Brian France at Phoenix International Raceway transcript November 9, 2008 An Interview with: BRIAN FRANCE THE MODERATOR: Good morning, folks. We've got our chairman here, Brian France, who will be happy to answer any questions. Brian, do...
Brian France at Phoenix International Raceway transcript
November 9, 2008
An Interview with:
THE MODERATOR: Good morning, folks. We've got our chairman here, Brian France, who will be happy to answer any questions.
Brian, do you want to say something to start with?
BRIAN FRANCE: First of all, good morning. I thought I'd make a couple of comments, because I know there's been a lot of discussion recently about the economy and how that affects NASCAR, certainly the manufacturers and what they're going through, the recent earnings announcements for both Ford and General Motors.
And obviously, as we've said for, oh, for at least a year now, that as the economy either got better or worse, but certainly if it got worse, NASCAR would not be immune to the effects of a tough economy.
It wouldn't be immune if our partners were struggling and we would need to work very hard to make sure that we were good partners in the reverse as they got through challenging time.
And that also included our fans who, as you know, have had to fight high fuel prices in the summer, which had an effect on us. And they also have had to fight the credit crunch and everything else that's been thrown at them.
So NASCAR as an industry is not immune. We've said that from the beginning. And so the question that you may ask, and I'm sure you will, what are we doing about that, is I and Mike Helton have been to see CEOs of each manufacturer or relatively high executives at Ford, GM, Chrysler and Toyota in recent months.
So we're trying to understand very carefully what they're going through. And as importantly how it relates back to the team owners who rely on engineering and the commitments that the manufacturers have.
So we're as up on that as we think that we can be to stay abreast of it. And so with those general comments on the economy, I'd be happy to take any question that you may have.
THE MODERATOR: Questions.
Q: Is there any role that NASCAR can play in terms of stepping in, helping teams I mean the NFL, I think, raised a $2 billion line of credit for its teams. Is there a role for NASCAR in sustaining individual teams, or does that the work in the NASCAR model?
BRIAN FRANCE: No, it does work. There's two things you want to be thinking about. One is the cost model that we have, which is the rules packages or any related items that we have control over.
And so, in particular, the truck series, which you can imagine the manufacturer support is going to be very challenging in the months and years ahead, because of lack of selling big trucks.
So the point is, is we need to be more aggressive than we've ever been in taking cost out of the system. We're always aggressive. That's always a core requirement on our part.
So that's the first thing that we can do. The other thing that you don't really want us to do, and I've heard a lot of things about well NASCAR ought to be cutting their own cost. We are going to be as efficient as we can as a sanctioning body.
But all the initiatives that NASCAR has ongoing that affect us next year or many years in the future, things like diversity, things like end market promotion or our youth initiatives, things that cost the media group. We're trying to build out a digital opportunity for the whole industry, that costs millions and millions of dollars are simply areas that will ultimately, hopefully, grow the fan base. But the tracks are not going to be able to fund those kind of initiatives.
They haven't been in the past. They're under increasing pressures of their own. So when I hear people say well NASCAR we can do that, and we will be as efficient as we can as a business; but the things that we want to do for the sport, overarching, to look past a tough economy, to make sure that these initiatives that we've had in place that may be very close to giving us a big benefit, that we be very careful about not cutting those. So those are the things we think about.
Q: Specifically, on the team side, we're hearing from teams, sponsors are looking to cut back their initial sponsorship, the monies that they have dedicated these teams. Teams that are looking to merger are having trouble going back to getting lines of credit to make those kind of roles. Can you guys get them a line of credit, and as far as the team side, what specifically can you do now to help these teams when we have four organizations right now that, even at that level, are cutting back? But even below them, there is such a crisis out there on the back end of the garage where these people they don't have sponsors. They're wondering whether or not they're going to be here next year?
BRIAN FRANCE: Well, we want them look, what can we do? Can we establish lines of credit? They're individual businesses. And there are literally, there are literally hundreds of them that can be affected, depending on how far you would go in our national series, different teams starting up or exiting all the time.
So we're not talking about 20 or 25 traditional sports teams where some halo credit line could be established for them. That's not practical.
But what's important is that we have said routinely, of course we're concerned about that. The advertising market has come to a screeching halt in many respects. So I'm meeting with our television partners who are feeling that very, very directly.
So this is not just a, hey, the team owners, some of the team owners are in dire straits. We understand that. But the entire country is in dire straits in one form or another. Quite frankly, we may come out of this, we'll see how the economy substains in terms of how bad it gets, but better than most. Even though it's hard sometimes to see that.
We're all sensitive to a team owner who is really struggling who ought to have sponsorship. But we can't expect to operate as an island and be oblivious to what's going on, where companies are pulling back on every form of advertising, marketing and promotion that they're doing and somehow they're just going to go, well, you know the NASCAR guys we're not going to cut anything back there. That's unrealistic.
So the idea we can wave a safety or have a safety net for everybody that is in our industry, I wish we could, but it's just not practical.
Now, we're going to take cost out. And you're going to hear us talk about we've talked about it in testing. We're looking very, very hard at that, at being more aggressive than we've ever been. The truck series, our group is meeting, has been meeting for the last couple of months in anticipation of the manufacturers having some issues in that series in particular.
So we're going to be more aggressive, and I mean a lot more aggressive in taking cost out of the system. But there is that difference. You don't want NASCAR as the league or organization to be running around cutting a bunch of things that have a long term impact.
That's the things we've got to be careful about if you're us, because a lot of those things we've had it for a long time have had a big investment in.
Q: Brian, one of the big reasons for the Car of Tomorrow was to save money for the teams. What are you hearing from the team owners? Are they saving money on the Car of Tomorrow?
BRIAN FRANCE: Well, you know, I hear mostly that they are. There are certainly some that would disagree. It's probably a little bit too early to get a full sort of accounting. But if you go by a couple of different metrics, number one is, are you building less cars? Do you need less cars? Do you need less engineering, another big cost, and have we made a bunch of progress in that area? And the answer is we have.
How much that impacts it over the long term, we'll have to see. We're very happy with the three principles we set out which was safety, cost containment and competition.
And if those of you remember, we got a lot of pressure back in May to make changes on the Car of Tomorrow because it wasn't driving as well as it could and all those things. And we're very pleased that we didn't cave to that pressure, because that would have done two things. It would have cost the teams a lot more money because we would have in theory moved the rules around, right? And made them chase something else. That costs money every time we do that. So that would be number one.
And number two, we never would have gotten them an opportunity to settle on the car from a driving standpoint that they have today, and now, if you roll the clock forward, which we have to look at it, we're very pleased with what's happening on the track. Most of the teams are up to speed on this car.
It's exciting. We've had competitive events. We always like to have more and better. But we're very pleased with where the Car of Tomorrow is on all three of the metrics we set out for.
Q: Brian, you've championed the diversity issue in recent years. Now we have a black world driving champion in Formula One, an African American about to go in the White House. How much pressure are you getting from corporate partners to accelerate the diversity program, and is there anything new you can tell us about where that is?
BRIAN FRANCE: Well, we just had the driver combines a couple of weeks ago, which we're in, I don't know, third or fourth or fifth year of Drive for Diversity, which is the centerpiece of diversity. It's not by any means all we do, but it's an important part. So we are getting drivers up through those ranks who are starting to show some real talent and starting to get noticed.
When will someone be in the Sprint Cup level, I don't know. That would be to the media's litmus test, that will be what you guys thinks is a successful diversity program. We look at it broader than that, although that's really important. Be great to have it.
We're also looking at positions that are filled. Crew chiefs. Crew members. All through the industry we're trying to have a more diverse workplace in general.
So that is ongoing. We're making progress on all fronts. And I suppose when we get to the end, which is somebody who is not only in the Sprint Cup Series but is very successful, is when most people would say that we're victorious. But we'll think we're victorious if we're doing a lot of things in addition to that.
Continued in part 2