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Archive for the tag “Pete Dye”

Spending at the Speedway

The band ’63 Burnout has a song called “Trouble at the Speedway,” a very Dick Dale-ish surf guitar instrumental.  Good stuff.  The title made me ponder some of the current troubles at the Speedway.  Money was one that came to mind immediately.

Don’t get me wrong.  I am all for free enterprise and charging whatever the traffic will bear.  The object of business is, and always has been, profit.  I applaud IMS for finally monetizing everything in sight.  It’s the American way.

For years, IMS was the best value of any major sporting event in the world.  They could afford to be.  The track made money every year by having massive crowds for both Pole Day and Race Day.  Limited and very reasonably priced concession offerings sold well.  The corporation did not own a money-hemorrhaging racing series and simply mowed, painted, and repaired the facility until the next May.  Life was good.  All of the Hulman family had some folding money in their pockets and seats in a convertible for the parade as well as being Midwestern royalty reigning over a rather provincial outpost.  Who could ask for more?

Well, it seems the Speedway tired of being a once a year monument to speed, so they spent money like the lottery winners they were to make IMS a world class venue for other racing.  They erected the Tower Terrace Suites, made a goat ranch into a world class Pete Dye golf course, built a new Pagoda and garages, and added a road course in the middle of the once sacrosanct oval.  With all this building came NASCAR, F1, and the PGA.  The money train was on the tracks and rolling.  At least it was until F1, as it always does, found a better offer, until the golfers moved on, until the blush was off the NASCAR rose and the crowds dwindled, and until the formation of the IRL killed the popularity and profitability of the series and, to some degree, the Indianapolis 500.

There are a couple of different ways to deal with the loss of profitability.  The easiest way is to cut costs as IMS did.  Defer maintenance.  Sell your private jet.  Hire a skeleton crew to run your money-sucking series.  Deny requests to add much needed personnel.  Another way is to apply modern sports business knowledge to the idea of making more money.  Promote the product.  Hire the right people and let them work.  Add events.  Start charging for everything that has value.  This is Indy today.

Want to glamp? It will cost you.  Need preferred parking?  Pay up.  Need video boards?  The tickets cost more.  Hungry for a new cuisine or thirsty for a craft beer?  Pull out your wallet.  Want to watch practice?  Peel off a fin and a sawbuck ($15) for the privilege.  IMS should have marked everything up years ago but held onto the outdated notion of Tony Hulman that the facility and the race were public trusts.  While it is true that the track is on the National Register of Historic Places, it is still a business that needs to profit.  Do you really want to see the patrons howl?  Wait until the Speedway decrees that coolers are no longer welcome as a safety decision.  Talk about a new revenue stream!  And it is right for both safety and profit.  Nothing makes a capitalist happier than being able to justify profit in the name of Homeland Security.  The customers cannot argue.  I’m holding out hope that IMS uses a sponsor to offer a spectacular beer and cooler deal to the fans when the time comes, though.

Get used to it.  The Indianapolis Motor Speedway is going to get deep into your pocket for all the right reasons: profit and sustainability.  The old FRAM Oil Filter commercial used to have a mechanic saying, “You can pay me now, or pay me later.”  For fans of the Indianapolis 500, later is now.  Pay up.

 

 

Figures lie: IndyCar, golf, and sponsorship

The week when the Verizon IndyCar Series races at Barber Motorsports Park in the Honda Indy Grand Prix of Alabama is the chance for writers to channel their inner Herbert Warren Wind¹ and wax poetic about the verdant greenways, majestic views, and oddball sculptures of the facility  Some even say it is the Augusta National of the racing world.  High praise, indeed.  Of course, in the racing world, any green grass seems like Augusta National when compared to the asphalt and concrete of a city street course or the dead brown of Sonoma.  Kudos to Iowa for the corn, though.  Not quite Augusta-like but it does have a certain waving-in-the-wind grandeur.

In any case, a compelling storyline exists with the relationship of televised golf and its sponsors and what IndyCar may be trying to do to milk value from what, by any definition, is a small television audience.  Golf succeeds for more reasons than just television advertisers.  The sport has deep-pocketed event sponsors who pay millions to host a single event.  According to an article by Patrick Rishe in Forbes, all 42 PGA Tour events are sponsored for between $6 million to $12 million annually with sponsor FedEx re-upping for $35 million annually to sponsor the FedEx Cup.  Nice numbers, huh?  And that doesn’t include TV money.  The PGA does have the advantage of being on four days in a row each week, but, other than the majors, it does not routinely knock the ball out of the park.  The recent Texas Open final round had a 1.6 U.S. rating the week before the Masters on NBC.  Why does the PGA tour continue to rake in dough from well-heeled advertisers?  In a word, demographics.

The sponsors of the PGA tour read like a who’s who of high end living: BMW, Cadillac, Audi, Bridgestone, CDW, Charles Schwab, Citi, MetLife, Rolex, Mercedes, etc.  Why do these companies pay so much to advertise and sponsor a sport that gets relatively low ratings?  Why don’t they go to NASCAR and the WWE, two properties that regularly ring up much higher numbers?  Simple.  The 1% does not ordinarily watch those shows.  They watch golf.  Numbers may not lie, but they can certainly mislead.  High end advertisers want to go to where the viewers have the most money, not necessarily to the event with the most eyeballs.

What does this mean for IndyCar?  Maybe nothing.  Maybe everything.  If you are promoting a niche sport, which IndyCar racing is right now, you need to appeal to an audience that spends the most money.  Glamping at the Indianapolis Motor Speedway anyone?  Want to listen to Hardwell in the corporate Snake Pit with VIP access?  All you need is disposable income.  IndyCar can grow as a property without beating NASCAR’s numbers as long as the right kind of viewers are attracted.  Can IndyCar attract those fans to the races and the television?  The devil is in the details, they say.  City street courses are certainly closer to the high end consumer, which is a great reason to keep them on the schedule.  It would seem to make sense that people who invest money to attend races are the same people who become invested as viewers of the series.  IndyCar and its easy access paddock and personable drivers are a great way to capture the interest, and the hearts, of its fans.

If the answer to creating a successful and financially viable series was simple, it would have been done by now.  The current brain trust at IndyCar/IMS is taking a measured approach to building the series, as it should.  Have they identified their target demographic?  I hope so.  If not, then maybe the PGA tour is interested in coming back to a Pete Dye designed course at 16th and Georgetown in Speedway.  There will be plenty of room for parking.

1.  Herbert Warren Wind was a golf writer who coined the phrase Amen Corner for holes 11, 12, and 13 at Augusta National, home of the Masters.

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