In this week’s CNBC Sport newsletter, NASCAR Commissioner Steve Phelps spoke with CNBC’s “Power Lunch” Co-Anchor & Senior National Correspondent Brian Sullivan for the CNBC Sport videocast. Phelps discussed NASCAR’s media deal with Amazon, the sport’s international growth and the latest on the lawsuit against Michael Jordan’s racing team.
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STEVE PHELPS ON HIS ROLE AS COMMISSIONER
I think my role is similar to other commissioners. We are structured differently than stick and ball sports like the NFL. Roger Goodell has 32 owners. That’s who he reports to. We have two owners that own NASCAR, but the race teams are separate. We own a bunch of tracks, there are a bunch of tracks we don’t own. So my job as commissioner, probably the single most important thing, is for us to collaborate together with the stakeholders and actually act like a league. So we are not structured like one, but to optimize our success, you really need everyone to understand the vision of where we’re going, understand the plan and then figure out how they can help you do that, because it’s in their best interest, because that will lead to optimal growth.
STEVE PHELPS ON COMPETITION
I think it’s really not just motor sports, actually not even just sports. It’s entertainment. And we are competing for that dollar. We are competing for your time and other people’s time, because if they’re not watching NASCAR, are they watching Netflix? Are they watching, you know, movies? Are they watching, you know, CNBC? What are they doing when they’re not doing that? So it’s super competitive. I believe if motor sports broadly is rising, we’re the number one motor sports in this country by a wide margin, we’re going to be the beneficiary of that.
STEVE PHELPS ON AMAZON
PHELPS: They’re averaging a million viewers on average per minute in their post race show –
SULLIVAN: Amazon.
PHELPS: Amazon, which is on Amazon Prime, which is those numbers are unheard of. And I think they brought their own flair to it, which we knew they would. And I think they have the fan, both fan as well as the garage reaction to Amazon Prime has been overwhelmingly positive, so we’ve been thrilled with them. Everything they said they would do, they’ve done. And for us, it’s an important thing.
STEVE PHELPS ON AMAZON PRIME RATINGS
PHELPS: I think we’ve been surprised pleasantly by the Prime numbers, as I said, the Amazon Prime numbers. If you go on Amazon and buy something this Sunday, you will – and the race is, you know, the Pocono race. It will say that the Pocono race is there. We are up on, you know, on the top of that screen, which is tremendous. And they have plugged in different places for us. So was there a fear about dilution, around distribution? Yeah, there was a fear. But for us, we thought it was really important to test a streamer, right? So there were lots of people who doubted that the numbers would be as good as they are. I mean, there’s a pundit who thought the numbers, and I won’t say who it is, because it’s a current partner, their research person, thought Amazon Prime would do 1.2 million average viewers on for the Coke 600 –
SULLIVAN: It was over 2 million.
PHELPS: 2.7. So he missed by just a smidge.
STEVE PHELPS ON MICHAEL JORDAN LAWSUIT
PHELPS: So the suit was brought by 23XI which is the company that the majority owner is Michael Jordan. Minority owner is Denny Hamlin, who’s one of our drivers. Very successful driver.
SULLIVAN: One of the best drivers, yeah.
PHELPS: Yes. Won 58 cup races. He’s a tremendous talent. Listen, I’m not sure why they decided to bring a suit. And there’s another team called Front Row that also partnered with them on this suit. It is an antitrust case. We don’t believe it’s an antitrust case. We believe –
SULLIVAN: Yeah, I think they called you monopolistic.
PHELPS: Yes. And I think what I would say on that, Brian and you know, the viewers, I think, will get this, you know, there was a significant increase in revenue that the teams got – so over the period of time, I think that the increase that we offered the race team contract to contract was an increase of 73%. That’s a significant increase. If you have, in my opinion, if you’re a monopolist, right, and you have that monopsonist behavior, you’re not going to increase by 73% you’re actually going to go backwards, because you have that ability to do it. For us, that’s not what we wanted to do, because we need healthy race teams. Healthy race teams puts on better racing.
STEVE PHELPS ON PRIVATE EQUITY MONEY
Right now, our charters prohibit sovereign wealth, so, but we are fans of private equity. There’s a percentage that they can own. They can’t go over that percentage. And there needs to be a control person, that is a person, not a company. But I’ve been pleased, and I probably met with myself in the last two years, you know, a couple dozen private equity firms. They are a buyer of NASCAR. And they’re coming because they expect NASCAR to continue to grow, and that’s my expectation.
STEVE PHELPS ON STREET RACES
PHELPS: We’re in discussions with a lot of different cities. The great news about where NASCAR is, we’ve proven that we can race on the streets. We’ve proven that we can race in a stadium. You know, it’s an open canvas for us now to determine where we’re going to race, and what we’re trying to do is we’re trying to open new eyes. So the streets of Chicago –
SULLIVAN: Great race.
PHELPS: 80% of the people who bought a ticket to that race in the first two years, had never been to a NASCAR race. The LA Coliseum. Same number, same percentage. So when we’re going to these new places, we’re opening the eyes of people who want to participate in our sport, which is number one portion of my job.
SULLIVAN: So it’s San Diego is not a no.
PHELPS: San Diego is not a no.
SULLIVAN: It’s not a no.
PHELPS: It’s not a yes
SULLIVAN: Not a yes, but it’s not a no.
PHELPS: But it’s not a no.
— CNBC Sport —