LESSONS TO LEARN
Given my decades of involvement in open-wheel racing (I hold membership No. 1,000 in the Indianapolis 500 Oldtimers Club), several people – including the editor of this magazine – have asked me if the united IndyCar Series is a fresh threat to drag racing sponsorships.
It’s a legitimate question. So, while at the Speedway last month for my 32d 500, I took a look.
The short answer is: Not really.
Yes, it’s a general theory of sports marketing that everybody is competing against everybody else for the corporate buck. Sports marketers, though, aren’t looking at every property through the same evaluation lens. Just as money that gets spent on an official NFL sponsorship isn’t necessarily cash that would ever have found its way into NHRA, drag racing teams must steer a different course than IndyCar operations when going for the green.
I won’t get into a dissertation about demographics right now, but let’s consider scale. The major nitro teams are spending $3 million plus to contest the Powerade championship. Those contending for the IndyCar title need $7 million-to-$10 million. A top NASCAR team owner – who has won races this season – told me two months ago those seriously chasing the Sprint Cup are zipping through $30 million. On a good Formula One car, $50 million might get you a bumper sticker. (I’ll suggest a slogan: Honk If You Can Read This on TV!)
Cruising through Gasoline Alley, it appeared to me the days have passed of a Rachel’s Potato Chips making it to Indy’s victory lane as primary sponsor. But several teams – including 2004 winner Buddy Rice’s – have zero or thin backing. That’s a key factor in the Indy Racing League’s decision to put a soft cap of 18 races on its first, all-important, unified 2009 schedule. In theory, it will combine the best of IndyCar and Champ Car.
“We need to be judicious about expansion,” admitted Terry Angstadt, president of the IRL’s commercial division, “because we know where we are from a growth and development standpoint and to not exceed team budget capabilities.”
NHRA must schedule with the same understanding of its competitors’ financial limitations. Meanwhile, with ratings up on ESPN2, solid crowd counts, and the most fan-friendly atmosphere anywhere in sports, NHRA teams are best served playing to those cost-effective strengths in a challenging sponsorship environment.
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I interviewed Jeff Gordon in April. Our conversation turned to some Business of Racing issues. This quote, about costs, got my attention because the four-time NASCAR champion is very biz savvy, especially in his dealings with sponsors DuPont, Chevrolet, Pepsi, Nicorette and others. Gordon also has an ownership stake in Hendrick Motorsports.
“I see a side of it most drivers don’t. When I see how much it takes to keep Hendrick Motorsports going, it’s scary. So much of that is dictated by sponsorship and we’re fortunate to have good sponsors. It makes us try to not take things for granted. We’re constantly asking for more so we have to continue to give more.”
Every drag racer who interacts with sponsors should memorize that last sentence.
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Imagine the shock waves in the drag racing world if Castrol discontinued its association with John Force. Well, in a sign of the economic times, Target recently yielded its position with Tiger Woods’ foundation as sponsor of his December World Challenge golf tournament.
According to SportsBusiness Journal, the new asking price was $7 million. After five years, Target opted-out, replaced by Chevron.
It shows you where the money is – and isn’t – in this economy. The oil companies have it. The retailers don’t.
Even for Tiger.
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There was no Powerade Series race Memorial Day weekend, but NHRA got a couple of round wins, thanks to some of its big names.
Melanie Troxel – one week after her maiden Funny Car victory in Bristol – and husband Tommy Johnson Jr. were special guests at the annual pre-Indianapolis 500 Firestone/Honda-hosted breakfast meeting of the American Auto Racing Writers and Broadcasters Association. I MC’d the program on behalf of the country’s oldest and largest organization of motorsports media professionals.
Paul Page, anchor of ESPN2’s NHRA coverage, conducted a brief Q&A at the podium and TJ and Melanie did some individual interviews afterwards. No surprise to me, or anyone else who knows them, but the ProCare RX and Monster Energy drink drivers were pleasant and friendly and did a great job in front of the journalists – some of whom don’t cover drag racing. Melanie and Tommy made new media friends for themselves, their teams, sponsors and their sport.
Several teams, with shops in Brownsburg, Ind., again opened their doors to fans the day before the Indy 500.
Meanwhile, John Force, Mike Neff and others were at Lowe’s Motor Speedway, promoting the inaugural Carolinas Nationals to the media and fans before NASCAR’s Coca-Cola 600. Neff did a big-time burnout in his Mustang in front of the main grandstands.
NHRA should make it a priority to actively seek out these kinds of opportunities on an on-going basis.
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Take this for whatever you think it’s worth: Here’s a portion of an interview the Charlotte Observer published last month with Bruton Smith. For clarity, I’ve added notes inside parenthesis:
Q. Are you still interested in buying the National Hot Rod Association?
A. “I had a strong interest, and after things slow down after this month (Coca-Cola 600 weekend), I'm sure we'll probably be talking again.
“I like drag racing. It's the one motorsport that we can say is really growing. We've made a big commitment (building a new track for the Sept. 12-14 Carolinas Nationals). Maybe one of these days we'll be able to accomplish something. But so far so good.”
