NASCAR Might Have Just Saved Themselves With the $7.7 Billion Media Rights Deal

There is no denying how the new media rights deal has stunned the NASCAR community. With many still trying to digest it, the deal has undoubtedly given rise to divided opinions. While the figure of $7.7 billion sounds lucrative, there seems to be more to it than what meets the eye.

It is public knowledge that NASCAR officials invested plenty of time in negotiating the media rights deal. To secure an average annual revenue of $1.1 billion is something, especially when the sport is supposedly on the wane. However, it looks like the sanctioning body has made it count when it mattered the most.

Is the new media rights deal a game-changer for NASCAR?

Just a couple of days back, NASCAR finalized a $7.7 billion deal with Fox Sports, NBC, Amazon, and Warner Bros. Discovery. With such a lucrative deal securing seven years of revenue, surely it seems like a lot of money. But is that really the case?

NASCAR secured almost a 40% increase over their current media rights deal yet there’s something that doesn’t fit perfectly. Sports Business Journal journalist Adam Stern recently cleared a few things out when he attended the Dirty Mo Live podcast. With the Cup Series already facing a 5% drop in viewership this year, Stern discussed how the new deal could impact the ratings.

At first, the renowned journalist explained how the sanctioning body would have loved to stay with Fox Sports and NBC. However, given that it would have most likely resulted in less money, NASCAR opted to explore other options. Stern then pointed out how the media rights revenue plays a key role in sports as he used the MLS as an example.

He said, “You look at MLS. MLS takes a big deal with Apple, almost all of their games behind the Apple TV’s paywall. That was the money they could get and they had to deliver for their industry. Their industry is expected to be a growing business and one of the most sporting ways to be a growing business in sports is to have growing media rights revenue.”

While he explained that it was a similar case with NASCAR, he added one more angle because of which this deal possibly materialized. It is no secret that the cable universe has been declining. As Stern discussed, every quarter, there is a drop in a couple of percentages of subscribers, which is very concerning.

This is one of the reasons why NASCAR did not want to gamble solely on cable users. With Amazon Prime, they had the leisure to explore the streaming arena and possibly get a glimpse of how it could look in the future. However, along with that, there was a major reason behind the deal.

As Stern said, “So partially, they [NASCAR] did it to spread their eggs in multiple baskets but also part out of it was to get more money and to make sure they get more money in the industry at the time when their teams are saying we need more money, we are not profitable currently.”

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The SBJ journalist then explained that NASCAR was more or less left with no choice when it came to this deal. He said, “NASCAR is in a tough situation because they had to deliver more money as well and clearly if they went this route, that’s a good indication that’s because they had to go this route to deliver more money for the industry.”

While NASCAR secured an impressive deal, there could be downsides to it and Stern explained it beautifully.

Adam Stern points out a key potential drawback with NASCAR’s new media rights deal

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Safe to say, NASCAR has been struggling to keep their teams happy in terms of profitability. Since the introduction of the Next Gen cars, it has only become more difficult for the Cup Series teams and teams in other competitions. While they have taken a commercial hit, they have piled up pressure on NASCAR to help out in this case.

In addition to that, Sports Business Journalist Adam Stern detailed one important issue with the new media rights deal. Speaking on the same podcast, he said, “When you look at the deal with Warner Bros. Discovery, those races are going to be simulcast not just on MAX streaming but also on TNT and TNT is cable, not a free-to-air channel.”

Stern continued explaining how it can come back to haunt. He said, “You have that on the cable subscription. So, the number of races that are going down that have been on the network, that’s what teams are concerned about because the ratings will probably be lower.”

With not every fan having access to all platforms, it is a tricky situation both for the fans and NASCAR. However, the sanctioning body has gone ahead and made its move with the new media rights deal. Now, it remains to be seen how the execution part works out. For now, it looks like NASCAR has secured itself well by bringing more money to the table.

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