Brickman
07-08-04, 11:27 AM
Penske the peacemaker
Business motives drive racing owner to center of reunification controversy
By Anthony Schoettle aschoettle@ibj.com
Arguably the most powerful team owner in open-wheel racing, Roger Penske is in the odd role of peacemaker between the warring Indy Racing League and Champ Car.
After all, it was Penske who led team owners to form Champ Car forerunner CART in a dispute with the open-wheel sanctioning body U.S. Auto Club in 1978. That division led to a feud between CART principals and Indianapolis Motor Speedway President Tony George, which led to the IRL’s formation in 1994. Penske abandoned his beloved CART for the IRL in 2002.
History’s rounded the track, though, and Penske thinks open-wheel racing needs a czar. And the decision is grounded in business. “We have sponsors telling us all the time, ‘We’re not about controversies and confusion,’” Penske Racing Presi- dent Tim Cindric said. “They say, ‘When the clouds part, call us.’ We’re knocking on a lot of the same doors as the leagues, so I’d be surprised if they haven’t heard the same message.”
Current open-wheel sponsors are getting restless.
“We’ve never wavered in being involved in both series,” said Al Speyer, executive director of Bridgestone/Firestone Motorsports. “We do believe if there was one series we and a lot of other sponsors would benefit from greater exposure. There’s just too much focus on the division and reunification, and not enough on the excellent on-track racing.”
Penske has emerged as flux between the hardened positions of Champ Car and IRL, thanks to a New York Times column he wrote in May. NASCAR’s got the France family, he noted, and Formula One has Bernie Ecclestone. Open-wheel racing needs Tony George.
A single hand can guide the series toward the necessary ingredients of major sponsors, which begets cash to operate as well as the attention of fans and media, sources said.
“Everyone in Champ Car and the IRL thinks their brand is golden,” said Randy Schwoerer, president of a local sports and entertainment marketing firm that has represented numerous open-wheel properties. “Their brand isn’t golden.
“The simple way of building a brand is by aligning with partners with a bigger brand than your own, who can take your brand to a higher level by marketing to new audiences,” Schwoerer added. “Somebody has to get realistic, and say, ‘We can’t build this alone.’ If they could, they would have by now.”
A common sentiment among many open-wheel insiders is that Champ Car will fail later this year or early next. The company’s three principals—Gerald Forsythe, Kevin Kalkhoven and Paul Gentilozzi—will either run out of money or the will to prop up the series and fold it, the notion goes.
Conservative projections have the trio shelling out more than $30 million to keep Champ Car turning laps this season.
Many of those same sources point out the IRL has a better TV deal, stronger suppliers, more sponsors, more teams and more cars than Champ Car. Once Champ Car folds, the prevailing thought goes, George can scoop up its rival’s best roadracing venues to strengthen his series.
But if Penske’s decisions are businessdriven, said Dennis McAlpine, a financial analyst in New York who has covered Champ Car and CART since its formation, the IRL must also have some serious problems.
John Barnes, co-owner of the IRL’s Panther Racing team, fueled that notion when he told the Kansas City Star in June, “I think the [IRL] series is on the verge of collapse from [the affordability] standpoint.”
And if IRL officials think Champ Car is merely going to roll over and die, they may have another thing coming. Champ Car President Dick Eidswick said his series has a business plan that could keep it running despite losing money for up to three years.
“You have to wonder what [Champ Car’s] motives are,” Schwoerer said. “At some point, you’d think they’d get tired of writing checks and want to focus on racing.”
IRL and Champ Car officials did not return phone calls seeking comment.
While the IRL has the marketing muscle of Honda and Toyota behind it and a rights-fee TV deal with ABC and ESPN, the series is in its second straight season of TV ratings decline. Most races earn a Nielsen Media Research rating about one-fifth of NASCAR races. Even ratings for the Indianapolis 500 were down 11 percent to 4.1 this year.
“If you have this marketing muscle, and you know these two Japanese engine makers alone are spending millions and millions, and it’s not doing any good in terms of fan attendance and TV ratings, what’s that tell you?” analyst McAlpine said. “I think it’s simple, but do those that matter want to hear?”
If the two series resolve their Hatfield/McCoy feud, Schwoerer said, more cars could chase a single title through a variety of circuits, just like old times.
“But would it put more fans in the seats and increase TV ratings?” he asked. “That’s all that matters. Anyone who thinks a unified series is going to bring sponsors out of the woodwork doesn’t understand sports marketing.”
Egos and politics aside, motorsports sources agree open-wheel teams and series sponsors can’t afford to let the gap between them and other forms of racing grow any wider.
“It’s funny how things have come full circle,” said Zak Brown, head of local motorsports marketing firm Just Marketing. “[It’s] 10 years later, and about the only substantial thing that’s been accomplished is a racing series has been destroyed. Open-wheel racing had this big fight, the sport got stuck in neutral, and 75 million people became NASCAR fans. It makes you wonder what’s next.”
www.ibj.com
:thumbup: Spot on.
Business motives drive racing owner to center of reunification controversy
By Anthony Schoettle aschoettle@ibj.com
Arguably the most powerful team owner in open-wheel racing, Roger Penske is in the odd role of peacemaker between the warring Indy Racing League and Champ Car.
After all, it was Penske who led team owners to form Champ Car forerunner CART in a dispute with the open-wheel sanctioning body U.S. Auto Club in 1978. That division led to a feud between CART principals and Indianapolis Motor Speedway President Tony George, which led to the IRL’s formation in 1994. Penske abandoned his beloved CART for the IRL in 2002.
History’s rounded the track, though, and Penske thinks open-wheel racing needs a czar. And the decision is grounded in business. “We have sponsors telling us all the time, ‘We’re not about controversies and confusion,’” Penske Racing Presi- dent Tim Cindric said. “They say, ‘When the clouds part, call us.’ We’re knocking on a lot of the same doors as the leagues, so I’d be surprised if they haven’t heard the same message.”
Current open-wheel sponsors are getting restless.
“We’ve never wavered in being involved in both series,” said Al Speyer, executive director of Bridgestone/Firestone Motorsports. “We do believe if there was one series we and a lot of other sponsors would benefit from greater exposure. There’s just too much focus on the division and reunification, and not enough on the excellent on-track racing.”
Penske has emerged as flux between the hardened positions of Champ Car and IRL, thanks to a New York Times column he wrote in May. NASCAR’s got the France family, he noted, and Formula One has Bernie Ecclestone. Open-wheel racing needs Tony George.
A single hand can guide the series toward the necessary ingredients of major sponsors, which begets cash to operate as well as the attention of fans and media, sources said.
“Everyone in Champ Car and the IRL thinks their brand is golden,” said Randy Schwoerer, president of a local sports and entertainment marketing firm that has represented numerous open-wheel properties. “Their brand isn’t golden.
“The simple way of building a brand is by aligning with partners with a bigger brand than your own, who can take your brand to a higher level by marketing to new audiences,” Schwoerer added. “Somebody has to get realistic, and say, ‘We can’t build this alone.’ If they could, they would have by now.”
A common sentiment among many open-wheel insiders is that Champ Car will fail later this year or early next. The company’s three principals—Gerald Forsythe, Kevin Kalkhoven and Paul Gentilozzi—will either run out of money or the will to prop up the series and fold it, the notion goes.
Conservative projections have the trio shelling out more than $30 million to keep Champ Car turning laps this season.
Many of those same sources point out the IRL has a better TV deal, stronger suppliers, more sponsors, more teams and more cars than Champ Car. Once Champ Car folds, the prevailing thought goes, George can scoop up its rival’s best roadracing venues to strengthen his series.
But if Penske’s decisions are businessdriven, said Dennis McAlpine, a financial analyst in New York who has covered Champ Car and CART since its formation, the IRL must also have some serious problems.
John Barnes, co-owner of the IRL’s Panther Racing team, fueled that notion when he told the Kansas City Star in June, “I think the [IRL] series is on the verge of collapse from [the affordability] standpoint.”
And if IRL officials think Champ Car is merely going to roll over and die, they may have another thing coming. Champ Car President Dick Eidswick said his series has a business plan that could keep it running despite losing money for up to three years.
“You have to wonder what [Champ Car’s] motives are,” Schwoerer said. “At some point, you’d think they’d get tired of writing checks and want to focus on racing.”
IRL and Champ Car officials did not return phone calls seeking comment.
While the IRL has the marketing muscle of Honda and Toyota behind it and a rights-fee TV deal with ABC and ESPN, the series is in its second straight season of TV ratings decline. Most races earn a Nielsen Media Research rating about one-fifth of NASCAR races. Even ratings for the Indianapolis 500 were down 11 percent to 4.1 this year.
“If you have this marketing muscle, and you know these two Japanese engine makers alone are spending millions and millions, and it’s not doing any good in terms of fan attendance and TV ratings, what’s that tell you?” analyst McAlpine said. “I think it’s simple, but do those that matter want to hear?”
If the two series resolve their Hatfield/McCoy feud, Schwoerer said, more cars could chase a single title through a variety of circuits, just like old times.
“But would it put more fans in the seats and increase TV ratings?” he asked. “That’s all that matters. Anyone who thinks a unified series is going to bring sponsors out of the woodwork doesn’t understand sports marketing.”
Egos and politics aside, motorsports sources agree open-wheel teams and series sponsors can’t afford to let the gap between them and other forms of racing grow any wider.
“It’s funny how things have come full circle,” said Zak Brown, head of local motorsports marketing firm Just Marketing. “[It’s] 10 years later, and about the only substantial thing that’s been accomplished is a racing series has been destroyed. Open-wheel racing had this big fight, the sport got stuck in neutral, and 75 million people became NASCAR fans. It makes you wonder what’s next.”
www.ibj.com
:thumbup: Spot on.