Racing sponsors now at a crossroads of performance, ratings and ethics

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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field Helio Castroneves and Ryan Briscoe’s cars since Philip Morris tobacco money exited at the end of 2010 (livery was withdrawn at the end of 2009).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.

Teammates James Hinchcliffe and Robert Wickens earn top-fives at Barber

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For the first time this season, Schmidt Peterson Motorsports teammates James Hinchcilffe and Robert Wickens earned top-five finishes in the same race at Barber Motorsports Park in Birmingham, Ala.

Hinchcliffe finished third in the Grand Prix of Alabama; Wickens was one spot behind in fourth.

Wickens had one previous podium at Phoenix with his second-place finish. Hinchcliffe’s best result was a fourth in the season-opener in St Petersburg, Fla., so this marked his first podium of the year.

Both drivers needed a little help from the rain.

As precipitation began to fall in the closing stages of the race, Hinchliffe asked his team on a couple of occasions if it was wet enough to pit for rain tires. He was told twice to stay out and was then called into to the pits at the optimal time.

“Solid weekend for us after coming here before – not a great test,” Hinchcliffe said. “Two cars in the top 10 qualifying; two cars, top five in the race. Pretty proud of these boys, everybody on the Arrow car.”

The rain helped Wickens’ race strategy come together.

“I was having to save a lot of fuel in that second stint,” Wickens said. “So once (Scott) Dixon starting getting close to me I was thinking ‘Oh God, I’m going to actually have to give this one up.’ And then the rain came, so the fuel mileage happened naturally. So, yeah, it saved us a bit.”

And while both were pleased with their top-five finishes, drivers are rarely satisfied unless they are standing on the top step of the podium.

Wickens’ top-five finish was hard-fought. After winning the pole at St Petersburg and starting sixth at Phoenix, he failed to advance to the Fast 6 in back-to-back races at Long Beach and Barber – qualifying 10th both times.

“I was a little gutted that we came out in a big bunch of traffic,” Wickens continued. “It made the race fun, but a little frustrating as well because of people off sequence and whatnot. We lost a lot of track position there. Both of us could have been fighting for higher steps on the podium, but we need to do a little better job in qualifying. “