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field Helio Castroneves and Ryan Briscoe’s cars since Philip Morris tobacco money exited at the end of 2010 (livery was withdrawn at the end of 2009).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.
Jul 5, 2015, 6:00 PM EDT
Block wins at MCAS New River, Round 4 of the Red Bull GRC season.
Jul 5, 2015, 4:00 PM EDT
Before NASCAR resumes on NBC from Daytona, see Red Bull GRC pick up its season from its first race after Daytona, at MCAS New River.
Jul 5, 2015, 3:06 PM EDT
Will Buxton brings you all of the post-race interviews and analysis at Silverstone.
Jul 5, 2015, 2:00 PM EDT
Roberto Merhi and Will Stevens finish 12th and 13th at Manor’s home race.
Jul 5, 2015, 1:30 PM EDT
Brazilian driver forced to settle for fourth place at Silverstone on Sunday.
Jul 5, 2015, 1:00 PM EDT
Issue on the Renault power unit forces Ricciardo out of the race at Silverstone.
Jul 5, 2015, 12:00 PM EDT
Could today have marked Valtteri Bottas’ first victory in Formula 1?
Jul 5, 2015, 11:10 AM EDT
A late rain shower allows Vettel to claim Ferrari’s first podium finish since the Monaco Grand Prix on Sunday.
Jul 5, 2015, 10:30 AM EDT
After a poor start, Rosberg fights his way to second place at Silverstone, but slips further behind Hamilton in the drivers’ championship.
Jul 5, 2015, 10:05 AM EDT
Hamilton won his home grand prix for the third time on Sunday after seeing off a spirited challenge from Mercedes teammate Nico Rosberg and both Williams drivers.
Jul 5, 2015, 9:36 AM EDT
Hamilton beats the weather and the field to record his third victory at Silverstone.
Jul 5, 2015, 8:30 AM EDT
Rossi charges to fourth place in spite of a time penalty.
Jul 5, 2015, 7:15 AM EDT
Can Lewis Hamilton win for a third time on home soil? Or will Nico Rosberg spoil his homecoming?
Jul 5, 2015, 6:31 AM EDT
Everything you need to know ahead of today’s race at Silverstone.
Jul 4, 2015, 6:00 PM EDT
Watch latest INDYCAR Chronicles with Josef Newgarden.
Jul 4, 2015, 4:00 PM EDT
The coinage of a new term took place at Silverstone on Thursday thanks for Force India’s owner.
Jul 4, 2015, 3:00 PM EDT
Both Ferraris will start behind Williams for the first time in 2015 on Sunday.
Jul 4, 2015, 2:00 PM EDT
The Red Bull driver will start tomorrow’s British Grand Prix from tenth place on the grid.
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