Friday, March 26, 2010

IRL Advisory Board: Who and Why

Let's assess the composition of the advisory committee that will recommend a new IndyCar chassis to IRL CEO Randy Bernard.

Thanks to this article in the Indianapolis Star, we know that the board will include the following.
  1. Retired Air Force General William Looney (Chairman)
  2. An undetermined league representative to be chosen by Bernard
  3. An IRL team owner to be selected by his peers
  4. A marketer/promoter to be picked by Bernard
  5. A race engineer
The list has the makings of a good start for the following reasons.
  • Looney's job is to ensure that all factions are heard.
  • Team owners are rightly included because new equipment will require significant capital investment on their part.
  • We shall assume that "marketer/promoter" means "race promoter", one who assumes the financial risk associated with operating an IndyCar event. Certainly this is a constituency that must be given ample consideration.
  • Engineering consultation is essential because the car must be safe, fast and functionally efficient. We should also hope that this particular engineer is adept at cost analysis.

What's Missing?

In my opinion, the committee still lacks the comprehensive expertise that will be required to fulfill the formidable business objectives that the IRL needs to achieve with its new car project.

First, why are the broadcast partners not represented? Increasing television ratings is by far the fastest way to increase revenue to the league and its promoters, teams and vendors. The new car should be ideally suited to accommodate slick production in High Definition. To not include a representative of either Versus or ESPN/ABC would seem to be a rather significant oversight.

Second, a marketing consultant should be added to the committee. The league should be able to find plenty of them at Indiana University's nationally ranked Kelley School of Business. Happily, that particular institution just so happens to specialize in sports media and marketing!

At Kelley, the IRL will find plenty of highly qualified, experienced marketing experts who might offer analysis such as that which is found here, here, here, here and here. One need not be a pseudonymous blogger to know this stuff.

Third, I believe that including the right kind of "marketer/promoter" is crucial. I would not include one who benefits from financial backstops provided by municipal and state governments. That would mean, for example, that the Edmonton and Barber promoters are out.

My pick would be Bruton Smith, or at least an emissary of Bruton Smith. Speedway Motorsports has been a loyal customer of the IRL for more than a decade. It promotes events at multiple locations, including ovals and a road course. More important, it is a for-profit corporation that does not benefit from direct government subsidies. In other words, Bruton and his firm require a genuinely profitable product, one that attracts lots of fans and corporate advertising dollars. His inclusion in this process is essential.

Finally, I am curious to learn who the "league representative" shall be. I can only hope that it is someone who can anticipate being held accountable for successfully marketing the end product.


Thursday, March 25, 2010

Timeout to say Congratulations!

The Butler Bulldogs defeated Syracuse tonight, 63-59, to advance to the Elite Eight of the NCAA Tournament for the first time in school history.

Butler is a fine school in a great community. I spent some time there, taking graduate business courses that prepared me well for the full-time MBA program at Georgetown. Please don't mention the Hoyas' effort in this year's NCAA Tourney.

Long-time IMS announcer and late friend of Roggespierre's family Jim Phillipe was a long-time teacher in the drama and radio departments at Butler. Erstwhile IndyCar competitor Ed Carpenter is a Butler alumnus.

Congratulations, Bulldogs!

We shall recommence discussion of the IndyCar Series tomorrow morning.


IndyCar: The Task at Hand

It is impossible to overstate the importance of the advisory board that will select a new IndyCar chassis and/or concept to IRL Chief Executive Randy Bernard. A primer that outlines the group's mission was provided this week by Curt Cavin of the Indianapolis Star.

I suggest that you read Cavin's article carefully before you continue reading the analysis here.

The following quote from Bernard's chosen board leader, Retired Air Force General William Looney, is cause for some measure of concern.

"(Bernard) wants to make decisions in an open process with criteria that
comes up with the right answer for everybody, not just one particular interest

I commend Bernard for providing an open process. However, the devil, as they say, is in the details. That is where market success and market failure are determined.

It seems that Looney is describing a political process. In my view, that would be a mistake. Selecting a new chassis is a marketing activity. Ultimately, the "right answer for everybody" is the most cost effective solution that enables IndyCar to attract the greatest possible number of paying spectators and television viewers, as well as corporate dollars that tend to be driven by fan participation.

Therefore, the process of selecting a new chassis should not be about balancing and appeasing established constituencies, but rather it must be about growing the sport in a highly competitive marketplace. That requires establishing and delivering a defined set of core benefits to IndyCar's end users - fans.

I shall have more to say about this matter in the near future.


Tuesday, March 23, 2010

Bernard Selects a Real Leader

New IndyCar czar Randy Bernard obviously sought and found an experienced leader to head the advisory panel that will recommend the next generation of specs for the IZOD IndyCar Series.

According to the Indianapolis Star, the job will go to Retired Air Force General William R. Looney III. This is a man who has achieved much. I am therefore encouraged by his appointment. Congratulations, Mr. Bernard!
I trust that the general will effectively keep factional interests at bay throughout the selection process. That is, after all, much of the battle.
General Looney - here's hoping that you deem significant cost reduction and control to be Jobs 1A and 1B. Drivers are for driving, not financing!
The Citizens solute you and wish you well.

Monday, March 22, 2010

IndyCar Baguettes Bachelart a Financier

Behold, the next "star" of the IZOD IndyCar Series! He is Bertrand Baguette, and according to Curt Cavin of the Indianapolis Star, he has signed-on for 15 races in 2010 with Eric Bachelart's Conquest Rent-a-Ride Racing.

This rates as the most exciting thing to hit the IndyCar scene since Montagny-mania!

Randy Bernard, this is a symptom of the problems that you have inherited. You are not envied here, sir.

Bertrand Baguette might be a fine racer. However, he does nothing to increase consumer appeal of IndyCar racing in the United States, where it must compete with myriad sports entertainment operations for ticket buyers, television ratings, and corporate sponsorship dollars.

I have no doubt that this move is very good for Conquest Rent-a-Ride Racing team owner Eric Bachelart, who must be very pleased to have signed a financier, er, driver from his native Belgium.

I shall say it again. That which is good for IndyCar is not necessarily good for its suppliers of racing teams, and vice verse. An economist would call this a misalignment of incentives.

I call it yet another step toward complete anonymity and irrelevance for a once great institution, the Indianapolis 500.

Please help, Mr. Bernard!