COUNTERPOINT: Should INDYCAR promote its own events?

This article originally appeared at INDYCAR Nation on June 20, 2012. To access More Front Wing’s INDYCAR Nation content as soon as it’s released, visit indycarnation.indycar.com.

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This week: Should INDYCAR promote its own events?

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STEPH says YES:

This weekend in Milwaukee, we learned something very, very important: when an event promoter is invested in the IZOD IndyCar Series, good things happen.

Andretti Sports Marketing has finally figured out the formula for oval event marketing. As it turns out, it was a simple fix: follow the street racing formula. Give people lots of activity to watch on track, and give them lots to do when they’re not sitting in the stands. In short, offer great value for the ticket purchasing dollar. Crazy concept, right?

While it seems so simple in hindsight, the fact that someone actually thought of it, implemented it, and made it work is a game-changer. It means the possibility of returning to Chicagoland or Kentucky or any number of other oval tracks is a thousand times more feasible than it was two weeks ago.

But this kind of forward thinking was never going to come from a traditional promoter whose sole interest in an event is the bottom line. What sets Michael Andretti and his team apart is that they were motivated to do some outside-the-box thinking and take some risks because they’re actively invested in the future of the IZOD IndyCar Series as a whole. They had an interest in looking past the numbers on paper to see which things work in other markets, what traits are the best sell to sponsors, and — this is a big one — why it was important to put so much effort in when a keystone of the sport’s history was on the line.

INDYCAR is rarely going to get that kind of buy-in from permanent track owners who promote for several different top-tier series, and it doesn’t always get that level of support from its street course promoters, either. Many events are content to put in exactly as much effort as is required to balance the books one year at a time with no consideration whatsoever given to future growth or the best interests of the sport as a whole.

In other words, it’s becoming clear that the traditional event promotion structure is holding INDYCAR back. It leaves the sport at the mercy of a whole bunch of people who just don’t care enough about the Series to play an active part in its growth.

It’s time for INDYCAR to break the mold. It’s time for INDYCAR to cut the disinterested middlemen out of the equation and take matters into its own hands.

It sounds crazy, I know. The finer points of implementing this suggestion are far more complicated than what I’ve presented here, and a lot of people who have been around this sport for a long time will just flat-out tell you that it’s not possible.

In fact, I probably wouldn’t even bother suggesting it were it not for Randy Bernard, one of precious few people in the sport’s history who doesn’t take “that’s just not how things are done” for an answer. Remember, Randy’s been successful at exactly this once before — he took PBR from a backyard niche sport and turned it into a major-league household name, and he did it through savvy promotion of his own events with a cohesive brand and message. Randy’s strongest assets are not yet being tapped by INDYCAR, and this is very possibly the way that he could have the greatest impact possible on the sport’s future.

If Randy could assemble a strong team like the Andretti Sports Marketing group and apply the same principles he used with PBR to INDYCAR racing, he could do more with less and finally get somewhere with this thing fast. The biggest hurdle would be getting the nay-sayers to examine what just happened in Milwaukee and say, “Hey, you know what? This still seems crazy, but it just might work.”

In other words, motivate people to do some outside-the-box thinking and take some risks to actively invest in the future of the IZOD IndyCar Series. When we can do that, good things happen.

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PAUL says NO:

This is a very interesting topic and one that has come to the fore over the past several years. INDYCAR fans have long claimed that the IZOD IndyCar Series is treated like dirt by International Speedway Corporation (ISC, owned by NASCAR’s France family) and Speedway Motorsports, Inc. (SMI). When it comes to promoting races, the resources devoted by those tracks to selling their NASCAR tickets outweighs their INDYCAR efforts by at least 10 to 1. As the old adage goes, “If you think you can do better, do it yourself.”

Unfortunately for INDYCAR, large corporations like ISC and SMI aren’t generally fond of letting another entity like INDYCAR just waltz in and take over their playgrounds.

There is no doubt that INDYCAR is in dire need of more ovals on its schedule. While the stated goal has been to maintain a 50/50 split between road courses and ovals, the balance has shifted heavily toward road and street courses.

That hasn’t happened because Randy Bernard and his gang are making a concerted effort to move away from ovals. The problem is that the business model for INDYCAR to race on ovals just isn’t working for the tracks right now.

The biggest problem is that the individual tracks owned by these corporations – which include essentially every major oval track in the United States except the Indianapolis Motor Speedway, Pocono Raceway, and Dover – are having problems making the finances work out when paying the sanctioning fee that INDYCAR is requesting for their races. It’s truly a “chicken and the egg” situation. The tracks claim the races aren’t worth what INDYCAR is asking. INDYCAR argues they would be worth more if the promoters did a better job promoting. ‘Round and ‘round we go.

Last year, in an effort to return to the Las Vegas market and make a big splash on the national stage, Bernard rented the Las Vegas Motor Speedway and self-promoted the INDYCAR World Championships, which was to be the season finale for the IZOD IndyCar Series. Instead of the track paying INDYCAR a hefty sum of money to host the race and taking on responsibility of promoting it, INDYCAR paid the track a rental fee and took all of the event’s promotion in-house. Bernard thought he had a model that could be financially successful, even if attendance was spare.

In the end, nearly all of the corporate suites were sold for the weekend and INDYCAR gave most of the tickets away to fans for free. Whether the event was financially successful will likely never be known for those of us not privy to the account books of the Indianapolis Motor Speedway Corporation, but if it had been a rousing success, we surely would have heard more about it. Even with the tragic events of that weekend, INDYCAR would have made a bigger public push to take this race event model elsewhere. Thus far, only one other such possibility has been floated, and that was to rent the Texas Motor Speedway so that INDYCAR could promote that event on its own. Track president Eddie Gossage scoffed at such an idea.

For INDYCAR to be successful in the long run, it must be seen by corporations like ISC and SMI as a valuable commodity that they are willing to pay for. Unless INDYCAR is going to go completely down the path of self-promoting all of its own events – a proposition that would take a massive amount of upfront resources that INDYCAR doesn’t seem to currently have and that the IMSC Board doesn’t seem to want to extend to it – trying to pick and choose which events INDYCAR should self-promote would only serve to deteriorate relationships with those tracks that INDYCAR leaves to fend for themselves.

Gossage has openly expressed dissatisfaction that he must both pay INDYCAR one of the highest sanctioning fees of the year and put in significant additional resources to market the event in order to turn a profit while Las Vegas Motor Speedway president Chris Powell was paid a healthy track rental fee and released of all marketing obligations. That sounds like a win-win for Powell and a lose-lose for Gossage. It’s understandable why he feels he was shorted, especially as one of the longest supporters of INDYCAR.

If INDYCAR is ever to regain its footing on ovals, it must do a better job of working with the tracks, not against or in spite of them. At the same time, the tracks must do a better job of trying to sell their INDYCAR events, not treat them as an afterthought while 98% of their efforts go to selling more NASCAR tickets, which have become less and less valuable in recent years. There was a time in the recent past when the return on $1 of NASCAR marketing far, far outweighed the return on $1 of INDYCAR marketing, but as NASCAR attendance continues to tumble in many markets, tracks must work to make other events more valuable. By sharing the load, INDYCAR and the individual tracks should be able to make INDYCAR races valuable again.

Can the INDYCAR self-promotion model work? Probably for a few events here and there, given a very special set of circumstances. Can that model work in the long run and replace the traditional sanctioning-fee model? I really don’t think it can. From my view, that only serves to set up a bitter divide between INDYCAR and the tracks instead of developing a team effort to move in a manner beneficial to both sides.