NASCAR Gets "Sweetened"

We often like to think that our entertainment, especially sports, is an escape from everyday life. We like to think that sports exists in a world of its own, protected from market forces and even worse—politics. But the truth is that these things do influence sports, sometimes for the better, sometimes for the worse. I’ll let you decide where the following example should fall.

I was doing some work a couple of weeks ago which required me to sift through all 400+ pages of the financial bailout bill passed in early October. As we know, the original bill failed to pass in the House and it was sent over to the Senate where it proceeded to be nailed with “sweeteners” and other swine meat in hopes that it would pass on the second go-around. One “sweetener” that caught my eye will extend a tax rule for two years classifying racecar tracks and other motorsports facilities as “amusement parks and other entertainment complexes.”

Huh? I guess it’s amusing to drink Budweiser and watch cars go in circles hoping for a big crash. But last time I checked, NASCAR was a sport. It turns out that the “amusement park” classification allows track to write off their capital investments over a seven year period as opposed to fifteen years that would have been required due to an IRS inquiry into motorsport investment practices. This distinction will have the effect of reducing a track or facilities overall tax bill once their investments have been written off. Technically this is not a tax break but will provide an incentive for motorsports companies to invest in new projects and facilities. NASCAR executives in particular were happy with this development who are eyeing track improvements and expansions in the coming years.

So why add this “sweetener” to the second version of the bill? Interestingly, a separate bill aimed at instituting this classification was sponsored in the House a few months before by Rep. Mike Thompson, D-CA, and co-sponsored by Rep. Robin Hayes, R-NC. This bill, however, failed to get legs and puttered out. Now, Thompson voted against the original bailout but then flipped and voted for the bailout the second time. Hayes voted against twice. It is unclear whether Thompson flipped because the Senate added this “sweetener.”

This is an interesting case study for many reasons. One, it shows the ugly political underbelly of getting legislation through Congress. What could have been a pure bill focused on the bailout itself was subsequently muddled with add-ons unrelated to the essence of the bill. But it also reveals the governments continued relationship with sport and makes clear that sport business as well as entertainment.