Racing’s Untapped Sponsorship Opportunities

It’s no secret that racing in America is low on sponsors.  Red Bull is leaving NASCAR as is Crown Royal.  Many more sponsors are reducing the amount they spend and how many races they’ll pay for.  In Indycar the situation is even more dire with very few teams having real, full sponsorship.  A majority of the Indycar teams relay on ride buying and sponsor deals tied to drivers, not teams, to fund themselves.  It’s also no secret that NASCAR and Indycar are both struggling with a lack of younger fans.  Not just children, but people in the 18-35 demographic.  I can’t help but wonder if these two facts are inter-related.  There are so many major products and companies not involved in racing.  If some were to get involved it would both increase racing’s exposure and fund some teams and tracks.  From Wal-Mart to Aeropostle, Nintendo to McDonalds, Apple to Rockstar Energy Drink, Activision to Nike, there are sponsorship oppurtunities out there if only they could be found and convinced!

Expanding sponsorship into new directions has two main affects (besides the obvious financial benefit for everyone).  Firstly it would provide a massive boost to exposure.  No Indycar driver outside of Danica get’s consistent mainstream, or non racing, exposure. Even in NASCAR there’s not much exposure compared to stick and ball.   The major stick and ball athelete’s (such as LeBron, Bryant, Jeter, Manning, Farve, ect.) are everywhere.  You can’t go out of your house or watch TV without seeing them.  That is what racing is up against.  If you take a closer look at who’s pushing these guys you’ll notice that they have major sponsors that cross promote with them.  You’ll also notice a disturbing fact…most of these sponsors have limited to no involvement in racing.

Racing Needs Nike, badly

The second effect only matters with certain sponsors, but it has just as much impact.  As I’ve said before racing struggles with too many vanilla drivers who lack personality.  A major reason for this is sponsors don’t want to upset people.  But if you look at Hollywood, the music world, and stick and ball sports there are a ton of sponsors who don’t mind a controversial athlete.  I mean, Nike sponsors Micheal Vick who got convicted of dogfighting!  Compared to that Tomas Sheckter looks like a choir boy.  In general though those sponsors aren’t involved in racing.  Change that and the lack of personality issue should disappear.  Racing just needs edgier sponsors which I wrote about earlier this year.

Red Bull activates it's X-Games sponsorship; you can find their gear in almost any mall. Not so for NASCAR.

Of course there are reasons why this hasn’t happened.  With regards to activation the issue appears to me to be that many sponsors see putting their logo on the car as the activation.   That’s all that many companies seem to think needs to be done.  And to be fair sponsorship are expensive.  But if a company just sponsors a car in the end it won’t do them much good without greater activation.  The perfect example of this is Red Bull’s NASCAR team.  In theory NASCAR and Red Bull should be the perfect paring especially with drivers like Brian Vickers and Kasey Kahne.  But Red Bull has done almost no activation.  They don’t do track signage.  They don’t do major TV, radio, or print adds.  Red Bull advertises like crazy yet their NASCAR team is nowhere to be seen.  Red Bull is actively involved with Pastrana… so where’s the love for Vickers?  A large part of the reason for why Red Bull plans on leaving NASCAR is due to lack of return on investment.  Both NASCAR and Red Bull share responsibility to that.  NASCAR hasn’t helped Red Bull promote itself in NASCAR (being too tied into other “official sponsorship’s”) and Red Bull hasn’t given Vickers, Speed  or NASCAR in general the same love they’ve given Pastrana and the X-Games.

The other challenge is that NASCAR doesn’t have the right demographic’s for many companies, and Indycar has .2 TV ratings.  The lack of fans in the 18-35  demographic is NASCAR biggest challenge.  Ratings are good and sponsors are still leaving.  Those two facts are inter-connected (again, look at Red Bull).  Indycar is better off in the 18-35 demographic but the 0.2 ratings are a deal breaker.  While a full discussion on how to make racing more appealing to younger fans would take a couple articles the main point is that racing needs to market itself as an extreme sport.  Look at the success of Ken Block, Travis Pastrana and the X-Games.  Do that and the rest should start to fall into place.

Lost because they got a mutli-million dollar deal for the Brickyard 400

It doesn’t help that many companies have started to do a combination of title sponsorship of races and smaller, associate sponsorship that are less visible.  Coke only put themselves on a car once or twice a year but have a program called the “Coke family of drivers” that allows them to have multiple drivers for one low price.  NASCAR also sells a lot of “official product of NASCAR” sponsorship often taking from teams that need them more.  It’s completely within NASCAR’s power to stop doing that.  More importantly they need to try and convince sponsors to sponsor cars and not just do smaller, multi-team programs by offering incentives to sponsors who do full time sponsorship.  An example of an incentive would be extra signage at tracks (especially ISC, who’s owned by NASCAR) and inclusion in adds that NASCAR produces to promote the series.  These types of “perks” would improve the cost/benefit ratio on sponsors.

There are more sponsors who racing should target then can be fit into one article; that said, I’d like to focus on one, Nike.  Nike sponsors a huge number of athletes in a very visible way.  Seriously, look it up and they’re involved with a everyone from Derek Jeter to Tim Tebow to Lebron James to Micheal Jordan.  Yet again there’s almost no presence in racing.  Micheal Jordan owns Jordan Suzuki in AMA Pro Racing that sometimes has Nike stuff on it and Jordan’s Nike brand also has a small deal with Denny Hamlin but it’s almost invisible.  Nike sponsorship would bring a lot of money and exposure to racing.  Possibly more important is that it would bring some legitimacy to the idea that racing is a sport to stick and ball fans.  Outside of music sponsorship, Nike only does sports.  Considering racing always has to answer the question “is it a sport” that would be helpful to say the least.

Sponsorship activation done right

There aren’t enough sponsors in racing but there should be.  Yes the economy is bad but the sponsorship situation in racing is much, much worse than in other major sports.   The reasons are many.  The point is that major sponsors are out there.  It’s up to the racing series to attract and keep them.  NASCAR attracted a ton of sponsors and through incredibly short sighted thinking frittered them away.  Throw in some demographic issues and a 20% drop in ratings from the height and you’ve got a perfect storm of problems.  Indycar’s problem is relatively simple.  Very few sponsors want to dump 5+ million on something with .2 ratings.  It’s tough and I don’t have all the answers but if new sponsorship’s were added racing would no longer have a money issue.  If the right sponsors were added it could also fix the personality problem.  Finally it would add a major source of exposure for both series to people who don’t know about them.  In short, it would give racing in America exactly what it needs.