Next Nascar challenge falls on TV nets

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Nascar's last grueling lap for its TV rights is finished, but there remains a question on whether the winning networks can make money on the deal.

Nascar has struck a $400 million-a-year deal with four networks, splitting its yearlong race schedule into two seasonal periods. Fox and its FX cable network will run races from February to June, while an NBC/Turner Broadcasting partnership will get June to November races.

These networks beat out partnerships between ABC/ESPN and CBS/TNN, which each bid $130 million, according to executives close to the companies.

$2.8 BILLION DEAL

Nascar's eight-year TV deal with Fox and six-year deal with NBC/Turner are valued at $2.8 billion -- a significant increase from its current $100 million annually -- divvied up mainly among Nascar track owners. Fox/FX and NBC/Turner will pay about $200 million each per year for the rights.

Nascar anticipated big TV rights money because of the sport's recent growing ratings. Last year Nascar averaged a 5.7 broadcast network rating, beating regular season NBA, Major League Baseball and NHL contests. Ratings have risen 19% since 1993, and Nascar's 4.3 rating on cable is up 33% over the same period.

But the deal may not be as favorable to the networks. One network ad executive said for the current year, Nascar will pull in only $150 million in total broadcast and cable TV advertising. If that were maintained in the new contract, this would put the new Nascar TV networks in the red to the tune of $250 million a year.

COMPETE WITH CAR SPONSORS

Selling TV time on the telecasts, too, could pose somewhat of a challenge. That's because the networks will compete for ad dollars with Nascar sponsors that already receive considerable airtime via logos on race cars.

"Advertisers are getting their exposure on the air instead of buying media time," one network advertising executive said. "Unfortunately our rights fees are based on what [advertising time] we can sell."

That could limit the roster of current TV advertisers. For instance, one broadcast network that currently airs Nascar races said it regularly books 80 to 100 individual advertisers.

"We needed that number to be 200 advertisers," said an executive at the network, the approximate number of advertisers signed for other big TV sports.

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