It’s A Different Sponsorship Era Today

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Those that come here solely because they like what I consider to be usually positive posts on here, will probably not like this one. I don’t consider what I’m about to say as being negative. Instead, I consider it a realistic commentary of today’s economic environment.

Back in the eighties and nineties, it was not unusual to see cars with blank sidepods show up at races. What was unusual was for an unsponsored car to be one of the perennial front-runners. In fact, it just didn’t happen. That was back in the day when big tobacco brought buckets of cash for sponsorship. At any given race in the mid-nineties, multiple cars carried primary sponsorship from Marlboro, Kool, Players and Hollywood. Although Penske cars carried the primary Marlboro sponsorship, many other drivers and/or cars received lesser financial support. Stephan Johansson, Bobby Rahal, Raul Boesel were all seen with the Marlboro Chevron on the back of their driving suit.

Sponsorships were relatively stable, whether it was related to tobacco or not. Penske (Marlboro), Newman/Haas (Texaco/K-Mart), Ganassi (Target), Rahal (Miller Brewing), Galles (Valvoline), Hall-VDS (Pennzoil) and Foyt (Copenhagen) all had very stable sponsorship situations for years. Dick Simon’s cars may have had more of a variety of sponsors over the years, but they were usually full-funded. Usually, only the cars of Dale Coyne, Antonio Ferrari, Vince Granatelli or the remnants of Leader Card (remember when they tried to run the Buick at Road America?) were about the only teams that might show up with blank sidepods.

Fast-forward a quarter century or so and things are quite different. Tobacco money was legislated out of the sport while many of the beer and automotive sponsors have seemed to shy away. Roger Penske has utilized his business contacts to replace the departed Marlboro sponsorships with major companies like Verizon, PPG, AAA and Hitachi. Michael Andretti has partially fortified his team with sponsorship from Snapple/Dr. Pepper, hhgregg and DHL for Marco Andretti and Ryan Hunter-Reay. Last year’s Indianapolis 500 winner, Alexander Rossi, has partial sponsorship from NAPA, but I’m not sure what else has been confirmed for him. Likewise for newcomer, Takuma Sato –but I’m sure Honda is helping to fund that seat.

The most surprising sponsorship situation centers around the No.9 car of Scott Dixon for Chip Ganassi Racing. This isn’t some unproven commodity. This is a four-time series champion that has won the Indianapolis 500 that is entering his sixteenth year with Ganassi. Yet, there he was this past weekend at the Test in the West at Phoenix in a solid white fire suit and matching stark white race car with no sponsor logos. There was just something wrong with that picture.

From what Marshall Pruett said last week on Racer.com, it sounds like there will be a primary sponsor on Dixon’s car for the majority of the races, but some other revolving sponsors and liveries throughout the other remaining races. Who they are remains to be seen, but no one at Ganassi seems overly concerned.

Still, it begs the question – if a four-time champion and former Indianapolis 500 winner who is still at the top of his game has trouble landing sponsorship, what does it say for the health of the sport? When Target announced last summer that they were leaving after a twenty-six year run, I really thought that Ganassi would have been making an announcement about the replacement sponsor the week after the season had ended.

But weeks went by and then months – and still, no announcement. We are now less than a month away from the drop of the green flag in St. Petersburg and we still have little information on the sponsorship situation on the No.9 car. I know everyone needs to dot the “i’s” and cross the “t’s”, but some information normally leaks out. No one in racing is very good at keeping secrets. But so far, we’ve heard nothing other than they are making progress and they are not concerned. Hmmm…

It’s unfair to compare this racing age with the early nineties. It’s a totally different ballgame when it comes to sponsorship. NASCAR is in a free-fall when it comes to viewers and attendance. Sponsors and potential sponsors take note of that. They also have plenty of examples of failed sponsorships to point to, where sponsors feel they are not getting much bang for the buck (see Danica Patrick’s sponsorship woes). The fact that IndyCar can actually point to rising TV ratings probably doesn’t help since they were so low to begin with.

The days of worldwide brands knocking each other down to sponsor a car are long gone. Many cars are now being sponsored by niche companies that many have never heard of, and they are very happy to get them.

Some will say that Dixon’s reserved personality is the reason. They say he’s too boring. That’s ridiculous! If anyone has heard Dixon interviewed for more than thirty-seconds, they know he has a very keen and dry sense of humor. He may not be outrageous, but in my opinion – Dixon represents everything a company should look for in a spokes person. I think it’s more of a function of today’s world of sports. Auto racing has suffered the same malaise that football, baseball, basketball and all the major sports have gone through recently. There is more competition for the entertainment dollar (and time) than ever before. Sports have suffered the consequences across the board. Sponsors and advertisers know that and they are being more selective than ever on where to spend their marketing dollars.

I’m not a bit worried that Scott Dixon will not have a fully-funded ride for 2017. But the fact that we are in mid-February and have not even heard a hint of whose name might be on his sidepods next month is a little perplexing. It doesn’t necessarily speak to the health of IndyCar; but it is more of an indictment of sports sponsorships as a whole.

Hopefully, there will not be any blank sidepods in St. Petersburg next month.

George Phillips

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12 Responses to “It’s A Different Sponsorship Era Today”

  1. Chip is not worried in the least, at least he is acting that way with his statements. I believe we will know when Chip wants us too. My only concern is a tweet by Dixon’s wife on this matter. All in all, it should come on a Tuesday, that is IndyCar news day right.

  2. From the 80s to today, business has increasingly demanded return on marketing investment. Every expense is scrutinized much more these days, and supporting a team because the CMO or CEO’s son likes racing, personally, no longer cuts it. I think the lack of ROI on these sponsorships is the main issue. It’s just business.

  3. When even the big teams struggle with sponsorship, I’ve often wondered how much funding Foyt really gets from ABC Supply Co. If that’s truly a full funded relationship in the traditional sense, it’s damn impressive for Foyt.

  4. billytheskink Says:

    My theory on Dixon’s white car at Phoenix is that he’s actually being sponsored by Ross Brawn, but the fluorescent yellow paint delivery arrived at Ganassi’s shop late.

    Really though, the sponsorship challenges that Dixon and others are having are definitely not positive news, but it is worth noting (as you do George) that these challenges are being faced by others both in and outside of racing. Someone will need to figure it out in the near future or entertainers are going to start making A LOT less money. They’ll never stand for that…

    Almost relevant trivia:
    The last two Indianapolis 500 winners with blank sidepods?
    Juan Pablo Montoya in 2015 and Helio Castroneves in 2001, a pair of Penskes. Of course both cars were sponsored; Montoya’s car having its sponsor on the cowling and Castroneves’ being removed from the sidepod after practice because of tobacco advertising laws.

  5. Scott Dixon is the most underrated and unappreciated athlete in American sports.

  6. I don’t think that this is any reflection on Scott Dixon.

    I think there are less companies out there that will support auto racing. There are more of them looking for the new “hip” thing or cause to support. Wrong as that may be.

    Indycar can help itself by making costs to the participants lower, and also sweeting the winnings. Its not helpless in this situation.

    • Bruce Waine Says:

      “It’s not helpless in this situation”

      As in Indycar is partly to be credited for lack of team sponsorship as has been observed from lack of …. Regular advance publicity that supports Indycar events ? ……. Lack of regular national advertising that supports the Indycar racing series ? ……….. Lack of regular promotion of the current Indycar Champion or INDY 500 winner?

      If one has a product which travels the United States, why squander your financial efforts on just one home event – the Indy 500? ?

      Or based upon what we have observed, there is no other race product other than the INDY 500?

      Companies understand this lack of support and simply do not want to spend their resources on a product that the race series powers-to-be evidently do not equitably advertise/ support….

      Without financial reforms and without no race venue expansion outside the lower 48 & beyond Canada, there are no incentives in place that attract more participants (race teams) who have vested financial interests (product sponsorship funds ) outside USA…………

      2018 a new chassis for all teams………….

      2018 additional teams buying into the series due to Indycar series financial reforms for 2018…………. Or continued ‘series’ stagnation?

      The choice is in their court……… If they are listening and become pro-active.

      Check back in a year…………….Time will tell…………

  7. Chip make look cool and confident about the IndyCar sponsorship situation, but he is sweating bullets. Whoever he has in the hopper is looking at the price becoming cheaper. Do they not see the value? If so, why not sign on the dotted line and go racing? Maybe they just want Indy.

  8. What’s changed since the 90’s is the advertising research industries ability to measure the ROI that Bill mentions. Truth is racing sponsorship has probably always had a mediocre return on investment, but now agencies and sponsors have better research tools and methodologies to measure its precise impact relative to other advertising platforms. The return on a $7m racing sponsorship is often better spent on a budget for tv ads. Where racing sponsorships are sometimes still percieved at providing better ROI are for creating engagement, hospitality and loyalty reward opportunites.

  9. Sending Scott Dixon out on track, dressed up completely in white, at the recent test at PIR has been a nice way to generate attention for the new sponsors that are coming to the #9 car.

  10. I remember last summer when Ganassi was talking about a sponsorship deal happening in 30 to 60 days and that it very well could be one of the companies associated with the Target deal, like Energizer. Regardless of that, Chip is as hard a worker as any in racing and he will get this sponsorship situation fixed. It is not just Dixon he’s selling, it is the whole team. The opportunity to be on a car like that as well as the association , to me, seems like a home run for the right company or companies.

  11. LurkingKiwi Says:

    I do wonder if the switch to Honda has made selling full-season sponsorship for Scott’s car harder, given the massively on-sided results last year; OTOH Indy sponsorship may be easier!

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