Thursday, June 24, 2010

IndyCar's Bernard talks Sense


Take a look at the new Associated Press interview with IndyCar Supremo Randy Bernard from the Sports Illustrated website.


The good news is that the chief executive continues to say things that make a lot of sense. The bad news, of course, is that the devil is embedded in details that remain to be seen.


We must keep our television numbers up... Sponsors buy off television... I
think the television number determines the future of the sport. - Randy
Bernard

This is a direct hit. Nothing can create revenue-generating leverage like good television ratings. That Bernard recognizes that poor TV ratings are much more than an unfortunate inconvenience is very good news for IndyCar fans.

Dan Ochs, manager of programming and acquisitions at ESPN, then chimes in with this gem.


We need to determine what's causing viewership to fall off. - Dan
Ochs


The Indy 500 has established historic statistical lows in consecutive years for the following:


  1. Television Rating
  2. American Drivers

Might there be a causal relationship?

Anyway, let's return to Bernard.


We haven't changed the product, and until we change the product, we have to
be very realistic on this. - Randy Bernard


Mr. Bernard shall get no argument from me. IndyCar has never seriously attempted to manage its product. If it were to do so in a strategically advantageous way, then it might just be able to become a viable competitor in the marketplace.

That, of course, is where those devilish details enter the picture. The product is much more than chassis and engines. The IndyCar "whole product" includes drivers, racing circuits, television broadcasts, and more. A new spec in and of itself could represent nothing more than added cost.

Much more important are those things that the new specs might allow IndyCar to do. Appealing to the present group of true believers will not be sufficient.

I thank Mr. Bernard for providing encouragement and wish him well as he attempts to deduce specific solutions.

Roggespierre

11 comments:

  1. Same handwriting was on the wall since the title sponsor announcement last Nov.

    Kelly is a douchebag, and neither his "marketing savvy" or Bernard's connections have earned anybody a dollar.

    That's cool, give them time, right? It will all get better. The argument Bernard and Izod deserve is that all of the plans they have announced where invisible on first inspection.

    The surprise is that smoke and mirrors continue to prop up enthusiasm for some. Everyone else gets ignored.

    All I have been able to learn so far is that Izod is a $1B company, 96% of sales in the U.S.

    PVH stock peaked a week before the 500, fell $15 per share since. Coincidence, probably, who knows? That volatility should be unaffected by the Hilfiger deal, which was 2 months before Indy.

    So is there a way to read Izod tea leaves, and suspect they have a reason to stay beyond this year? The season is half over, and they have been a failure from any objective analysis of available info.

    Andy

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  2. What a toolish and totally pointless comment, Andy.

    Demond Sanders
    18to88.com

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  3. Here is my nomination for silly quote from the AP interview: "You never want to see numbers continue to decrease, but I think we have to connect with our fan base." - Randy Bernard

    What "fan base"? Really? No one is glued to the TV, Randy. No one is buying tix. There are pockets of mostly aging leftovers, those attending on a pass, and a lost generation, most of whom don't know Mario or A.J. and aren't amused by the current offering.

    Looking at a few sites, analysts generally look for PVH to trade in the $41 to $56 range...it's at $49.71 coming off an April high of $68.18. I don't see anyone recommending a buy.

    The Izod/PVH investment in IICS is small, about $10 mil total over the contract (IIRC), according to their annual report, available on-line. I doubt they're going anywhere.

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  4. http://www.sportsbusinessdaily.com/article/134680

    "The new name will be the Izod IndyCar Series. All in, Izod's spend next year is expected to be close to $20M."

    Hard figure to nail down, Barnhart implied it was more than $10M.

    PVH at today's close at $49.71

    52 WEEK HIGH 04/23/10 - $68.18
    That's the figure from Bloomberg Business week.

    Since I'm not an investment "tool", I was hoping to find context to clarify Izod's share of the PVH brand lineup, and see if there was any positive or negative relationship to the sales figures or stock price which reflected the IRL title sponsorship. I'm doubting there will be enough dots to connect, but I thought I'd ask in case anyone knew.

    Demond, thanks for putting down your Vanity Fair to comment. I'm afraid it's way over my head. To people who fix things, a "tool" is a tool. What's in your box?

    Andy

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  5. Andy, you can find the company's annual report at PVH.com. Page 74 lists "sponsorship obligations for 2010 thru 2014 totaling $34 million, and that includes Indycar, IZOD Arena naming rights, and an NFL HoF tie-in. $6.3 mil in 2010. $11.2 mil in 2011.

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  6. Cheers mate, I missed it. The HoF program was written elsewhere as a $10M deal.

    That's the one I suggested they morph into an Indy HoF program, but I guess the 1.5 million website hits from NFL fans wasn't worth the effort to paste a couple of links up on the site.

    A marketing guy might call that a "tool".

    Andy

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  7. Depending on accounting - the advertising buys are probably charged off elsewhere - so if some one says an annual total is $20 mil, it may be a "true statement" all in. I just don't see Izod/PVH pulling out of the deal short of a total collapse, although they may reduce their other ad buys on other Versus programming. They know they bought in at the basement...or not far from it.

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  8. That makes good sense about the ambiguous numbers. Hope you're right about Izod sticking, but the same questions are probably being asked by any other potential major sponsor.

    Andy

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  9. Bernard has been in office for all of 4 months. IZOD jumped in last year knowing full well the condition of the Indycar series was fairly dire... to speculate that they are going to suddenly pull out after one year has no factual basis.

    What other sport could you become a title sponsor for such a sum? It was a calculated risk for IZOD and they'd look like morons for hopping out of bed so quickly.

    Trying to determine a positive or negative financial impact on IZOD after less than a year is not very realistic.

    Demond Sanders
    18to88.com

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  10. Here's what's not realistic:

    Izod's commercial presence was painfully visible during the 2009 season. They partially subsidized Ryan Hunter-Reay. They staged a big Times Square driver appearance to precede the 2009 Indy 500.

    When video footage was shown at the Nov. 2009 title sponsor announcement, more handwriting appeared on the wall. Turns out, they had been doing in-store appearances at Macy's in several cities to drum up support for upcoming IRL events.

    Handwriting says...wow, I didn't realize they had already been trying this hard, and spending this much. It sure isn't working.

    So for 2010, Izod elevates their spend and does a lot more of the same. How much? Hard to figure. Buying only 5 races for RHR ($2M minimum)wasn't real sharp: their car won't be running unless they are successful in begging for a sponsoring partner. That's what the Wahlberg nonsense was all about.

    The 2009 NFL playoff commercials were valued on the day the Brazil ratings came out...no movement of the needle. Did $250K in your favorite magazine draw viewers to the 500? The "Race to the Party" online streaming? Paying GolinHarris to run press releases on business sites, and bring in celebrity guests? Did Izod get any pub for the way they ran the two-seater program?

    Izod hasn't done much at all to appeal to the disaffected fans that Bernard wants back, or to develop new fans in the demographic they are trying to attract. What I can't find out is whether or not the "cars and stars" image is selling them lots of clothes.

    If so, great. Then their lack of connection to racing fans old and new doesn't matter, and they stay put. If their plan was to grow their customer base by growing the popularity of IndyCar racing, they are failing miserably.

    There's your factual basis to dismiss or shove at your discretion. As for Mr. Bernard, he is a novice to the motorsports business, not the marketing business. That's why he was hired and highly touted.

    While the term of Bernard's participation has been short, the established connections and business savvy he bought with him have yielded no apparent result either. Announcements that have been made to date were of dubious value in my opinion, and the lack of their effect confirms my skepticism.

    In two interviews, I have heard Mr. Bernard quote Robin Miller. It's nice to have friends, and thousands of supporters like RP who think you're doing a really great job. You'll have to point out to me exactly what Mr. Bernard has accomplished, and what great ideas he has received from his new friends and fan club.

    To date, my reaction is similar to the debut of the Delta Wing. I read great praise for the innovative new direction that would shape the future of IndyCar...coincidentally, a lot of it from Miller. I was stoked then, too. Mr. Bernard was even there, before having taken office, to see the tarp pulled off.

    Survey says...That's IT??? That's the rough draft of a collection of bad ideas and great estimations of their value? Not "toolish", foolish.

    We'll see what vast marketing plan is revealed as promised in September, or whatever the corresponding month is on the magical IRL calender. I'll laugh if any of the dozens of ideas I have sent are implemented, even though no more than a couple have been acknowledged.

    I emailed another one last night. See the ratings for World Cup on Univision? Think they have local affiliates in Chicago and Miami? Think Viso and Duno speak Spanish? Think the contingent of Hispanic drivers in the IRL are recognizable in the vast U.S. Hispanic community? Think Snapple has a $15M annual marketing budget allocated for advertising to target that specific audience? Think Snapple has an interest in IndyCar?

    Look it up and get back to me. Or send your better ideas to your new hero, and wait to see the new dawn of IndyCar arise.

    Andy

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  11. I wanna fuck Sarah Morgan's brains out and suck her huge tits.

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