Michael Jordan’s Team President Exposes Inability Of NASCAR’s Business Model While Offering an NBA & NFL Comparison

When income comes from various sources, the dependency on a single source is less. But that is not the case with NASCAR. Unlike other popular sports like the NFL and NBA, NASCAR has a pretty huge dependency on corporate sponsorship.

In a recent interview, the President of 23XI Racing, Steve Lauletta opened up about the dependency of NASCAR on corporate sponsorship and compared it to other popular sports like NFL and NBA. He explained why NASCAR is so reliant on corporate sponsorships and how the NFL and NBA have managed to keep their reliance to a minimum.

Reasons behind NASCAR’s huge dependency

During the latest episode of The Dale Jr. Download, Lauletta, while discussing the current and previous states of NASCAR, shed some light on the recent developments. He told Dale Jr that earlier, NASCAR used to do the same kind of races over and over. As anticipated, it became boring after a point, thereby reducing their viewership. He continued that currently, it is way better.

Events and features like the Clash at the Coliseum, the Chicago Street Race, the Next Gen car, and the schedule changes have increased the engagement of the fans. Coming back to sponsorships, the President of 23XI Racing revealed the reasons behind NASCAR’s high dependency on them.

Lauletta explained that diverse sources of revenue in sports like the NFL and NBA are the reason for their low dependency on corporate sponsorships. He also said that in NASCAR, 70-80% of a team’s revenue comes from corporate sponsorship. For other sports, such as NFL and NBA, he said, “it’s somewhere in the 13–20% range.”

He added, “They’re getting their share of their revenue from the league, they’re selling tickets, they have the local media rights, they’re selling sweets, they have merchandise. […] They have so many different buckets. We don’t have that many buckets.

“What we race for, what our corporate sponsorships bring in, and that’s pretty much it.” 

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NASCAR is a sport that has fewer income sources than sports like the NFL and NBA. Despite high viewership, the huge working cost of NASCAR makes them dependable on corporate sponsors. He then took the example of royalties from selling merchandise, such as die-cast models of cars.

How much revenue does NASCAR make from die-cast models?

While talking about income from other sources, Steve revealed how much royalty his team earned by selling Kurt Busch’s die-cast model car. He told that “we had the 2nd highest-selling die-cast last year with Kurt Busch.”

But to everyone’s surprise, the royalty was very less than expected. Lauletta said, “I might be able to buy you guys lunch for what we got from royalties off of that.”

NASCAR has made significant progress in all areas, including finances, safety, and viewership. By diversifying income sources, the reliance on corporate sponsorship will be reduced. The management’s recent bold decision gives some hope to teams.

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