Sep 25, 2013, 4:00 PM EDT
The last several weeks have seen sponsor stories take over from on-track ones as the dominant players in the North American racing news.
NAPA, of course, has made the biggest announcement with its decision to leave Michael Waltrip Racing at the end of the year, in the wake of the controversy at the NASCAR Sprint Cup Series regular season finale at Richmond. 5-Hour Energy, additionally, seems displeased with the action the organization has taken in a statement it has released.
Other sponsors are on the move, which is normal in racing, but noteworthy in their timing after Richmond. Valvoline leaves Roush Fenway Racing for Hendrick Motorsports; Jimmy John’s goes with driver Kevin Harvick from Richard Childress Racing to Stewart-Haas Racing.
Castrol made the jaw-dropping decision earlier this year to leave John Force Racing at the end of 2014 in NHRA after 29 years.
And then there is the report this morning that GoDaddy is re-evaluating its role as a primary sponsor in IndyCar with Michael Andretti’s team, citing low television ratings as the impetus for a potential move out of full-time primary sponsorship there.
It all adds up to a fascinating question: Which part of racing do sponsors prefer most? Is it on-track performance, ethics, or ratings?
To borrow a term from NASCAR President Mike Helton, the “ripple effect” of the last few weeks has changed the corporate game in a way we haven’t seen for quite a while. Sponsors often come-and-go from racing but it’s become increasingly apparent the Richmond saga has made a bigger impact on all forms of motorsport than we might have realized in the immediate aftermath.
If it’s on-track performance you crave, ideally, IndyCar would be the best bang for the buck. It costs substantially less – think in the $4 to 8 million range – for a season-long sponsorship (by comparison to $15 to $20 million in NASCAR). A sponsor can advertise itself at the Indianapolis 500, the largest single-day sporting event in North America, and have the chance to win a variety of different circuits.
That said, the marketing and promotional aspect of the variety apparently does not justify the ROI as it stands now. Roger Penske, for instance, has had to put together a consortium of sponsors to field Helio Castroneves and Ryan Briscoe’s cars since Philip Morris tobacco money exited at the end of 2010 (livery was withdrawn at the end of 2009). Elsewhere around the grid, teams have become increasingly reliant on drivers bringing sponsorship to secure a seat. There’s still plenty of talent on the grid, but the days of fully-funded rides without bringing a dollar are drawing to an end.
NASCAR, meanwhile, can offer better TV ratings on the whole, with the performance aspect secondary. It’s why Danica Patrick, for instance – long seen by this writer and others as a good-but-not-great driving talent who has made most of her career via marketing – can afford to run 25th to 30th place every week, but maintain the GoDaddy support for the awareness and buzz she creates off-track.
Now, though, NASCAR faces an ethics crisis the likes of which it has rarely seen. If NAPA’s departure is the tip of the iceberg in terms of corporate America withdrawing its dollars, it could create another “ripple effect” – to borrow Helton’s words again – where more sponsors depart and hundreds of families see jobs go away. That might be an extreme way of looking at it, but it is certainly possible if sponsors don’t see the value in the tens of millions of dollars invested and the PR too damaging to their brands.
A good take from the Sporting News’ Bob Pockrass, linked here, suggests NASCAR needs to implement a “grand plan” to soothe sponsors and their concerns. Pockrass notes there are elements where NASCAR is already involved in direct communication with sponsors – notably via Chief Marketing Officer Steve Phelps – but that needs to expand in the wake of the Richmond controversy.
As a fan, you want to see sponsors – regardless of series – do the job of activating and creating a connection that spurs you to root for said sponsor and buy more of their product. As a sponsor, you ideally want to be successful in all three aspects of performance, awareness and moral standards.
Depending on the fallout the rest of 2013 as it relates to sponsor movement, we’ll see which of the three takes precedence in the motorsports landscape.
May 29, 2015, 12:35 AM EDT
Larry Dixon is making up for lost time – in VERY fast way, that is – as in the neighborhood of 320-plus mph and less than four seconds.
May 28, 2015, 11:05 PM EDT
Sarah Cornett-Ching is opening a lot of eyes in the ARCA Series this season.
May 28, 2015, 8:59 PM EDT
Here’s the field for this year’s Red Bull GRC season opener in Ft. Lauderdale.
May 28, 2015, 8:31 PM EDT
Taylor Swift on an IndyCar? Believe it.
May 28, 2015, 6:49 PM EDT
With the completion of the Kansas Nationals this past Sunday, the NHRA Mello Yello Drag Racing Series has reached the one-third point of the 2015 season.
May 28, 2015, 4:30 PM EDT
Ex-F1 driver ponders whether Hamilton’s trust in Mercedes may have taken a hit after his Monaco defeat.
May 28, 2015, 3:23 PM EDT
FIA looking for more teams to join the sport in the next two seasons.
May 28, 2015, 3:00 PM EDT
After Williams recorded its first non-score since Brazil 2013 in Monaco, Bottas is sure that the team will respond in Montreal next weekend.
May 28, 2015, 1:30 PM EDT
25 years on from Mark Blundell’s pole position at Le Mans, Nissan pays homage with a retro livery on its third car for the race.
May 28, 2015, 11:30 AM EDT
Alan Permane claims the data on Grosjean’s car shows he did not brake-test Verstappen and cause their crash in Monaco last Sunday.
May 28, 2015, 10:30 AM EDT
FIA president responds to calls for a stricter policy on alcohol sponsorship in F1.
May 28, 2015, 9:45 AM EDT
Andreas Bakkerud will fill in for Piquet while he’s on Formula E duty in Russia.
May 28, 2015, 9:00 AM EDT
Mercedes team boss Toto Wolff took part in a Twitter Q&A earlier this week.
May 28, 2015, 8:30 AM EDT
Two-time series champion looks ahead to a big year in Red Bull GRC with Volkswagen Andretti Rallycross.
May 28, 2015, 8:00 AM EDT
Gossage and Walker are in contact about how to best move forward with super speedway aero kits ahead of June 6 IndyCar race.
May 28, 2015, 7:30 AM EDT
No. 63 driver tops $61,000 raised for Susan G. Komen this month.
May 27, 2015, 4:57 PM EDT
The last seven races held in Detroit have been won by a different driver.
May 27, 2015, 4:17 PM EDT
Penalties doled out after the Indy 500, most notably to the No. 19 and 98 teams for pit incidents.
May 27, 2015, 2:08 PM EDT
Gonzalez returns to No. 18 car after running it in the Grand Prix of Alabama.
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