IBJ lacks Drill-Down on IndyCar and IMS

The Indianapolis Business Journal ran a story dated August 8 featuring new Indianapolis Motor Speedway CEO Jeff Belskus. The Republic has for some time considered the IBJ to be the best newspaper in Indianapolis, and the citizens always appreciate reporter Anthony Schoettle's contributions to the local motorsports literature.

That said, we must take issue with this article. It's fine as far as it goes. However, as the Wall Street analysts like to say, it needs more drill-down. Schoettle provides surface-grazing quotes from former IMS Senior Director of Marketing and Consumer Products Dave Moroknek, driver-turned-pundit-turned-racing dad Derek Daly, motorsports marketer and former Dreyer & Reinbold Racing partner Eric De Bord, and the increasingly ubiquitous Mike Hull, Team Managing Director of Target Chip Ganassi Racing.

Each in turn identifies a problem that needs to be solved, and Schoettle provides some proximate causes. "To Do" lists for the IMS and IRL - they could have been written by someone other than Schoettle - appear in the left margin. These are vacuous. We'll examine the IRL version here.

IBJ Speed Needs (IRL)

1. Increase sponsorships, including finding a title sponsor.
2. Add engine and chassis makers to the series.
3. Expand series in the right national and global markets.
4. Contain costs for the teams.
5. Improve languishing television ratings of races as well as attendance.
6. Improve exposure for teams, and help them gain more sponsors.
7. Evaluate long-term viability of IRL under the Hulman-George family umbrella of companies or another owner.

That should solve the problem - a mere seven gargantuan tasks. And nowhere is it supposed that the product might in fact be central to the problem. Notice how each "problem" solves itself if we suppose that the IRL develops its product into something that a critical mass of customers actually wants.

1. With lots of fans, finding a title sponsor and increasing sponsorship overall are matters of course.
2. Packed stands and good TV ratings would likely attract new manufacturers of chassis and engines.
3. See above. Replace "manufacturers of chassis and engines" with "race promoters".
4. Pricing the product to its market value is a product development issue. (We shall investigate this in much more detail this week.)
5. Ratings and attendance are how you measure demand for your product. Say it with us. The Product is the Problem!
6. The claim that IRL teams need "exposure" is as old as it is erroneous. No amount of exposure is going to turn these cars driven by these drivers on these tracks into a pop culture hit. This product is hardly a product at all. It's an amalgamation of what the team owners 1) can afford and 2) are willing to provide. IRL teams are not going to attract sponsors that are remotely concerned about Return on Investment because the product is overpriced at every level of the value chain. Any new sponsor must originate with personal relationships, supply chain leveraging, phenomenal salesmanship, or some combination of these.
7. This point concerns corporate structure and governance. Both topics are worthy of attention, but they shall have to wait.

The Republic is very excited about tomorrow's keynote entry here at The Indy Idea. We shall look at what the cost of running a top IndyCar team should be, given the market value of the overall product. Danton is geeked. Marat has his quill at the ready. We hope that you will join us and provide commentary of your own.

Roggespierre