As Daytona 500 Kicks It Off, Steve Phelps Talks Diversity, Upcoming TV Deals, And The State Of Nascar

The Daytona 500 starts the Cup season. With the success of the Busch Light Clash at the LA Coliseum, fan interest growing, and diversification in the stands and with team ownership, Nascar president Steve Phelps is bullish on 2022, and beyond.

Phelps sounds upbeat – and maybe he should. The 2022 Nascar Cup season sees the NextGen car come into competition and a sport on an upward trajectory. As the Daytona 500 kicks off (Sunday, 2:30pm ET on FOX), the event sold out in advance of the event.

One critical aspect of Nascar is the continued growth in key demographics. According to their 2021 Fan Engagement Report, both African Americans and Hispanic Fans are more likely to rate their interest in Nascar higher. Critical to increasing the audience, 57% of Black fans consider themselves extremely interested in the sport, up from 45% the previous season, while 60% of Hispanic fans consider themselves extremely interested in NASCAR, up from 53% the previous season.

Once a sport almost exclusively rooted in conservative, white, middle-aged southerners, Nascar has seen California as their top market. That was not by accident. Leading up to the moment the racing sanctioning body banned the Confederate flag, Nascar has been about being inclusive.

“We are not going to have things going forward that are divisive, or vulgar that splits our fanbase into two,” Phelps said to me in an interview for Forbes. “We want people to come to Nascar races that have a love of racing in their heart that is really about being welcoming and inclusive for everyone to come into this sport.”

Phelps added that the reasoning for inclusion isn’t some “flavor of the month” thing. Beyond him seeing it as the right thing to do, it makes business sense.

“We’re going to continue our efforts in diversity, equity, and inclusion because it’s working. If you come to the race track you’ll see more young people, more families, more 20 and 30 somethings – and yes, more people of color. That’s what we want. Our long-time fans only want to share the love of Nascar with people that want to share that love with them. And you have a very, very small group of people who don’t want that. They have said that they’re going to vote with their wallet, and that’s okay. For every fan that we’ve lost, we’ll gain twenty. It’s not that we’re trying to push people away —- we don’t wish to do that – we want to bring more fans in. But by in large, our fans are excited to see more fans enjoying our great sport.”

That diversity growth and cost containment with the NextGen car are reasons why team ownership has seen an increase of Blacks. Be that Michael Jordan’s involvement with the 23XI Racing team, Pitbull and the Trackhouse Racing Team, or Floyd Mayweather who has a car in the Daytona 500, it’s not just in the stands that sport is seeing diversity grow, but up and down pit lane.

Asked whether the NextGen car and Nascar’s continued outreach to people of color had anything to do with those individuals joining the sport, Phelps did not hesitate.

“It absolutely factored with them,” said Phelps. “I think it’s two things: the stance on social justice and the ban of the Confederate flag. And yes, and this new ownership model with the NextGen car. So, Michael Jordan and Denny Hamlin. And Justin Marks and Pitbull wanted to get their feet wet in 2021 before the NextGen car came online in 2022. I probably shouldn’t speak for them, but I believe that absolutely it’s one of the reasons why they wanted to come be owners in Nascar.”

One thing Nascar is looking to do is use the 2022 season as a launch point for their next media rights deal. In 2012, they reached a $2.4 billion eight-year agreement with FOX Sports, which was extended in 2013 with an additional $1.4 billion to go out to 2024. NBC Sports reached a $4.4 billion ten-year in 2013 that will see their package expire at the same time. Given the growth and the heady numbers for The Busch Light Clash at the LA Coliseum, and likely high numbers for the Daytona 500, Phelps sees them in a good place.

“We have to do our job to position ourselves smartly for our media rights negotiations when we head into 2023 [when negotiations would take place], and I think we’ve done that,” Phelps said. “We want to make sure that FOX’s and NBC’s inventory is filled out, and over the last few seasons, it largely has. We see increased [cost per impression] CPMs. They’re getting significant support from Nascar sponsors and advertisers who want to be with us because the sport is growing and reputation gains for our industry.”

Phelps added that Nascar needed to stabilize their ratings, which he said they have done since 2018. “For us, 2019 was up. 2020 was flat. For 2021 we were down just a tick on the Cup series, flat with the Xfinity series, but up on the truck series. About 25% of our inventory was impacted by weather, so my expectations for this year is that our ratings should increase while most other sports ratings will decrease.”

In the end, the racing and fan interest will drive Nascar’s success. They can’t control the weather but are looking to a successful season in other regards.

“We are clearly having a moment as a sport,” Phelps said. “I think if we invest wisely, and execute against the plans we have in place – if we continue to act boldly as an organization and continue to collaborate as an industry, this sport is going to be successful over the next decade. I honestly believe that to be true.”