The plan here was to be positive and constructive, beginning today. Unfortunately, the mouth of Terry Angstadt has discharged yet another fallacy, forcing me to lithely and temporarily change tack.
The IRL Commercial Division President met the media at Homestead-Miami with Versus President Jamie Davis alongside. Racer provides the details.
Angstadt again claimed that he has a title sponsor on the hook and that he is confident that he'll reel it in. This should be and would have been a positive development had Angstadt left it at that. But, as is his wont, TA kept talking.
First, he effectively explained that a title sponsor will cause Versus to be pleased to remain the cable television distributor for a racing series that demonstrates zero ability to attract an audience.
"We are very close to making that announcement, and that's not only important for our broadcast partners, because believe me, that comes with a big television buy, both on broadcast and cable.""
There it is. Who needs ratings when the league can arrange for direct advertising buys? It's not about serving consumers. It's about arbitraging corporate supply chains and financing your unwanted product with direct sales in other markets.
Unfortunately, Angstadt revealed still more harebrained thoughts about ways in which a series sponsor would allow him to raise the value of the IndyCar Series.
"But I think, more importantly, to allow us to promote outside of
motorsports is critical. That is where we will attract what we think is a
much broader base and raise the overall value of the series."
This is an incredibly stupid plan.
Helio Castroneves won Dancing with the Stars, one of the more popular programs on network television. He then won the 2009 Indianapolis 500, yet television ratings decreased.
Danica Patrick was featured in the Sports Illustrated Swimsuit Issue in both 2008 and 2009. She finished third at Indy this year, yet television ratings decreased.
If promoting racing "outside of motorsports" is a classic example of a fool's errand, then Terry Angstadt is exactly the right guy to do it. People who do not like racing will not watch racing.
Why doesn't Jamie Davis push Angstadt to fix his product? I already answered that question above. Versus will be satiated by cash money from APEX Brasil and the new title sponsor. Cash trumps ratings.
Don't expect Versus to demand an improved product that might actually draw a television audience. It has college football, the NHL and cage fighting for that. IndyCar is a glorified time buy, financed by arbitraged supply chains.
Meanwhile, the IRL will continue to chase event promoters that are subsidized by governments. "Festivals of Speed" will attract crowds that shall be deemed "phenomenal." Those new fans from "outside of motorsports" won't watch any races on TV, but Versus will be getting paid, so that's not a problem.
The racing and television ratings will continue to suck. The Indy 500 will continue its slow decline. Fortunately for the IRL and its teams, ESPN and ABC can still be blamed for the next two years.
Curses! These guys make it nearly impossible to be positive.
Roggespierre
With Talkin' Terry, this is an example of putting someone in a VERY high position of power in your sport, when said person has VERY little actual expertise or passion or background in said sport.
ReplyDeleteAngstadt should have been sent down the river LONG ago. Maybe a decent guy, but he is a joke.
The big "series sponsor" that Terry is hoping for is IZOD. Basically it will be a little bigger/different slice of the IZOD contract, that was likely already signed.
Actual sponsor interest in this sport is a all-time low levels. And with the Versus contract and .1 ratings, that isn't going to change.
Which it makes even more vital then ever, that the prices to play in Indy Cars be slashed DRASTICALLY, to their rightful levels, considering the interest/popularity levels of this minor league sport.
Well, I should blame Jamie Davis for not pushing the IRL managemant to improve their product,if only to justify the contract to the board of directors of Versus. Havubg said that, TD is right that the cost of competing in IndyCar must be reduced to a realistic level.
ReplyDeleteAnd as oldwrench has said, supply chain arbitrage financing has to end too. Decreasing the cost of competing will enable smaller teams to compete on a seasonal basis, and as a consequence, more interest in the series, and more TV viewers, and finally more value for the advertising dollar spent.
I know it's difficult to be positive in light of Terry Angstadt's comments, but we must not give up... as a poster in the IndyCar Fan forum has said: FITE THE GUD FITE
GreyMouser said:
ReplyDelete"Decreasing the cost of competing will enable smaller teams to compete on a seasonal basis, and as a consequence, more interest in the series, and more TV viewers, and finally more value for the advertising dollar spent."
The addition of more numerous "smaller teams" putting out the same product is meaningless in the scheme of things. Proof is the outcome of the long-awaited "mergification", which has apparently done nothing to improve the value of the game or its teams. It sure hasn't increased TV viewership.
There is only one asset remaining - the "500." The series is an overvalued money sink that drags down the value of that asset.
Mr. Dickle -
ReplyDeleteI think he's hoping for a corporate-level deal with Phillips Van Heusen. Otherwise, there would be no reason to do it.
He's trying to tap into co-op advertising and supply chain arbitraging opportunities with the likes of Macy's and JCPenney. PVH is doing a ton of that this fall.
I hope that Angstadt fails. The sooner the IRL is forced to fix its cost-to-value ratio, the better. A title sponsor will not only delay the inevitable, but also kill what's left of the Indy 500 in the process.
GreyMouser -
Amen, brother! Slashing costs is the only way to go.
Rocketman53 -
I have given your proposals much thought. I remain intrigued but not entirely sold.
Best Regards,
Roggespierre
It sounds to me like Rocketman's thinking mirrors mine: The IRL is at the moment unnecessary and without value. Push the Indy 500 and perhaps invest in a few other distinct events that have geographic or aesthetic value (Long Beach being one, obviously). If Homestead makes no sense, stop racing there. Consolidate.
ReplyDeleteVirtualBalboa,
ReplyDeleteOne could also make the case that all of U.S. auto racing needs to get hip to the notion of scarcity. There is simply too much for the market to support.
From a financial perspective, Long Beach probably ought to be the first race dropped. The sanction fee is only $500,000. That covers the operating costs for the sanctioning body.
Add the TEAM payments and the Lights race, and you're looking at about $1.3 million to $1.5 million out-of-pocket for the IMS Board.
Texas pays the biggest sanction fee and draws a pretty good audience. It would have to be #2 on the list after Indy.
That said, I think we can assume that the IRL has contractual obligations at each venue. It can't just not show up. The league would have to go bankrupt. At that point, the IMS Board loses its claim. All bidders would be welcome.
Would the IMS take that risk? I can't imagine that it would.
Best Regards,
Roggespierre
From a financial perspective, Long Beach probably ought to be the first race dropped. The sanction fee is only $500,000. That covers the operating costs for the sanctioning body.
ReplyDeleteAdd the TEAM payments and the Lights race, and you're looking at about $1.3 million to $1.5 million out-of-pocket for the IMS Board.
Good points. What about recovering money from ticket sales and advertising? Its really their marquee event right now ratings wise aside from Indy.
Let's be realistic too; most of these races make no financial sense. You've done a great job of illustrating that. Texas sticking around is a given. But then, what else? There ought to at least be a third big event. Maybe an early season race at Sebring to accompany the ALMS? MIS would be ideal given the speed, close proximity to Indy, etc., but Michigan is frankly a dying state economically. Its why I keep coming back to Long Beach.
Roggespierre wrote:
ReplyDeleteOne could also make the case that all of U.S. auto racing needs to get hip to the notion of scarcity. There is simply too much for the market to support.
If the motorsports marketplace is saturated, producing more won't solve the problem of too little demand.
Now, if there were three "major" events, including the 500, like Texas and...well, there's always Motegi!
And Roggespierre wrote:
"We can assume that the IRL has contractual obligations at each venue. It can't just not show up. The league would have to go bankrupt. At that point, the IMS Board loses its claim."
That's why they have lawyers. I don't know the legal relationship between IMS and ICS/IRL, but I've got to believe they're severed for the purposes of bankruptcy and legal liability.
So the IRL disappears...and? It doesn't preclude IMS from prescribing its equipment for the 500 for a year, providing a payday.
The teams are independent contractors - and if there is a profitable outlet for their equipment, they'll likely do okay for another year. If Penske, TCGR and AGR want to put on a few shows, I'm sure they can find a sanctioning body to cover them.
And it's clear that without the IMS subsidy that made the past two seasons possible, this series will not survive for long, or, at best, survive in an economic limbo. The series is ultimately meat.
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