Street & Smith's Motorsports Marketing Forum Gets Underway

The Street & Smith’s Conference Group’s 8th Annual Motorsports Marketing Forum began today at The InterContinental in N.Y. with a panel titled "The State of Motorsports: Charting the Course of an Industry in Flux," featuring IRL Commercial Division President Terry Angstadt, NHRA Senior VP/Sales & Marketing Gary Darcy, Champ Car World Series Exec VP/Strategic Development & Communications David Higdon, Chip Ganassi Racing Teams President Steve Lauletta, NASCAR Managing Dir of Brand & Consumer Marketing Jim Obermeyer, DEI President of Global Operations Max Siegel and ISC Senior VP/Marketing & Business Operations Roger VanDerSnick

The Issue: What is the impact and direction of motorsports' increasing internationalization?

DEI's Siegel Discusses Globalization Of Motorsports

The Skinny: Higdon: “The internationalization of motorsports is inevitable. … At the same time we have to be careful to keep our base (in the U.S.). It’s more about identifying how to use international drivers.”
Lauletta: “(Globalizing) allows us to do a couple of different things. We’re able to deliver to our existing sponsors and with new sponsors extend what they can do with our program. … If they have the desire to use the property and use the driver outside the U.S., we can help their ROI in that area a bit.”
Darcy: “The sponsors embraced our (internationalization) right from the beginning because they recognized the benefits of globalization and the increasing profiles of stars of the sport.”
Siegel, on the risk of globalizing: “You have to maintain your core fanbase. … When you look at new revenue streams and diversifying the market, you risk alienating the fanbase.”
Obermeyer: “The casual fan would like to see the sport more mainstream and do things that legitimize the sport across all demographic regions. The other fans feel like this is the club they signed up for a long time ago… that they would like to preserve. It’s something you have to weigh. … There’s a struggle with how big we’ve become and how global we’ve become.”
Greatest Hit: “The challenge continues to be getting everybody moving in the same direction for the good of all” -- Lauletta.

The Issue: How often are sponsors doing more than just writing a check and what can be done to help encourage them to do more?
The Skinny: Angstadt: “For us, the best example is Firestone. When you see 41 pages in Sports Illustrated on a season, congratulating the drivers and pointing out the victories, and extended into a licensed product and branded tire, being in retail … we’d like to have 10 more sponsors like that.”
VanDerSnick: “This is about getting a great wonderful relationship with your sponsors and bringing with it a series of marketing solutions -- understanding what they need, how you can help and what you can do to help them deliver on their goals. Sometimes you have to arm them so they can do battle, if you will, at the home office.”
Lauletta: “The challenge is finding the tough dialogue to push their partner to articulate why they’re doing what they’re doing. Then the onus falls on you to help them answer the question and say, ok, spending this money this way makes sense.”

The Issue: Changes in ownership.
The Skinny: Lauletta: “I’m on a wait-and-see attitude when it comes to ownership who have expertise in different sports. I don’t think you have an NFL or NBA forum, but you have a motorsports forum. This is different. It’s different when you don’t have the built-in fanbase of someone wanting to follow a team from a different market.”
Siegel: “You only have 43 world class athletes that compete on a yearly basis, as opposed to that many on several teams.”

 

 

The Issue: How do you cultivate the drivers into brands?

Panel Discusses Importance Of Cultivating Brand Of Drivers Like Montoya

The Skinny: Siegel: “What DEI has done over the years is a great case study. We have a team built on a cultural icon. More teams need to start to build the organization on a culture of excellence like that.”
Lauletta: “We all know that the driver is what appeals to the fan. Chip Ganassi has a great racing history but you’ll find a lot more Juan Pablo Montoya fans than Chip Ganassi Racing fans. There are a heck of a lot more Dallas Cowboys fans than Tony Romo fans. You absolutely have to develop the driver brand and make them individuals, but also link them back to the team [in case] the driver departs.”
Greatest Hit: “It’s not manufacturing a personality. It’s about magnifying a person’s appeal” -- Higdon.

The Issue: What do you do about declining ratings?
The Skinny: Siegel: “Fans want something 24-7. They want to consume it on TV, download it on their phone, view it on the Internet. The metric has to change … because today’s consumer gets access to the product in many different ways.”
Obermeyer: “We need to build more rivalries in the sport. … There’s also been a lot of negative chatter from drivers, etc. from a rating standpoint.”
Darcy: “By NASCAR picking up on ESPN we saw the impact of that in terms of growing our ratings. The countdown, sort of the playoff system, increased interest for us (at NHRA).”
VanDerSnick: “From a track standpoint, ratings get talked about a lot because it’s been growth, growth, growth for so many years. For NASCAR, it’s the first time it's down. It’s still solidly the number two sport on television week-in-week-out. … There’s great viewership and interest in the sport.”
Obermeyer: “We’ve done our own research (on shifting time schedules). The core fans would love to have a race start sometime after church and end right before supper. The casual fans want something later. … It’s a balancing act. The move we’re working on now is to try to get somewhere between the 1 and 4 o’clock with a consistent start time across the season.”
Greatest Hit: “It’s far from the ceiling falling in on us” -- VanDerSnick.

Ratings, Sponsors Among Topics At Motorsports Marketing Forum

The second day of the Street & Smith’s Conference Group’s 8th Annual Motorsports Marketing Forum opened with a panel titled "NASCAR Branding Strategies: Corporate Marketers Speak Out." Panelists included Chevron Motorsports & Licensing Manager Ann Barker, AAA Dir of Membership & Brand Marketing Darlene Entringer, Sprint Nextel Dir of Nextel Cup Series Marketing Dean Kessel, UPS Motorsports Marketing Manager Laura Kouns and Coca-Cola Co. Dir of Motorsports Marketing Ben Reiling.

The Issue: How do you cut through the clutter?
The Skinny: Barker: "We really feel we have a leadership position. [The Chevron brand is] an icon on the track, that car with the big red Texaco star on the hood, so really taking kind of an ownership position of that and always reminding people that we have that heritage."
Reiling: "It's about having a relationship at the league level. It's also about having relationships with the drivers and tracks."
Kessel: "I look at it kind of hub and spoke. We're able to work with the drivers, tracks, teams and other sponsors so we're not just siloed into one position. So we can work across a number of platforms."
Kouns: "We look for unique signage opportunities or something that ties back to our brand."
Greatest Hit:  "You'd love to put your logo on the New York Giants helmet if you could do it" -- Kessel.

The Issue: What favorite metrics are you using to gauge success?
The Skinny: Kouns:  "Customer volume and revenue growth."
Barker: "The loyalty and the willingness to -- I hate to say it right now -- pay more for gasoline. But really it's the selling into our distributors and getting products into stores."
Kessel: "New customer acquisition and retention."
Reiling: "With all our assets -- Olympics, NCAA, PGA Tour, MLB and NFL teams -- NASCAR is the number one item on MyCoke Rewards that people are engaging with on a consistent basis. The number one state is not North or South Carolina or Florida or Alabama -- it's Michigan. Indiana is number three, I think. People talk about the sport being a southeastern and Atlantic coast line but I think that's a way for us to tell people it goes beyond that."
Greatest Hit: "Our banners are torn down before the start of each (NHRA) race, that means you're touching consumers" -- Reiling.

Here are some highlights from yesterday's afternoon sessions.

(l to r) Turner Sports' Jeff Behnke, ESPN's Jill Frederickson And Speed Network's Hunter Nickell

The Panel: The Media Landscape -- Deals and Innovations That Are Broadening and Strengthening the Fan Base.
The Panelists: NASCAR Images President & CEO Jay Abraham, Turner Sports Senior VP & Exec Producer Jeff Behnke, ESPN Motorsports Coordinating Producer Jill Frederickson, Speed Network President Hunter Nickell.
The Issue: How did the Chase for the Cup affect ratings this year, and can the format be improved?
The Skinny: Frederickson: “The great thing about this format is we can still cover the Chase within the race itself, so you can follow your favorite driver even if he’s not really at the top in points. The chase is still young as a playoff format, and that’s one place we can just grow and grow.”
Abraham: “Sometimes you’ve got a seven-game series, and sometimes it’s a four-game sweep. It doesn’t mean you change the format of the playoffs. We’ve got the same issues as other sports, so the idea of changing the format is kind of comical.”
The Issue: What changes are you looking into to reach more consumers?
The Skinny: Abraham: “We’re all working on content for the web. They’re very aggressively looking for new ways to distribute content.”
Behnke: “The two things viewers have always complained about are that there are too many commercials and that they don’t know who all 43 drivers are. If we can do a better job of making sure people know the drivers, that might create more interest in the sport.”
Nickell: We need to find a way for the competitors to be competitive and also be who they are. People like to see the passion.”
Greatest Hit: “We’re not good enough at saying, ‘These guys are going 200 frigging miles per hour.' It’s amazing. We’ve got to lift up the skills and extraordinary stuff these guys do because it’s crazy” -- Nickell.

The Panel: Exploring Opportunities in Motorsports: Reaching New Markets and Demographics.

(l to r) Schumacher, Geisler And Edmondson Discuss Reaching New Markets And Demos

The Panelists: American Motorsports Association President & CEO Rob Dingman, Grand American Road Racing Association President Roger Edmondson, World of Outlaws Exec VP Ben Geisler, Don Schumacher Racing Team Owner Don Schumacher.
The Issue: Who is in the motorsports audience today?
The Skinny: Edmondson: “The sports car audience is similar to what you see in golf TV. The average income for the Grand-Am audience is $102,000 per year, which makes for disposable income. We’re talking about a relatively upscale audience when people are riding $12,000 Harleys.”
Dingman: “There’s a tremendous amount of potential today in this audience. Not only has motorsports become more mainstream, but motorcycles have too. We have an audience that’s not just moto-centric now.”
The Issue: What challenges do you face in putting your sport on TV?
The Skinny: Schumacher: “The sport doesn’t always translate that well to TV. With NHRA being tape-delayed, we have challenges different than NASCAR. I think a live show would tremendously enhance the experience, but we have to solve the problems that create delays in the sport.”
Geisler: “We have success with tape-to-live shows. In fact, two of our best rated races were on four-week tape delays.”
Edmondson: “We’ve had to balance our live broadcasts with tape-delay because it’s not good for us to run opposite NASCAR, but our numbers this year were remarkably good.”
The Issue: How do you help and appeal to advertisers and sponsors?
The Skinny: Edmondson: “Our focus is not necessarily on finding sponsors for Grand-Am. What we do is work with our owners to find sponsors for their cars, and it’s paid off.”
Geisler: “We’ve got a list of NASCAR drivers and team owners as long as my arm who are interested in buying our teams. We reach markets other people can’t ... and you can buy into our sport for far less.”
Schumacher: “You have to get sponsors activated and get them involved. To sell our sports as an alternative to NASCAR doesn’t get you anywhere.”
Edmondson: “You can’t buy your way into the Super Bowl or pay to play in the World Series, but with our sport, if you put together the money, you can buy a team and have a professional driver, and actually compete.”
The Issue: What is the future of your sport?
The Skinny: Dingman: “Motorcyclists tend to be very web savvy. They don’t want to see their races two weeks down the road. I think the future is in webcasting.”
Edmondson: "We honestly believe the next big thing in this country will be road racing, even though the people in Daytona don’t want to hear it.”
Greatest Hit: “In the Rolex 24, our drivers came from all the various disciplines, but we might not have had any drag racers because we require them to go left and right” -- Edmondson.

The Panel: Sponsorship Deals With Sanctioning Body, Team/Driver and Track

(l to r) NASCAR's Jim O'Connell,  ISC's Daryl Wolfe And SMI's Marcus Smith

The Panelists: Nationwide Advertising & Brand Officer John Aman, Aflac Second VP & Dir of Branding, Advertising and Marketing Services Al Johnson, NASCAR VP/Corporate Marketing Jim O'Connell, Hendrick Motorsports Dir of Marketing Pat Perkins, SMI Exec VP/National Sales & Marketing Marcus Smith and ISC VP & CMO Daryl Wolfe.
The Issue: Why did Nationwide move from track deals to a national sponsorship of the former Busch Series?
The Skinny: Aman: "We contemplated deals with teams and other tracks and then this deal came along and we decided that the best opportunity to spend a year-long conversation with NASCAR fans was going to be with NASCAR itself. It becomes a difficult process for us to decide which performers are going to perform well at a certain time but we attract the whole fanbase if we find a way to work with the sanctioning body."
O'Connell: "The second day we met with John and his team they presented us with about five pages of what their plans were with the series, and that showed us they had thought a lot about what they wanted to do to make it a success."
The Issue: Should there be more working together to sell the sport?
The Skinny: Wolfe: "I think there's at times too much competition between the different stake holders and rights holders in this sport because if a partner really wants to make an investment to drive its business there is a great opportunity to have a position with you guys (on the panel) and they don't have to spend $30M to do it. I think there should be more cooperation."
O'Connell: "I think we'd all agree the best partnerships are the ones that are fully integrated."
Johnson: "You get so and so calling from this track and that track about deals. We've got to make sure there's that base of what the track can do for us and then the track can add components."
Greatest Hit: "You get bombarded just getting into this sport. When we first started advertising in NASCAR my phone rang off the hook from every driver and team" -- Johnson.
The Issue: Advice for brands looking to get into NASCAR.
The Skinny: Johnson: "Do your homework. What you want to accomplish might not be satisfied by a relationship with NASCAR but these guys might help you."
Smith: "Coming to (marketing) events is a great start. The other thing is have someone you know that's involved with the sport and ask them about it."
Perkins: "We look back at a lot of the relationships in the sport and the companies we've talked to and the advice that's always the same is: We may not be the right option for you but the main thing is that you align with quality and you're in the sport for a long time. We need and want the dollars but you want quality companies."

The Panel: The Next Wave in the Business of Motorsports: New Investment and Ownership Models.

The Panelists: NHRA President Tom Compton, McLaren Capital Advisors Founder, President & CEO Matthew Doherty and Fenway Sports Group Exec VP/New Business Development Jay Monahan.
The Issue: What are the challenges in integrating corporate ownership?
The Skinny: Compton: "Close to ten of our agreements that go a minimum of 25 years and many of them go in perpetuity. So when you're 56 (years old), how to make sure the two companies don't become competitors. We met with so many groups in the past and everyone had money to bring to the table but not everyone had the complimentary skill set, the expertise, the relationships and the patience to sit down and take this 56 year old association and tear it apart and rejoin it again."
Monahan: "There are significant challenges. We're based in Boston and their team is based in Concord, North Carolina. We've got two different cultures and two different ways of going business and trying to identify those as we went through the due diligence and build a model to assimilate and go to market was a challenge. That's why it took three years to complete."
Doherty: "From a banking perspective one of the most difficult issues is corporate governance. Who is going to do what to whom once the deal closes."
The Issue: What sort of regulation goes into partnerships?
The Skinny: Compton: "No matter who becomes the majority shareholder down the road, our agreements go with that buyer and protect both NHRA pro racing and the association in perpetuity."
Monahan: "We had 12-14 (Red Sox) owners that we had to step back and explain what NASCAR was and that process resulted in a number of informative meetings with our partners, but ultimately that was a source of regulation because you have 20 people who have been highly successful in the business world who have their own perspective on how and why a deal should be done."
The Issue: What is the future of the NHRA?
The Skinny: Compton: "We've been very successful with limited resources and that's why I think the capital, the increased operating spend, the increased advertising. We haven't increased advertising in five years but we've seen growth in (attendance and ratings)."
Doherty: "As you see more and more of these multiplatform sports entrepreneurs like John Henry, Tom Hicks, George Gillett coming into motorsports, it wouldn't surprise me if NHRA wasn't the next platform that they moved into."
The Issue: How do multi-platform sports owners create synergy across entities?
The Skinny: Doherty: "To the extent that a marketing department can walk into any consumer brand and give a better offer and not just sell a quarter panel or a seat post on the car, but we're offering a more comprehensive solution to your marketing problem. ... That's where value is being built in the future."
Monahan: "The efficiencies are that we're both introducing clients to each other's world and our shared world and we expect that through time those will be mined and converted into corporate sponsorship revenue for the teams going forward

 

George Gillett Discusses The Business Of NASCAR At MMF

Canadiens Owner and Gillett Evernham Motorsports co-Owner George Gillett sat down for a One-On-One

Gillett Interview Headlines Second Day Of Motorsports Marketing Forum In N.Y.

at Street & Smith’s Conference Group’s 8th Annual Motorsports Marketing Forum yesterday, where he discussed several topics, including getting into NASCAR and the revenue gap between NASCAR teams.

Q: When did you start looking and what business metrics attracted you to NASCAR?
Gillett: I started looking about four years go. Actually, I started looking in the mid '70s. I met with Bill France, Sr. At that point, he and I had a handshake on a transaction that would see my family buy Daytona and Talledega from the Frances. I’ve been aggressively interested in the sport since then. That didn’t work out, and frankly, I’m glad it didn’t. The Frances, papa and son, have done a brilliant job with the sport. They did, probably, better than we would have done. I’m not sure sports fits the same economic metrics. You approach it differently and look at different things.

Q: Talk about some of the things you’ve done since you bought the team.
Gillett: The Budweiser transaction… that was our relationship. I’ve known Tony (Ponturo) and the Busch family a long time. They ski at our resort out in Wyoming. I’d asked him about it when the rumors began and told him that if it was true we’d love to have a chance to talk to him. I was at the [NHL] draft in Columbus, Ohio. The phone rang Thursday night. He’d told me they were going to settle it and not change [their relationship with Dale Earnhardt Jr]. That Thursday at the draft, though, the phone rang and I heard this voice, “OK. You are right." I said, "Right about what?" I didn’t know who it was. "We are going to change and I’d like to talk to you." I was in St. Louis within 48 hours.

Q: Why is Budweiser a good partner for you all and vice versa?
Gillett: Budweiser is clearly going through a shift in their strategy. This came up at a time when we had a driver who was unique, in that he appeals not only to males but also females in an amazing way. We also had an organization that was positioned to do B2B… They saw we were fully capable of fixing that.

Q: What are some examples of B2B you have?

Gillett Says He Was Surprised By Amount Of Investment Involved In NASCAR

Gillett: We have a sponsor, Stanley Tools. They’re in the business of making tools for race teams and mechanics. But they’re also in the business of securities. … In addition to being in the sport business we have real estate developments with all our different sports franchises. We have two to five million square feet of real estate. We were able to bring Stanley in. They are wonderful. They had an organization that was receptive to the B2B concept. …It takes that receptivity on both sides. They’re on their way to Denver now to work with our senior management there and we’re looking to revise the security at a number of care dealerships. We have a similar relationships with Valvoline. They are now putting together a deal with our dealerships. They will make enough money on their relationships with our car dealerships to cover their NASCAR sponsorship. …We’re very into that.

Q: What has surprised you about the business of NASCAR?
Gillett: The amount of investment it takes to be competitive -- both in people and facilities. You have to have today between 300,000-500,000 square feet. You have to have between 5,000 employees and 30 and 60 engineers. If you all think what happened with the New England Patriots taping the New York Jets, come to NASCAR and pay attention to who has video cameras behind various pit crews. Then wait for Monday and the various calls from different people. The number of people who get hired from one team to another without any references. Absolutely amazing. I’ve never seen such a low level of sophistication in such a sophisticated business.

Q: What are the differences between Premier League, NHL, NASCAR and others you’re involved with and how they govern?
Gillett: Fortunately, since I’ve been involved in NASCAR I have not been involved with a rules infraction. Before we got there, there were several. Is Mike here? Is Brian here? I think the appeals process in other sports has greater balance. I don’t know if it’s because they have more experience or what’s the difference. In the last 207 NASCAR infractions where there have been appeals, I think 207 have been against the teams and 207 have been in favor of NASCAR. You won’t find that in other sports. There’s more balance. Maybe it’s NASCAR people are more egregious and maybe their violations are more severe, I don’t know. Because in a league, you’re a participant and one of the bosses, there’s a greater since of collegiality.

Q: Can you be more patient as an NHL owner or NASCAR owner as an investor?
Gillett: We don’t think of either as a business investment. …We honestly think we hold these in trusts for the fans. I don’t think you’d see us sit down as a family and talk money, money, money. We talk performance. We’re in sports because we love to take a team that’s not winning and turn them around and try to build dynasties.

Q: When you were 28 years old you made a call to Pete Rozelle. What happened?
Gillett: I was living in Chicago. I was a consultant for McKenzie and was in Boston. I decided I wanted to leave McKenzie and find a place in sports. Back then football was king. I picked up the phone and called Pete Rozelle. My name, last name, is Gillett and I don’t have an "e" on the end. I spoke to his secretary and said, "This is George Gillett. May I speak to Pete Rozelle?" It was only because he thought I was with Gillette Blue Blades company that he took my call. I asked him if there were any teams for sale. He said, "No. I don’t have any teams, but I have a minority interest in the Miami Dolphins that’s available." With my next door neighbor, I went down and bought the team. I was just there one year.”

Q: Is there a major revenue gap in NASCAR teams?
Gillett: There’s a huge gap.

Q: Does it need to be addressed?
Gillett: No. I think it’s wonderful.

Q: Why is it addressed in other sports?
Gillett: I don’t think it ever needs to be addressed. I’m not troubled by that. In England, there’s no revenue sharing. There’s no salary cap. If you’re a Russian billionaire like Abramovich and want to spend crazy money, you can do it. There’s a totally different model in the NHL and in the NFL.

Q: If you were a commissioner for one day in the NHL, what would you change?
Gillett: I wouldn’t have the offices in New York.

Q: Where would you have them?

Gillett Believes Other Sports Have Lot To Learn From NASCAR

Gillett: Colorado.

Q: Besides that?
Gillett: All sports have a lot to learn from NASCAR. The wonderful backgrounds of our drivers to the accessibility model. The typical marketability problems you have in pro sports is not a problem NASCAR has because our drivers are well trained and naturally open. They are truly nice people and they’re great for the sport and great for the fans. Accessibility to the athlete is something all sports can learn, not just specific to the NHL. With respect to the NHL, I think the one thing that can be worked on is the consistency of refereeing. What frustrates me, as a fan, is there is no consistency between games and periods on what is hooking and what is interference. I don’t think you have that problem with the NFL, and I think fans are frustrated by that.

Q: What is the biggest threat to the business of sports?
Gillett: Two jump out at me. …Sports in general is dealing with a disposable dollar. As we go into a tightening economy, that makes things tough for all sports. ?In general, the behavior of athletes is another risk. You can disenfranchise or alienate fans very quickly if an athlete misbehaves. I think hockey gets it. I think NASCAR definitely gets it. I think soccer gets its. I don’t know about basketball or football.