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November 11, 2008

Brian France

DENISE MALOOF: Thank you, everyone, and good afternoon. Welcome to the NASCAR Sprint Cup Series teleconference, ahead of Sunday's Ford Championship weekend at Homestead Miami Speedway.
Where we'll decide three national series titles this weekend: The NASCAR Craftsman Truck Series on Friday, the NASCAR Nationwide Series on Saturday, and the NASCAR Sprint Cup Series on Sunday.
Appropriately, we have a very special guest today, NASCAR Chairman and CEO Brian France, Brian, thank you for joining us.
BRIAN FRANCE: Thank you, Denise, and good afternoon, everyone. I want to focus my remarks and hopefully a lot of what we discuss today around a little bit about the season, how it's gone so far. Of course, we're closing in on the finale here on Sunday.
Just before I start that, I wanted to make mention of a topic that has been coming up a lot and rightfully so, which is the manufacturers, which are so important to NASCAR, and the various challenges that they've got from a business standpoint that they're going through right now.
I mentioned this Sunday as well, and it's worth saying again. They have been a very important part of the sport in historical purposes. And we have every intention of them being a big part of the sport in the future. That's why we're going to do everything we can to help them get through a difficult business cycle because of what the ramifications could be, forgetting NASCAR -- forgetting NASCAR for a moment, because that would pale in comparison to one of those companies if they have any additional challenges. We want to be successful, and that's what we're going to be working on with all of our manufacturers who help us in the sport.
So with that said, I want to zero in a little bit about the full weekend that we have, because, obviously, it's a culmination for all three of our national divisions. And we have a very strong points battle going on with Johnny Benson and Ron Hornaday, just three points on that particular division.
It's an opportunity also for us to say goodbye to an old friend and a good partner for the series in Craftsman. Most of you know Camping World will be the new title sponsor for 2009. So looking for a very good, historically that's come down to the last lap, that particular division. So we're looking forward to that.
And also getting the Nationwide Series, which, itself, has had a nice run. It continues to develop the drivers of the future. You're looking at Brad Kozlowski as one example, and there are many others who are getting a chance to showcase their skills in America's number two Motorsport.
Then, finally, of course, is the historical importance that it's beginning to take shape, that Jimmie Johnson could, in fact, win three championships in a row. Of course, Cale Yarborough, the only one to ever do that, and in our own view, in my own view putting that in some perspective on the level of competition that exists today, the format that you have to make it into the postseason, and then you've got to beat the 11 best.
And to do it three years in a row, if that's happens, it's certainly not out of the realm of reality that Carl could make a run or Jimmie could have some trouble. But assuming that would happen, it would put in our view, Jimmie in an elite group, maybe in an elite group by himself. So we'll are to see how that shakes out.
But what's important for us looking back and sort of judging 2008 was, you know, we had a few goals and objectives. One was, of course, to implement the Car of Tomorrow, which is now the new car in all events, and try to make sure we got all the benefits from that decision that we could and integrate that as carefully as we could and get a good result, and we have.
We've watched the competition get better week after week as the teams have figured out this car. Then all of the safety benefits that we've got, those are now well-documented, well recorded that we've approved. It's never good enough, but we've improved on that promise. Finally, is the car side, which, of course, ties directly to the economy and all the things that are going on today.
We believe very strongly that this car will deliver cost savings in the long run for sure. In some cases in the short run. We're very comfortable with that, and it will allow us in the future to continue to take cost out of the system, which is what everyone in our industry is trying to do.
That's our number one policy, as a matter of fact, along with safety to take cost out on behalf of the injury without sacrificing both the level of competition that we all expect, and the level of promotion and other things that we need to keep doing to reach new fans.
So those are still important, and we will continue to do those at a very high level.
So I would tell you the other last part about 2008. You know, I said and we all said that we wanted to put -- there is this balance in NASCAR, because we have a long season, lot of events, of running well and then wanting to win more and balancing those two effectively.
I got to tell you we did add more points to the win, and we did change slightly our seeding as a result of that. And I think you have seen the drivers in particular are the ones who you hear from on this issue, but they've been very clear that they're going to have to win more to move up in the standings and win a championship.
You saw Carl Edwards with that big move in Kansas City, because he knew he had to do that. Every point was going to matter. Turns out he was right. He needed that.
But Jimmie Johnson having to come back from adversity from Texas into Phoenix. He didn't just try to get out on the point. He went out and sat on the pole and won the race. Those are all things that lead us to know that that balance of winning and running well you need to do both. We've gotten as well as we think we can at this point.
With that, I'll open it up to questions and look forward to seeing everyone here in South Florida at the end of the week.
DENISE MALOOF: We'll now go to questions.

Q. How close are you to a decision on whether to eliminate testing all together for '09, considering the owners including Rick Henderson talked about let's do telemetry at the tracks on Friday, and get rid of this $100,000 a day testing. Also, would that include an elimination of Daytona testing in January, and the test in the West at Las Vegas?
BRIAN FRANCE: We're going to need to react to that quickly because the budgets are being set for each team. So we'll not waste any time on that. We'll do that pretty quickly. It will be comprehensive if we go as aggressive as some have suggested, including ourselves.
To be as aggressive as we can take cost out of the system. Here again, that's exactly what I mentioned in Phoenix that we were going to be more aggressive in this area, so it will be comprehensive and significant of how we've looked at it in the past.

Q. Along those same lines as you look at ways of taking cost out of the sport, are you considering either reducing the length of some races and reducing the length of the schedule itself, take something races out and if you're not considering either of those, why is that off the table?
BRIAN FRANCE: We're not considering either one of those. The reduction of the number of events is not practical. We have contracts in place and historically important events. Where would you choose? They're all successful in one form or another, so that would not be possible.
Then, you know, shortening events, that would be in our view more symbolic than actually saving anybody some real money. It's not in the last 50 laps, it's, you know, getting to the event and all the things that make up that in the first place.
But there are lots of other places that we can be more aggressive. Testing, as we've just heard, is on everyone's, you know, short list. It's on ours as well. And there are many, many other things. The good news is no one could have anticipated the economy. But we anticipated that the cost containment aspect of our sport is always a significant issue.
So that's, you know, right after safety is primarily where the Car of Tomorrow came from. We wanted to have an area that we could control more clearly and that the teams would have less to work with, therefore less engineering, less testing, less lots of things that make up what is a successful race team. So the good news is that that work we did many years ago to get us to that point will have some payoff when we need it the most.

Q. Just wanted to get what you thought about the ABC moving the final 34 minutes of the race on Sunday to ESPN2, and if there's anything that you can do about that in the future?
BRIAN FRANCE: Well, we didn't like it. That was not what we had anticipated. But we have talked to them repeatedly in the last couple of days, and have, you know, there was lots of circumstances that they had to consider. I don't have to agree with each one of those, but they had their own issues that they had to manage around.
So we were the, you know -- unfortunately, we got the short end of that as a sport. But we're working with them to hope eliminating that from happening in the future.

Q. I was curious. You know, the Chase was supposed to be an exciting, down to the last lap finish, and it looks like it probably won't end that way. Is that your take on it? Do you wish there was some more drama going into the last weekend of the season?
BRIAN FRANCE: Yeah, I'd love for all 11 drivers to be within 25 points of each other, myself. I know but the reality of it is, that's sports. You're going to have World Series that are not as exciting as others, and super bowls, and that's just the nature of a dominant performance, quite frankly, by Jimmie Johnson. If he weren't so dominant, we might have a different discussion.
So you have to give him and his team to come back and win in Phoenix, when they were down on their luck, to stumble through the races and came right out and won. That's dominance. When that happens, they separate themselves pretty well from the rest of the field.
Q. Just wondering, overall, what, perhaps, NASCAR can offer the fans in the way of maybe ticket price reductions or just incentives to get them to fill seats in 2009 and beyond?
BRIAN FRANCE: I tell you, the tracks have been really hard at work on that subject, because they're the ones who obviously do manage selling the tickets in our sport. They're certainly very familiar with their individual markets. Some are more effective than others. I know they're trying to add as much value for the race fan as they can and we're encouraging them to do that.
Quite frankly, we don't have to, because they're right on top of that. They're very sensitive to the cost and the challenges of race fans who live in this country anyway, with the economy, it wasn't lost on them with respect to high fuel prices mostly in the summer.
So it will be topic one in the off-season for all the tracks, I'm sure, to make sure that they're doing everything that they can to be sensitive to a race fan that's being tested every way they can with the economy.

Every year since the Chase, we saw the points lead going into Homestead has grown bigger and bigger. I'm wondering if there is anything that can you do or would do, that NASCAR would consider to make the Homestead race, the season-ending race more relevant?
BRIAN FRANCE: I think you have to look at it in the general sports genre. When someone is dominant like Jimmie has been, it's easier to want to revise some system that would somehow pull him back from being so dominant and make it a closer points battle. But that would be number one. Wouldn't even be right.
But secondly it misses the point. We have a system that, if everybody performs well, we have more people that have a shot at the Championship down the stretch. That's undeniable. You have to make the Chase in the first place.
And history as you unfold, we're in our fifth year, as history will unfold, we'll have a period of years where someone will be as dominant as Jimmie and it will go down in the history books. Then there will be other years where that won't happen, and we'll have a number of years of historically tight championship battles. That will be terrific, too.
So all we want is the right playoff format, and then if somebody's dominant, they're dominant. If they're not, well that will be terrific.

Q. Next year about a third of the field doesn't have sponsors. Caterpillar is moving from Bill Davis Racing, a team that didn't make the Chase, to RCR a team that did. Checks is moving from Petty Enterprises which didn't make the Chase to RCR, which did. U.P.S. is moving from Michael Waltrip which didn't make the Chase to Roush Fenway which did. Army is moving from DEI to Tony Stewart's team which is expected to contend. Have you gotten any concerns or feedback from car owners that the Chase format is making it extremely difficult for people not in The Chase to get sponsors? And are you worried that that will skew the battle of sponsorship dollars?
BRIAN FRANCE: No. Each illustration they use would, in my view, have happened anyway, chase or no chase. You know, teams that are running consistently better are doing consistently better at the sponsorship game. That's just how it works.
And for the various teams to do better, the economy certainly plays in a role that is out of their control. What is in their control is to perform better. They're trying to do that. By talking to each and every one of them who are having sponsorship difficulties, they acknowledge it's two-front. It is definitely the economy. There are not as many companies who are putting big marketing bets down today as there were 12 months ago.
And then most of them would say, hey, I've got to get my performance up to make myself more attractive. So it's really those two things that are in play. And the Chase elevates all of that, quite frankly. Doesn't pull one down or one up.

Q. You mentioned earlier about ABC moving the race over to ESPN2. You said you had talks and were working on things in the future. What can be done in the future to prevent such an occurrence, or when might it just have to be acceptable? And is one option the possibility of earlier starting times to be careful from that run up to primetime?
BRIAN FRANCE: I think what's important is ABC and ESPN and NASCAR, you know, our interests are aligned. That doesn't mean we always, you know see eye to eye on every issue, but they want to do what is in the best interest of the NASCAR race fan which they serve week in and week out in lots of ways.
So they did not like the idea of having to pull out of, you know, off of ABC and offer it the way they did on Sunday. That said, it is imperative that we work closely together with them for scheduling, and to have other considerations that certain, in this case, a red flag which took the event another 30 minutes or more out of the window that they had planned, and that's a very unusual thing at Arizona this time of the year. So that probably wasn't anticipated.
But the most important thing is while we're not pleased with what happened on Sunday, our interests are very much in line, and they do not want to do anything but the best coverage for our race fans, and that we have a lot of confidence we'll figure out.

Q. Do we have any sense of where you guys will finish at the end of the year in terms of revenue, up or down on a percentage basis? How can we quantify what the impact of this economic downturn has meant for you guys?
BRIAN FRANCE: Well, there are pressures on certain revenue streams that are pretty obvious to us - sponsorship being one. Certainly in markets of attendance has definitely suffered. I equate that somewhat to high fuel prices as well. It's not just a tough economy, but it's a combination of those things.
A lot of things we won't know until the future because they were booked in, you know, multiple year contracts and so on. But, look, what's important is that our fans are under an enormous amount of pressure, forgetting NASCAR for a moment. But just a general running of their lives and making it all work.
So we're a part of that. We're a small, hopefully wonderful part of someone's entertainment and fun-time on the weekend. What we're going to be working on is making sure that we're sensitive to these tough times and doing everything we can for our teams as well. Holding the costs down, getting costs out so they can operate their businesses more efficiently, like most other businesses are trying to do in almost every industry.
Then the tracks, as I said earlier, are going to work very hard to deliver as much value and be mindful of what the fan is going through just to make the commitment to come to one of our events, to buy our merchandise and be the greatest fans in sports. That's not going to go casually around starting with me and all the way down in our industry. We're going to be very, very aggressive thanking our fans for what they do every week.

Q. Sometimes we, all of us, tend to live in our NASCAR world and everybody who covers this sport and follow this sport. So there is a lot of conversation about the economy. Can you put it into perspective? We know All Americans are hurting, but what about other sports and conversations you've had? Because we are so much related to gas and automobiles and sponsors, how do you -- would you put the issues that NASCAR has in relation to the NBA, the NFL, and other national sports?
BRIAN FRANCE: I think there is far more in common than there is not. Number one, we share -- a lot of partners are our partners or their partners: Your broadcast partners, licensees, advertisers, you name it. We all count on the national economy to help drive our sports.
If you're in some of the other leagues have a big dependency on those sponsors buying suites and block tickets and so on, we don't have quite that significant of an impact.
But the point is that when the economy is this difficult, I think all of the sports will feel it, maybe not equally, you know, in every category, but I think on the aggregate when you pull all together, we're all very similar in the impact.

Q. I have a question regarding the Grand Am Series which NASCAR recently acquired. Do you foresee the schedule and the venues where Grand Am races pretty much staying the same in the future? Or do you see an effort to try to integrate those races with the NASCAR weekend? In other words having more Grand Am races at the same track, and is that the same weekend as a Sprint Cup race? Also, has NASCAR in any way encouraged Sprint Cup teams to consider fielding a Grand Am team?
BRIAN FRANCE: Well, I would say yes on all of that. There's limits on the integration of our events because the grand America, of course, is road racing, and they rely more on historically important road race facilities. So, sometimes that works, and sometimes it doesn't.
We would love to see, because it's a different style of racing and it is a different, frankly, a different demographic as well, we'd like to see team owners like Chip Ganassi who has been in the great America for several years now. When it makes sense for them to field competitive teams, that heightens and elevates that series. It gives another opportunity to team owners who are looking to analyze their business investment in Motorsports to a different audience.
So there are lots of different reasons we'd want to see a cross-participation. In an extent we can put events together which we have done in the past, we will. But that would be somewhat limited, as I said, based on what historically important road racing facilities are available.

Q. In your estimation, how healthy is the sport right now? You have teams that built this thing. Pettys are struggling terribly, trying to merge. You know, Wood brothers are on their last leg, trying to figure out a way to keep racing. And it's hard to go out and get $26 million bucks. You have teams trying to get multiple sponsorships to stay on the racetrack. In your estimation, how healthy is it? In this economy, is it the worst the sport has seen monetarily since the early '70s?
BRIAN FRANCE: Let me say that obviously, it's very difficult. It's on our whole industry. And there are always some unfunded teams. Now, that's not anything new. One of my goals and one of our goals is to have a system where you don't need $26 million to put a competitive team forward. So that is one of the things NASCAR has a lot of influence on and we're working all the time to figure that out.
But there is no question that with advertising and marketing budgets coming under lots of pressure, that we are, as I've said for many months now, we will not be immune to those kinds of reviews.
I would tell you, the good news is that we're talking about 90% of the industry is sponsors, or more, speaking of the Sprint Cup Series. And we have brought on some new companies that will be ready in place for 2009. And sponsorship values are at an all-time high as to what they deliver for companies.
Now that doesn't give you a pass if the general economy contracts a lot, but it certainly helps as they look at things they can't afford to do in the future. Usually, we're one of the last things that they don't want to continue, because they know that it works so well.
Most of the companies, even in tough economic times do want to sell their products and services. So we will come out of this, and we will do our part with the rest of the sports and entertainment to weather the storm. And we've been here before with energy crisis and 9/11, and many other recessions and so on. And it's never fun. It's never easy on our team. It's never easy on us, but we'll get through it.

Q. Considering how much NASCAR is effected by outside economics, has this downturn served the limits of NASCAR's growth? Once this downturn is over, would the sport go back to the old days, old business model, everything doing great? Or does it have to get leaner and meaner and do things have to change with the business model?
BRIAN FRANCE: No, it needs to get leaner and meaner all the time, in terms of what it cost for race teams to field a competitive team. And that is an ongoing effort of ours. We're going to be more aggressive on it.
In fact, there are lots of areas that NASCAR could cut. And I'm speaking now of the sanctioning bodies that we won't. Because when this economic turn turns around, our -- we're going to be very aggressive continuing to go after a bigger fan base. Get more people interested in NASCAR. That's why we're not going to discontinue a lot of the things that are long-term benefit to the sport. Everyone can win when we get more on solid ground.
What we've talked about the economy is two things for us; It's obviously the sponsorship which we've talked a lot about today, and the pressure on our fans to attend the events. Those are the two critical areas. So we have -- so we've got to take caution out of the system -- cost out of the system and all that.
But we can't do things that don't look at attracting new fans in the future. We're based around trying to make this sport bigger and not smaller.
DENISE MALOOF: Thank you very much for your time today we appreciate it.
BRIAN FRANCE: Thank you. Thank you, everyone.

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