NEWS & ANALYSIS
Not Enough Return on Investment?
By Jeff Burk
5/26/06
In a typically worded press release dated Thursday, May 25, Don Prudhomme’s Snake Racing announced that the 11-year sponsorship of that team by the Miller Brewing Company would cease at the end of the 2006 season. This cannot be viewed as anything less than a disaster for the National Hot Rod Association and championship drag racing in general. Miller Brewing has, except for a five-year period from about 1990-1995, been one of the NHRA’s premier sponsors.
Miller has been the major sponsor of drag racing icon Don Prudhomme’s Top Fuel car, arguably one of the NHRA’s premier and most visible teams in the last decade. Driver Larry Dixon won back-to-back World Championships in 2002 and 2003 and finished second in points in 2001 and 2005. The team finished in the top five in points seven times between 1995 and 2005. That is a stellar record by anyone’s standards in the world of sports, and one that should have delivered the kind of brand exposure Miller Brewing was looking for. Certainly Dixon’s record as a driver far exceeded that of NASCAR’s Rusty Wallace, who was also sponsored by the Miller Brewing Company.
Painfully for professional drag racing, the management at Miller Brewing didn’t believe they were getting enough fan exposure for their investment and they made the decision to pull the plug on their drag racing sponsorship.
In the press release from Prudhomme’s team, Jackie Woodward, VP of programming, media and marketing assets is quoted as saying “…this was a difficult but necessary decision as the company (Miller Brewing) strives to make the most effective use of its marketing expenditures.”
The simple translation of that statement is that the sponsorship of Prudhomme’s car wasn’t selling enough Miller Lite beer continue to justify the cost.
The question for the sport of drag racing is will Miller simply move its sponsorship to another pro team for a lot less money or completely get out of the sport of drag racing? If the answer is the latter, that could be very bad news for future major corporate involvement in drag racing.
Perhaps part of the reason Miller left could be that NHRA didn’t really allow Miller to compete in the NHRA marketplace with the Budweiser brand. Budweiser, as the official beer of the NHRA, got preferential treatment when it came to almost everything. From sponsoring a Top Fuel shootout to signage to room on the midway, the Budweiser brand was certainly the king of NHRA drag racing. Maybe if the NHRA has allowed a little more competition between the two brands things might have turned out differently. Who knows?
All that Don Prudhomme knows is that despite many great seasons his Top Fuel team has lost two major sponsors in two years and in both cases the companies did not feel they were getting a return on investment and therefore pulled the plug. And it wasn't the team's fault -- Prudhomme, Larry Dixon and Dick LaHaie didn't do anything wrong.
The problem appears to be that although the current management team at NHRA is very skilled at cutting costs and increasing profit margins for the company, they don’t have the skill sets to increase drag racing’s popularity enough to satisfy Corporate America. The biggest track on the NHRA circuit holds just about 40,000 people and even if you fill the stands all three days to capacity that still isn’t a big number. The TV ratings are a matter fact; poker and women's soccer get bigger numbers.
By any sports standards, major NHRA teams are struggling to get and keep major sponsors that will make a major commitment to the sport. The much-ballyhooed sponsorship of a Top Fuel team by UPS came with little more than the actual sponsorship of the racecar and appointment as the official NHRA shipper. So far I’ve seen no TV ads, print ads, inflatable balloons, Jumbo-Tron ads, track signage or any other effort by UPS to attract the sports fans at home or at the track.
Perhaps the management team running the NHRA should quit being quite
so obsessed with profits and margins and instead start spending a lot
more of the money they are making (according to their own tax returns
they had $3.5 million in the bank at the end of the 2004 season) and start
spending a large part of that money to advertise and promote the sport.
