Monday, September 28, 2009

IndyCar Valuation Adjustment 2.1

The valuation of a top single car IndyCar team for 2010 changes in correlation with TV numbers for each race in 2009. The good news is that the television ratings for Sonoma, Chicagoland and Motegi exceeded my expectations. Therefore, the value of IndyCar teams has increased because the actual numbers were better than my assumptions.

The bad news is that the total promotional value that a championship caliber team can offer to sponsors over the course of a 17-race IndyCar season is still less than $1 million. That news becomes particularly bad when you consider that teams need at least $4 million to put a car on the track at every event.

Our adjusted valuation for a championship caliber, single car IndyCar team is $947,863.

Why make such a small adjustment?
Because I think that IRL management and IndyCar teams should be made to recognize that the numbers matter. They are not mere inconveniences. They are jeopardizing the very existence of IndyCar racing.
Marketing in the 21st Century is a quantitative exercise. There is very little guesswork. Metrics and measures have improved exponentially in the digital age. You simply can't fool people anymore. You must have data to back up your claims.
Please recall that moving to network television and higher reach cable would not make a significant difference. I plan to update my analysis of this scenario in the not too distant future. Much more important is creating a series that might be embraced by a greater proportion of U.S. motorsports consumers.

The product is the problem. It is unpopular and it costs too much.

For further explanation, please see the following articles.

My initial valuation of a championship caliber IndyCar team here.

The recently updated valuation, taking new information into account, is here.

My criticism of Terry Angstadt's little plan to "raise the value" of the IndyCar Series is here.


No comments:

Post a Comment