KV Racing Technology owners Jimmy Vasser and Kevin Kalkhoven clearly would like to add a second car in 2010 with Paul Tracy behind the wheel. The problem, of course, is money. Adding Tracy to its roster of drivers would be good for the IndyCar Series. The Canadian veteran is talented, experienced, and candid. Unlike several of the league's drivers, Tracy also happens to be interesting.
Will in absence of Value
GEICO, a subsidiary of Warren Buffet's Berkshire Hathaway, has become a fan of Tracy and the KV team. According to Robin Miller, the auto insurance marketer will provide some sponsorship again in 2010, but only for the races that are broadcast on network television.
The IRL is unlikely to embrace the idea of canceling its Versus contract and incurring a net loss of at least $7.2 million. That's what it would take to move eight races to a network broadcaster and four more to a high-reach cable channel. The increase in promotional inventory capacity to Tracy and KV Racing Technology would be roughly $743,000. Add that to the roughly $1.3 million in existing promotional inventory capacity, and Tracy could expect to have half of the budget required to field a shoestring effort.
Such is the economic reality of IndyCar racing.
Tracy has few options, none of them particularly promising. They include:
- Work with Vasser and Kalkhoven to attract small sponsors that might collectively make-up the $2.0 to $2.7 million gap. This requires tremendous effort and offers a low probability of success.
- Find an idiot who is willing to pay double market value for sponsorship. It's been done before. But marketing is now a spreadsheet-driven, quantitative quasi-science. Finding fools is increasingly difficult.
- Hope that Terry Angstadt can line up a Brazilian widget maker that happens to sell something that GEICO has to buy. Supply chain arbitrage saves the day!
- Pay for the ride out of his own pocket. This is not only expensive, but also degrading. Paul Tracy is an accomplished talent. He has won races and a championship. He is not some kid with either rich parents or a Sugar Daddy Socialist in his corner, and he should not be required to behave like one. Tracy also happens to be a professional racing driver. That implies that he gets paid to drive, and not the other way around.
The 2010 prospects for Tracy and KV Racing Technology are not good. Expect them to run Indy and a few additional races together, much like they did this season. Anything more would require either a minor miracle or compulsory consumption of Brazilian beef at the GEICO employee cafeteria.
Roggespierre
Its sad isn't it?
ReplyDeleteNot particularly a fan of Tracy's, but he does bring interest (both positively and negatively) to the sport.
He isn't nearly as good as some would like you to believe, but he is a hell of a lot more interesting then most of the current cast of nobody's.
And until the sport gets their prices to play back to sane levels (as you say, the budgets are at least twice as big as they should be, considering the popularity of the series), its no use worrying about it anyway. At least until it officially dies.
Mr. Dickle,
ReplyDeleteYour last paragraph is key. Death and resurrection might in fact be the most appealing proposition.
That is why I so hope that Angstadt fails in his attempt to sell Brazilian products and services in the United States. If he were to succeed, then this Zombie Racing Series might be sustained in perpetuity, or at least until the dollar crashes.
Incidentally, some wonder why Angstadt is not putting more effort into keeping Danica. Forget for a moment that Danica would have to be a moron to not at least give NASCAR a try.
Angstadt's public quotes make him sound as if he's scared to death of IMG. He should be. It can offer infinitely more to Apex Brasil than the IRL can offer in its wildest dreams.
Apex Brasil wants to market Brazilian models in the United States. IMG owns a fast-growing modeling agency that has industry connections that the IRL does not and will not.
IMG Chairman Ted Forstmann has bought and sold Gulfstream, International Paper, Dr. Pepper, and many more global giants. He might have the world's greatest Rolodex. Invitations to his parties in the Hamptons are treasured.
Angstadt must stay away from IMG or risk losing his client, his only hope to finance the Zombie Racing Series. Forstmann could do more for Apex Brasil with one phone call than Terry Angstadt could hope to achieve in a year.
Is it not crazy that scenarios such as these are in fact related to the financial well being of the series that runs the Indy 500? Why can't Angstadt fix his product? Would it really entail that much additional personal risk? Apparently, he thinks that it would.
This is a morass.
Best Regards,
Roggespierre
Personal risk is something one has to endure at the top position at any organization. Risk is managed. In order to return to a viable and profitable product, Mr Angstadt will have to face his own management skills capacity. Can he endure personal humiliation or replacement if he does not offer a change the product and change it now? One is lead to believe that thou he may be in charge, he is not the one calling the shots! Personally, I feel for his situation, but I believe he has to either step up to the plate and offer something different or continue down the same path knowing he is cooking his own goose!!
ReplyDeleteYour the beest
ReplyDelete