Keeping Danica Patrick in the IndyCar Series is "very important." So Angstadt told Versus.com's Bruce Martin.
Angstadt's further musings on this subject require translation and analysis. We are pleased to provide these services to interested citizens. Those who are new to the subject should know that Danica is represented by International Management Group (IMG).
"We have worked hard and closely with IMG to give them confidence in ourIt is unlikely that NASCAR (sans-culottes!) was required to provide such assurances. It has demonstrated that abundant demand exists for its Cup Series and Grand National Series products. Conversely, nearly all empirical evidence suggests that the market for the present IndyCar product is already small and still shrinking. Pity Terry Angstadt, who must convince a sophisticated marketing and financial firm that down is in fact up.
series and her role in the future of the series." - Terry
Angstadt
"I really respect the magnitude of this decision for her... That is why weWith all due respect, we have no idea what this means. Perhaps we can infer that failing to manage one's product tends to reduce one to pandering.
are respecting that as best we can with IMG." - Terry Angstadt
These comments are fascinating. Danton suggests that Angstadt's list of generic activities is intended to imply that IndyCar knows how to maximize returns to Danica and IMG. That is, after all, why IMG is involved."It is sales, marketing, PR, venue selection, where she feels most
competitive... IMG challenges us and we respond accordingly." - Terry
Angstadt
The reference to "venue selection" lends specificity and intrigue. For example, the IMG Speakers Series markets Danica's public speaking engagements. This effort is unlikely to yield favorable results in Japan and Brazil. In addition, we doubt that IMG has much enthusiasm for Edmonton. Who could blame IMG for suspecting that Danica's participation at these venues would cause her to forfeit significant revenue opportunities?
Is Danica in over her Head?
It is clear that the IRL hopes that Danica will stay because she has a greater probability of winning races in the IndyCar Series. Danica seemed to be leaning that way less than two weeks ago. Now, suddenly, she is silent and the issue remains unresolved.
If Danica intended all along to use NASCAR to get a better deal in IndyCar, then she must realize by now that she hired the wrong firm to represent her. This is not the starstruck IMG that Mark McCormack founded. Today's permutation is an aggressive profit maximizer that exists for the purpose of distributing abnormal returns to Ted Forstmann and his investors. In this case, that would mean taking Danica to NASCAR.
Roggespierre
Danica is a "product", that is defined by "winning the Indy 500". She is the face of the IRL, and even if she would get more money, for a short time, in NASCAR---she would ruin the product---agree???
ReplyDeleteosca
Hello osca,
ReplyDeleteI'm not so sure that the Danica brand isn't more valuable than the Indy 500 brand, at least in the economic sense. Curses! I hate admitting that, but I think it's safe to say that the majority of people who've heard of Danica have probably never seen her drive a race car.
I recently attended a party on Long Island. Somebody asked me about Danica, and everyone at the table knew about her. Most thought that she was a NASCAR driver. The reality is that "car racing," as my New York friends call it, and "NASCAR" are synonyms in the popular lexicon.
One thing that the IRL might have going for it is the limited schedule. IMG has expanded horizontally. It has the Speakers Bureau, a modeling agency, an Intellectual Property division, and designs on producing Hollywood films. Racing less often might actually enable Danica to earn more.
I don't pretend to know where this is headed.
Roggespierre
The facts:
ReplyDelete1. Tony Stewart wanted to own a NASCAR team, so he bought 50% of Haas Racing.
2. Tony Stewart has said that he wants to be a part of the Indy 500/IRL in the future.
3. Andretti Green Racing just had one of its name owners "transfered" to Andretti Green Promotions. Reports say that Kim Green was financially bought out by Michael Andretti.
4. Michael Andretti promised that the "newly revamped" racing team will be renamed.
5. Danica Patrick surprisingly shows up for a second time at Stewart Haas Racing headquarters this week.
6. Danica said before Sonoma that she decided to stay with Michael Andretti's team because she liked the direction the team was headed due to the changes Michael promised.
The result:
Michael Andretti will renew Danica Patrick's contract and, beginning in 2010, the four car IRL team will be known as Andretti Stewart Racing. Some combination of Office Depot, Old Spice and/or US Army sponsorship will appear on ASR cars. The deal also offers the possibility of ASR drivers appearing in NASCAR Sprint Cup (aka Danica stroking "The Brand") when the IRL isn't racing. Finally, "The Hallelujah Chorus" will be heard wafting from IMG's headquarters this Christmas season.
The formula:
Michael Andretti - Kim Green + Tony Stewart = Happy Danica Patrick in the IRL and occasionally NASCAR as early as 2010.
Anonymous,
ReplyDeleteFascinating, and entirely plausible. I had heard that Boost Mobile and Motorola would be sticking around in some capacity, but that was back when Danica was still talking.
It's also interesting that P&G/Gillette has established relationships with Andretti - Marco's shirtless commercial is apparently very big in the Czech Republic - and Stewart Haas through Ryan Newman. And, of course, Old Spice is a P&G product, as well.
George Pyne might just get an invite to Forstmann's next party in the Hamptons.
Thanks for the intriguing comments.
Roggespierre
Just to clarify, Roggespierre, Boost Mobile wouldn't go anywhere in my sponsorship scenario. Here's how it would look.
ReplyDelete1. Danica Patrick -- Boost Mobile
2. Tony Kanaan -- 7-11
3. Marco Andretti -- Old Spice/Army combo (Army car debuts at Indy since it's on Memorial Day weekend)
4. Driver TBA (since Mutoh/Formula Dream are probably gone) -- Office Depot
I have also heard the "Andretti-Stewart" connection, in regards to the sudden "interest" in the Indy 500 start time being pushed back (where it always should have been) at 11:00 Indy time.
ReplyDeleteHere is another possible scenario...
-Stewart becomes a part "owner" in Andretti's IRL/Indy Lights team. Gary Peterson stays on board as well.
-DP signs a deal, where she will be full-time in Indy Car in 2010, while "dabbling" in NASCAR Nationwide on off-weeks. She could do a few late-season Cup races for Stewart/Haas Racing. Her deal becomes full-time Nationwide and Cup in 2011, with the Indy 500 as her lone Indy Car race (hell, by that point, it might be the lone Indy Car race anyway...)
-Andretti gets exactly what he wants. He wants $$$$ for his cash-strapped team and his son, who has been relying on the money DP and Mutoh have brought to the table, for the 2010 season. He gets to keep Kanaan and Marco, in 2 fully funded cars, while DP and her "brand" remains for another year.
-Stewart knows time is running out for him, to ever win the Indy 500 (which is still his #1 goal in racing). With this deal, and with the Indy start time moved, he gets to do the Indy 500 again, with a experienced, top dollar team.
-There will be no full-season 4th car. The 4th car, will be for Stewart, at Indy. They do keep JR Hildebrand under contract/control, and farm him out (ala Alex Lloyd with Ganassi) to another team (Vision, perhaps???) so he can run the full IRL season in 2010. Hildebrand then takes DP's spot on the Andretti team, in 2011.
-Indy Lights is still run by Peterson, with Stewart having a "say" on one of the drivers (likely from a USAC/American oval background) and sponsorship is provided from TS for one of the cars.
Miss Patrick is a marketing tool. The only leverage she has is the ability to draw people to follow her exploits. Those who follow are simply "sheep". Sheep follow the sheep herder. If she goes to NASCAR then the flock will follow. It is not about anything other than product sales. There are more sheep in NASCAR than Indycar and that means more potential customers. Winning races seems to be secondary and it appears, that it is about the value of Patrick to draw attention that sponsors care about. Indy needs to find its value from its rich history of innovation and small town heroes who make it big. There would be no AJ Foyt if he and his father didn't have a starting point. Indy needs to get back to that.
ReplyDeleteOldwrench,
ReplyDeleteThank you for your comments. I do think you're on to something. It is clear that most people who know about Danica Patrick have never seen her race. Similarly, more people have seen Helio Castroneves dance than have seen him drive.
IndyCar has tried to promote its drivers away from the traditional motorsports marketplace. I think we can now say that this strategy has failed. It needs to earn fans at the race tracks. Besides, Mario was terrible on Carson.
The closest thing to A.J. Foyt today is Tony Stewart, and everyone seems to agree that his participation at Indy would boost interest in the event. Tim Cindric and Michael Andretti know it, and so does everyone else. So, why not put together a series that might draw future Tony Stewarts? Answer: because, for various reasons, some of the more powerful teams owners have no interest in participating in that type of series, and IRL management is clearly scared to death of those team owners.
Thanks for writing.
Roggespierre
While I totally support your theory, I do have one thought...What happens if Penske and Gannassi do have to face competition? If Honda walks along with others, does that not bring the cost of Indycar down? If so, then I would think that the value structure of Indy just became the 1.3 million you have stated. That makes the buy in considerably less and inflow of new teams that much more viable. The free market system would indure and open competition both on the track and in the supply chain would run rampant. One might consider this a golden oppertunity in this economy.
ReplyDeleteOldwrench,
ReplyDeleteYou and I are thinking along parallel lines. This IS a golden opportunity to reduce costs. Businesses worldwide are doing it in preparation for growth when the macroeconomics turn around. Meanwhile, the IRL is talking about "technology" for its next specs.
Penske doesn't have nearly as much to lose as Ganassi if the IRL were to price the product to market value. The Phillip Morris USA sponsorship is indivisible. The same is not true for Ganassi's arbitraged supply chain arrangements with Target.
At $1.3 million per season, some of Ganassi's associate sponsors might want to become primary sponsors at other teams. Remember, Chip's Target deal doesn't allow him to take another primary sponsor if it doesn't pay him more per car than Target does. That's why we don't see third entries from TCGR.
Maybe companies like Energizer, Gillette, Lifelock and TomTom decide to become primary sponsors for other teams while continuing to participate in Target's leveraged supply chain at reduced prices.
That would be very bad for Target Chip Ganassi Racing, and very good for the IndyCar Series. IRL management would therefore do well to politely nod when TCGR offers a suggestion, and then proceed to do what's best for IndyCar. TCGR's interests are completely misaligned with those of everyone else. The technology argument is bunk; keeping the cost of participation exponentially greater than the product's market value enables Ganassi to collect abnormal returns.
The funny thing is that there are so many fools in the garage area who nod in agreement when Hull promulgates the technology spin. Hull is a smart guy. I give him credit for keeping a straight face.
The sad thing is that IRL management seems to take Hull's comments at face value. We haven't heard Penske's guys whining about technology. Why? Because they're going to get paid just as much regardless of how much the equipment costs. The only threat to them is the federal government.
TCGR has the most to lose if IndyCar reinvents itself as a marketable product. Does anyone on West 16th recognize this?
Roggespierre