the predicted household rating for each network, i.e. the height of the orange bar, with the “quality” of its race broadcast. Promoting and marketing a race can certainly help a television station garner some interest for a NASCAR event. Perhaps the expected rating for each station represents some combination between promotion, production quality, and interest for the over-the-air networks. Nevertheless, we see that the two network partners from the 1990s excelled in drawing an audience relative to their twenty-first century peers. Recall that we are controlling for television contract structures in my model; so one can reasonably conclude that ABC and CBS earned higher Nielsen ratings for races, ceteris paribus. Notice that NASCAR’s current partners — ABC and FOX — post the lowest marginal impacts on television ratings.

And what about the governing body’s cable partners from the previous eighteen years? Well, I’ve got a nice little graph for that, too:


This one requires more of an explanation. Cable channels have different coverage percentages compared to one another. For example, TNT is available in just 86% of households in the United States. Meanwhile, ESPN (1996-2000) was available in almost 75% of television homes. Discrepancies in potential audiences really influence these respective networks’ successes. For example, FX — which has the worst Nielsen rating — garnered an extremely low rating because it was only available in 72% of households. Additionally, all of these channels have an impact on the Nielsen ratings that’s very similar. Each station has a television rating between 3.0 and 4.0. One item to note, though, is that cable was installed in far fewer households in the 1990s than today. Therefore, the ratings that TBS, ESPN, and TNN earned in that era were absolutely spectacular. For example, ESPN’s first foray into NASCAR drew more people than the channel’s second endeavor in covering the Cup Series despite having a potential audience much smaller than today’s (H/T ).

I’m also curious about the optimal type of annual television structure. Since 1996, the Cup Series has used three different types of deals.

  • In the 1990s, NASCAR allowed each track to strike its own television deal. Therefore, television stations generated agreements with tracks instead of the series’ sanctioning body.
  • From 2001 through 2006, NASCAR consolidated the network schedule, selling the first half of the season to FOX and the other half to the NBC/TNT cooperative outfit.
  • Most recently, the series has retained that basic “centralized schedule” form, but with a third group (ABC/ESPN) and fewer over-the-air race telecasts (NBC exited entirely, while ESPN handles the bulk of its partnership with ABC).

So which of the three deals is the ideal structure? Here are the results from my model of these different television-scheduling mechanisms:


This is pretty intuitive. We already know that over-the-air races bring in a bigger household audience. Additionally, the television consolidation efforts have paid off for NASCAR. They create continuity for fans. A network can show several races in a row, build off of their own efforts every week, and promote the following week’s event. The 2001 television deal yielded ratings that were 34.3% greater than the previously individualized deals with tracks. The most recent contract with a greater cable presence and an extra partner, however, has produced ratings that are 12.2% lower than the 2001-2006 agreement, ceteris paribus. When you compare these numbers to the rest of the model, you notice that the type of television deal from NASCAR influences television audiences in a relatively huge manner. Remember how a plate race adds over 17% to the number of households watching a race (compared to a different track configuration)? Simply centralizing the television schedule in 2001 doubled that increase every race for six seasons.

The sanctioning body has already locked-in FOX for another go around in 2015 through 2022, but the back half of the season is still up for grabs. What should NASCAR try to do for the summer and fall portion of the schedule?

Just out of my own personal interest, I created the following chart that analyzes how actual television partnerships performed against other hypothetical editions:


In hindsight, NASCAR has done an adequate job to generate some buzz over the years. As noted, the centralized schedule that began in 2001 has created rather large dividends for the series in terms of interest. But within those agreements, NASCAR could have garnered better ratings in 2001 through 2006 if they consolidated the schedule between CBS/TNN and ABC/ESPN. Both associations would theoretically outperform the FOX/FX and NBC/TNT deals that occurred. Although those years oversought a large television “boom,” the spike in ratings could have been much bigger if the series maintained its previous partners. Long-term continuity and familiarity between NASCAR and its partners from one deal to the next could explain why that might be the case.

For the current deal, NASCAR has done reasonably well so far. Keeping NBC would have softened the blow the series has taken in terms of viewership, but ABC’s cable partner (ESPN) has outperformed TNT. The ABC/ESPN conglomerate would have likely garnered similar viewership to NBC/TNT. FOX remains a solid partner for the current contracts because all of their races are held over-the-air. If several more races move to Fox Sports One in the next deal, however, expect ratings to remain flat or even decline indefinitely. If NBC re-enters the equation with a plan on increasing over-the-air activity, I would expect a rebound in household audiences in the future.

What do you think? Discussion for this topic is endless in my opinion. I’d love to get your thoughts. You can contact me via email at or on Twitter at .


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