Interview: NASCAR's Chief Marketing Officer Steve Phelps on Outracing the Economic Crisis
Steve Phelps and fellow executives faced the enormous challenge of revamping the business of consumer-centric NASCAR -- and succeeded.
Shortly after Phelps arrived at NASCAR, the economy unleashed a series of consumer headwinds. First it was surging oil and energy prices. Then came the collapse in housing and higher unemployment. And to top it all off, a credit crisis and stock market crash that left many corporations in financial dire straits. Considering the consumer-centric heart of NASCAR's enterprise, Phelps and fellow executives were beset with an enormous challenge of revamping the business of NASCAR. But, as cliché would have it, the cream always rises to the top.
After initially sputtering along side the economy, Phelps and Co. had to dig deep, embrace change, and map out a new long-term vision. A short-term fix just wouldn't cut it. With Phelps' leadership, NASCAR embarked upon a multi-prong mission: to enhance the value proposition at the racetracks, improve the race day product, and heavy up on advertising. Midway through 2011, the results are promising. Ratings are up, consumption metrics are coming back, and the key 18- to 34-year-old demographic is up 25% year over year. These numbers are quite remarkable, considering the slow and uneven nature of the economic recovery. According to Phelps, this is just the start of something good, and NASCAR's future is looking up again.
Says Phelps, "The numbers are encouraging and the racing is as good as it has ever been. We are building a positive narrative. It's a great time to be at NASCAR... good things are coming out of scenic Daytona Beach."
Ever gracious with his time, Phelps and I covered a wide array of topics including his early years growing up on the East Coast, his goal to get into the professional sports industry, his time with the NFL, and the past, present, and future of NASCAR.
Andrew Nyquist: When you were growing up, what sports did you like and what teams were you a fan of?
Steve Phelps: I grew up in Vermont, so I was a New England boy. My teams were the Red Sox, Celtics, Bruins, and Patriots -- and I also liked the Cowboys. From a NASCAR standpoint, there was a local track near us that my dad started bringing us to when I was 5 or 6 years old. The racetrack was called Catamount Speedway and it was my first exposure to stock car racing. So, I was a fan of NASCAR from early on as well.
Andrew: How did you get involved with professional sports and what attracted you to the professional sports industry? And further, what attracted you to NASCAR?
Steve: When I was in business school I really wanted to be involved in the business of sports -- in some fashion. In reality, I'm not even sure I knew what that meant. After getting my MBA, I looked at sports; sporting goods, equipment, footwear, leagues, and teams. I got nowhere, which is not surprising. Towards the end of my sports search, I met with a family friend that advised me to get a job with a Fortune 100 company, go through their training program, and stay there for three to five years. So that's what I did. I started as a Brand Assistant and worked my way up to Brand Manager.
Two months into a new branding opportunity, a friend of a friend called to tell me about an opportunity at the NFL. I remember telling him that my current position asked for nine months and that I wasn't sure that I could ethically take the job. I remember him pausing and saying in a thick East Coast accent, "What, are you kiddin' me! It's the NFL! You have to at least go down to their offices!" And the rest was history. I was with the NFL for 13-plus good years.
Then during a brief stint with Wasserman Media Group, NASCAR called. They wanted me to run their New York office, which seemed a bit too similar to the job I had at the NFL. So, at first glance I wasn't very interested. But, they were persistent. We talked through the job and the opportunity and I realized that it would present new challenges in the area I love: sponsorship. At the NFL, sponsorship was a big number and we ran a great business, but it paled in comparison to other revenue streams. Here at NASCAR, sponsorship is the lifeblood of the industry… just a different dynamic with more responsibility. And after a few months at NASCAR, I was named CMO – it's been a great ride.
Andrew: Looking back on your 20 years in professional sports holding senior executive marketing roles for two of sports most powerful fan bases, can you elaborate on a couple of key people that assisted you with your professional journey?
Steve: I had a boss at the NFL named Jim Schwebel. He was a very good boss. One of his strengths was that he didn't micro-manage. He really let people grow and do their work, showcasing what they can do. So when he left, my promotion was an easier transition because I was proven and tested.
Here at NASCAR, my boss Brian France also is a tremendous leader. He will challenge you when you need to be challenged, but he'll also let you go and do your business. He trusts his people to do the right thing. His style is an incredible one. He's always there and always watching. He's got his guiding hand on you, but he'll let you do the right thing for the business. I'll give you an example. We were going to do a communications study -- a complete review of the sport's communication practices, not just at NASCAR the sanctioning body, but at the teams, at the tracks, with driver PR reps, anyone who was in the competition space. I told him that I wanted to use a consultant to do the study because I thought it was very important to have third party validation of whatever the recommendation would be that we put forth to the industry. He said that he didn't think that it was necessary but that if I believed it was needed, to go ahead and do it, which we did. The review was done over several months and yielded great results. The first time he saw the review, he said, "I was wrong, you were right. This has been a very worthwhile exercise and I'm thrilled we did it." So that gives you a sense of who he is. A great leader and a great boss. He believes in hard work and listening to his people and I pass those expectations on to my people as well.
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