Indy Car Promotion - Why no Discussions Here

[WheelerDealer]

While some references have been made to Las Vegas getting a free ride on the sanction fee, is it not the case that IndyCar is the promotor and are paying a rental fee to the track? I thought that Bernard has clearly indicated this to be the case and has plans to add more promotions to the fold.

His comment is based upon the PBR example where they eventually took over all promotions and scheduling. I like the idea, and I am not discounting what C^RT did previously. That was done out of necessity, while Bernard wants to roll this out as a strategy. They are leasing the hospitality and everything like suites at LVMS. I think this is the direction they need to go to ensure their viability going forward.

Consider the NASCAR model where the tracks get a portion of the televisions rights fees up front. This allows them to sell a lower cost sponsorship as profitability is likely assured before tickets are broadly sold. It is hard to compete against that model.

[PenelopePitstop]

Why no Discussions Here?

Because this is the racing forum, not the Biz forum.

[crsfulk]

While some references have been made to Las Vegas getting a free ride on the sanction fee, is it not the case that IndyCar is the promotor and are paying a rental fee to the track? I thought that Bernard has clearly indicated this to be the case and has plans to add more promotions to the fold.

His comment is based upon the PBR example where they eventually took over all promotions and scheduling. I like the idea, and I am not discounting what C^RT did previously. That was done out of necessity, while Bernard wants to roll this out as a strategy. They are leasing the hospitality and everything like suites at LVMS. I think this is the direction they need to go to ensure their viability going forward.

Consider the NASCAR model where the tracks get a portion of the televisions rights fees up front. This allows them to sell a lower cost sponsorship as profitability is likely assured before tickets are broadly sold. It is hard to compete against that model.

I agree. If the game doesn't work for you, change the strategy. Let's just hope that the family gives the support financially and timewise.

[WheelerDealer]

Why no Discussions Here?

Because this is the racing forum, not the Biz forum.

Your input is very helpful

[Z28]

I do think the age old way of charging a promoter a sanctioning fee and then leaving ticket sales and event promotion to him should be abandoned. It simply puts too much of the potential for success or failure in the hands of someone else. It seems like Randy is using Las Vegas as a test case, and giving away tickets is not going to the future, not in any fantasy world. But the series selling sponsorships, suites and hospitality is the key. He may have the connections in Vegas to do it but he doesn't have the talent in house to repeat the formula in Chicago, Kansas City, Richmond, Boston and beyond so you wonder how it transfers.

You're not competing with the NASCAR model since half their season they deal with their other company ISC and the tracks on the other half wouldn't be in business without their biggest revenue source, NASCAR races, so they're willing partners. And nothing applies to what INDYCAR would need to do to start on the track rental self promotion path. They would be developing a new model as they went and like I said, they would need a talent infusion to make something that untried work in racing.

[Fro]

Bernard's done a great job lining up support for the Vegas race.

Getting the Las Vegas Tourism & Covention Board and MGM Resorts was huge. Most of the existing sponsors are all pitching in with something as well.

[nascarnation]

To me it seems like the promoter is the guy who would understand the nuances of what it takes to get local people to come to an event.
While the US is a pretty homogenous society, I would think there is still a lot of value provided by a local promoter.

[jcmark611]

What does IndyCar get when they rent a track? Does IndyCar have to provide concession and sanitation services? Just curious how expensive this all runs.

[Buellboy]

It seems like Randy's business model for Vegas is similar to what the AMA does for Supercross. I doubt NFL football stadiums are paying sanctioning fees for motorcyle racing.

[jcmark611]

I guess the biggest question, and the biggest obstacle to this....

Where does the TEAM money come from if the series isn't getting sanctioning fees?

[Frank Capua]

There's no Varoom Varoom in this thread... Why is there no Varoom Varoom in this thread?

[Fro]

I guess the biggest question, and the biggest obstacle to this....

Where does the TEAM money come from if the series isn't getting sanctioning fees?

The money they make from staging races.

[use2know]

The money they make from staging races.

If 'the money they make from staging races' isn't currently enough to cover the sanctioning fee for the oval owners, then how is that situation going to be different for the series when they rent the facility....?

[crsfulk]

If 'the money they make from staging races' isn't currently enough to cover the sanctioning fee for the oval owners, then how is that situation going to be different for the series when they rent the facility....?

Realistically, we and probably Indycar, do not know the true balance sheet for the tracks. In this "new" model, the track will ge X amount for the facility and possible some for the local expertise. All other line items would then be on Indycar's balance sheet. They would be able to set prices as needed by the market and inturn they would know exactly where the balance sheet stands at any given time based on actual and projections. If this is going to work, the series needs to go out, spend the necessary fund to get the best and the brightest to head-up this PR/Marketing Department. If the BOD allows the initial expenditure, I can see this being a game changer for our sport. If not, then it will be SSDD.

[PenelopePitstop]

Your input is very helpful

Now that this topic is in the correct forum I'll weigh in.

I have no problem with the series finding out just how much their product is worth. I just worry that they might not have the expertise to properly handle everything this undertaking entails. Lining up sponsorships in local markets, dealing with local government officials, local media outlets, vendors, etc. Tons of time and energy and connections that the series probably lacks.

Las Vegas will be interesting, but keep in mind that RB in the past operated his PBR organization from LV, so he knows the lay of the land there. But what does he know of politics and the media in Mansfield, Ohio or Newton, Iowa? Big difference.

Not saying it can't be done. The plan makes sense if the organization is professional enough to make it happen, but I'm more than a bit skeptical of the soundness of the team that is about to attempt this. Good luck to them.

[crsfulk]

Not saying it can't be done. The plan makes sense if the organization is professional enough to make it happen, but I'm more than a bit skeptical of the soundness of the team that is about to attempt this. Good luck to them.

That is the key to this being successful! If they get good, solid people in place it will work.

[use2know]

Realistically, we and probably Indycar, do not know the true balance sheet for the tracks. In this "new" model, the track will ge X amount for the facility and possible some for the local expertise. All other line items would then be on Indycar's balance sheet. They would be able to set prices as needed by the market and inturn they would know exactly where the balance sheet stands at any given time based on actual and projections. If this is going to work, the series needs to go out, spend the necessary fund to get the best and the brightest to head-up this PR/Marketing Department. If the BOD allows the initial expenditure, I can see this being a game changer for our sport. If not, then it will be SSDD.

I'm no expert in the intricacies of motorsports event financing... far from it. But my 'better half' spent quite a few years in the employment of a track ownership group. Her responsibility was Media and PR. She also worked hand-in-hand with the Marketing and Sales departments. Admittedly, she is now on the outside, but with her prior knowledge of the X's, O's and balance sheets she did have access to in the not-so-distant past, she still has a hard time understanding how the Series will be successful in generating enough money to offset the loss of the sanctioning fee when the 'market' for the facilities would not previously allow for tracks to generate the funds and also turn a profit in the first place.

By your own admission, you suggest that the Series would need to "spend the necessary funds" for the 'new' model to succeed... If the 'new' model is going to encompass all ovals, there will need to be more than just a new 'Wiz-Bang Wunderkind' to head up PR/Marketing... You will most likely also need to expand the Series staff to meet the additional duties of handling the sale of ALL local signage... booking ALL remaining available local suites... handling ALL local Ad buys... working ALL advanced media requirements... all of which use to be handled by the staff of the local facility, but is now racking up $$$$ in the expenditure column of the ledger. With the additional outlay of $$$ generate enough to offset the loss of the $1.5 Million check per oval... and allow the Series to write those all-too-needed TEAM checks at the end of the season without doing so in red ink...? At this point in time, my wife's confidence level in that model succeeding is not exactly on the high side... and neither is mine.

[Fro]

Realistically, we and probably Indycar, do not know the true balance sheet for the tracks. In this "new" model, the track will ge X amount for the facility and possible some for the local expertise. All other line items would then be on Indycar's balance sheet. They would be able to set prices as needed by the market and inturn they would know exactly where the balance sheet stands at any given time based on actual and projections. If this is going to work, the series needs to go out, spend the necessary fund to get the best and the brightest to head-up this PR/Marketing Department. If the BOD allows the initial expenditure, I can see this being a game changer for our sport. If not, then it will be SSDD.

You're using the resources of IndyCar, various series sponsors, teams, drivers, and TV all to sell the races instead of just the local track out on an island sans having some media availability for drivers. That's where you get your extra sales.

The big key is using your TV clearance to sell your product. If they had plugged during the Indy 500 broadcast that Milwaukee is back on the schedule and call this number to buy tickets that race would have been successful and back this year.

[WheelerDealer]

I'm no expert in the intricacies of motorsports event financing... far from it. But my 'better half' spent quite a few years in the employment of a track ownership group. Her responsibility was Media and PR. She also worked hand-in-hand with the Marketing and Sales departments. Admittedly, she is now on the outside, but with her prior knowledge of the X's, O's and balance sheets she did have access to in the not-so-distant past, she still has a hard time understanding how the Series will be successful in generating enough money to offset the loss of the sanctioning fee when the 'market' for the facilities would not previously allow for tracks to generate the funds and also turn a profit in the first place.

By your own admission, you suggest that the Series would need to "spend the necessary funds" for the 'new' model to succeed... If the 'new' model is going to encompass all ovals, there will need to be more than just a new 'Wiz-Bang Wunderkind' to head up PR/Marketing... You will most likely also need to expand the Series staff to meet the additional duties of handling the sale of ALL local signage... booking ALL remaining available local suites... handling ALL local Ad buys... working ALL advanced media requirements... all of which use to be handled by the staff of the local facility, but is now racking up $$$$ in the expenditure column of the ledger. With the additional outlay of $$$ generate enough to offset the loss of the $1.5 Million check per oval... and allow the Series to write those all-too-needed TEAM checks at the end of the season without doing so in red ink...? At this point in time, my wife's confidence level in that model succeeding is not exactly on the high side... and neither is mine.

My only reaction is that the local model is not working for IndyCar when it comes to most ovals. I do not think IndyCar intends to move to this model overnight, but they may be taking on Kentucky next year. One thing IndyCar knows is its product. It also can tap into national markets for sponsorship at the local level. Once you have major sponsors, you then create the promotional aspects asking the sponsor to accept a certain level of tickets and associated hospitality. You then lean on related sponsorship tie ins. It is not an easy course, but one that can be done feasibly. It is a ton of hard work, but the rewards are high. A viable scheduling process, revenue, and greater exposure.