IRL closing gap in race for sponsors
By Dana Knight, Gannett News Service USA TODAY INDIANAPOLIS — Budweiser couldn't have ordered up better exposure: its name splashed across Juan Montoya's winning car at the 2000 Indianapolis 500. When it came to a promotional gig, this was the epitome.
But Anheuser-Busch switched Budweiser from a Championship Auto Racing Teams sponsorship to lay its money for this year's race on another table — the Indy Racing League, and drivers Al Unser Jr. and Casey Mears.
The race between CART and the IRL for sponsorship dollars is heating up and is expected this year to make a turn toward the IRL. According to some analysts, the six-year-old league will take its largest share ever from CART.
In 2000, the IRL's corporate sponsorship earnings were projected to jump to $143 million from $121 million — a 1% gain in total share of motorsports sponsorship. Meanwhile, CART was expected to drop 1% in its total share but still take in $492 million.
"We think IRL really will hit it big this year," said William Chipps, senior editor for IEG Sponsorship Report, a biweekly newsletter covering sports entertainment and marketing.
The gap has closed already, said Bob Reif, senior vice president of sales and marketing for the IRL and Indianapolis Motor Speedway.
He disputed IEG's projections and said IRL's assets have doubled in the past 17 months with corporate sponsorship dollars exceeding $200 million in 2000.
CART spokesman Ron Richards declined to discuss specific dollar amounts for his series. "We have a pretty good idea about that, but because of the competitiveness, we don't talk about that," he said.
CART has been called sluggish by analysts and, according to a Street & Smith's Sports Business Journal report in April, stands to lose the contract with its largest sponsor, FedEx.
"They're our series sponsor through the end of this year," Richards said. "Our negotiation continues this year."
Movement toward IRL
That seems to be how the story is unfolding for CART: Wait and see, Chipps said.
"CART's been kind of struggling this year," he said. "IRL has followed CART, and I think they probably still do. But IRL has made some inroads."
The shift to the IRL started in January 2000, when Reif came on board to oversee a program to seek sponsors aggressively. His first move was to hire 30 more people to devote to customer service. Before that, the staff had been three.
Many of those new employees were assigned to the sponsorship service group, a crew whose sole job is to aid teams and drivers in seeking sponsorships. Traditionally, teams are on their own.
"It's totally rare to have something like that," Reif said. "This is about the growth of open-wheel racing and the Indy Racing League. We are committed."
Last year, Reif's team began building relationships with companies, visiting 150 throughout the United States and filling them in on the IRL. This year, that number will double.
For the Indianapolis 500, IRL will fly in 10 chief executive officers who have never been exposed to racing before, set them up at the Canterbury Hotel, fly them to the track in a helicopter, offer free golf and give them pace cars to drive around the track.
"For five years, Tony George spent all of his energy and all of his money developing a great product," Reif said. "Since January of 2000, the investment has been in the marketing of the product."
The reason is simple: It pays off.
Racing is expected to pull in $1.5 billion in corporate sponsorships this year.
Most sponsorships in CART and IRL cost $500,000 to $6 million. In NASCAR, that figure can reach up to $17 million.
The price sounds extravagant, but take one of CART's longest-running partnerships — the Target/Chip Ganassi Racing team — and the returns are evident.
Just when the retailer thought its exposure couldn't get any better — Montoya drove a Target car for the victory in 2000 — it did.
Four of Ganassi's drivers have qualified for the 2001 Indianapolis 500 and will race in red speedsters with Target logos. "We'll have flashing targets and zooming targets everywhere," said Carolyn Brookter, spokeswoman for Target.
Whether it's CART or the IRL, she said, is irrelevant: "The (split) is water under the bridge."
Sponsorship deals are business transactions, not political maneuvers, said Mike Hull, managing director for Target/Chip Ganassi Racing.
Target hitting it big
If a Ganassi driver is at a race anywhere in the world, products with the Target logo are being sold.
A prime example came at the opening race of the CART season in Monterrey, Mexico. The trailer of T-shirts, caps and fleece pullovers sold out within hours.
"We had 10,000 people walking around Mexico in shirts with Target on them, and there's not even a Target in Mexico," Hull said.
And the people who really count are buying into it, said Chipps, the IEG Sponsorship Report editor.
"Studies consistently show that motorsports is basically the highest sports property when it comes to fan loyalty," he said. "These fans do support the products by all means — big time."
Procter & Gamble said it's uncovered a gold mine in sponsorship of IRL driver Sarah Fisher. The company has formed a business team to market her while promoting Kroger and its products — including Iams pet foods, Pantene hair products, Gain detergent and Folger's coffee.
"All the products, honestly, she uses," said Tim Waechter, retail operations manager of the Procter & Gamble/Kroger business team. "She has a dog and a cat. She's a coffee-holic, and she uses Pantene."
The 20-year-old Fisher has become a big payoff, he said, but Procter & Gamble didn't just happen upon an IRL sponsorship because it wanted Fisher. It handpicked the league.
"We looked at all three leagues (IRL, CART and NASCAR), and we knew the value equation was in the IRL," he said. "Then we started looking at teams in the IRL, and when we found Sarah, we had made the perfect match."