Forbes ranks the Daytona 500 as the 4th biggest brand in sports in terms of its dollar value. NASCAR is big, and as one the fastest growing major sports in the country, is getting much bigger. This year’s green-white-checkered http://www.youtube.com/watch?v=m3-hJFTZe08 >shootout at the end did not top last year’s ratings (which benefited from the Winter Olympics coverage) but still finished among the top 5 all-time. Revenue from advertising during the race has doubled in the past 5 years, and this year some 30 second add slots fetched as much as $500,000.
After the success of our Superbowl Portfolio, I wanted to see if a similar pattern of outperformance existed for top sponsors of the Daytona 500. A portfolio of such stocks over the past 5 years can be found here. Unlike the portfolio of Top Super Bowl Advertisers which outperformed the market, the top Daytona advertisers have seriously underperformed the market, at least in the past 5 years, returning only 10% versus over 30% for the S&P 500. Why the terrible underperformance? Most of it can be attributed to Ford and GM, which for obvious reasons advertise heavily during the big races, but for unrelated reasons have had terrible stock performance.
The same problem of stock underperformance also applies to the sponsor of the winning driver. According to CNNMoney.com, the sponsor of the winning driver has underperformed the market 12 out of 20 times the following year. Unfortunately I don’t have the raw data to properly analyze their numbers, but they don’t look good. This year’s winner was Kevin Harvick, and his primary sponsor is Shell.
