The Indy Idea

Time to Kill the Brickyard 400?

2010-07-27T20:00:00.004-04:00

Those who have followed the ebb and flow of my writing here know that I have frequently held up NASCAR as a successful U.S. motorsports business with which IndyCar should compete in the marketplace.

In my view, that assertion is becoming questionable. Yes, IndyCar would still love to have NASCAR's problems - in particular, its television audience. However, my purpose here is to offer an opinion on a different but related subject.

The Brickyard 400 should die.

I believe those IMS officials who say that 140,000 paying customers, roughly 54% of capacity at the IMS, are sufficient to make the event profitable. The television money alone might be sufficient to ensure profitability.

However, it bears noting that the audience is dwindling with each passing year.

Blame whatever you like – NASCAR’s general decline, relatively poor viewing angles, Goodyear, the COT. The fact is that the event is waning rapidly. The Brickyard 400 is contributing to the erosion of the Indianapolis Motor Speedway brand.

I suspect that NASCAR has over saturated the market for auto racing in the United States. If I am correct, then the House of France is dealing with a very large problem that it might not be able to solve. Its shared interests with the International Speedway Corporation and the threat of lawsuits from its other promoters likely render NASCAR unable to decrease its “inventory” of racing product, at least with regards to the Cup Series.

NASCAR’s problem need not be the Indianapolis Motor Speedway’s problem. After all, the IMS is certainly not immune to the problem of over saturation. Eliminating the Brickyard 400 would enable the IMS to reduce the “supply” of dates that are available for fans to witness racing at the track. This, according to simple economic theory, would likely increase attendance for those dates – in May – that remain. This would be good for the IMS and for IndyCar racing.

The good news is that the Indianapolis 500 is still very special. We know this because, in spite of everything, its rate of decline is minuscule compare with that of both the Brickyard 400 and the United States Grand Prix.

If NASCAR sponsors want to participate at Indianapolis, then let them become IndyCar sponsors.

Roggespierre

IndyCar Notes

2010-07-26T17:03:00.002-04:00

Hello, all. It's been awhile.

I have a few things to say.

1. Could it be that the NASCAR model is fundamentally broken? The decline in attendance is becoming embarrassing. The television ratings are still very good when compared with historical standards for motorsports in the United States. Nevertheless, they're falling, too.

2. I am disheartened by reports that John Lewis has resigned. He has a terrific reputation both inside and outside of racing. He shall be missed.

3. Some might find it somewhat surprising that I have been silent regarding the Dallara-and-Clothes announcement. My reasoning is that we need more information before we can make any judgments about the program. There is one exception, of course. Given the market value of operating an Izod IndyCar Series team, we can say with certainty that the new Dallara costs too much.

Roggespierre

IndyCar: See the Future!

2010-07-07T20:30:00.000-04:00

I go back and forth on the "innovation" question as it pertains to IndyCar racing. Yes, innovation was a great selling point for racing for nearly a century. However, as the author of this story in Slate writes, innovation in those days had everything to do with top-end speed.

That is not the case today.

Again, I point you in the direction of the column in Slate in which Edison2 is discussed.

Former racers Ron Mathis, Kevin Doran, and Brad Jaeger (Indy Lights) are managers for this very ambitious company located in Lynchburg, Virginia.

The Edison2 also provides a nice tie-in with IndyCar because it runs on E85 Ethanol. According to the company, the 750-pound Edison2 has demonstrated that it can get 101 mpg. That won't help APEX Brasil and UNICA sell ethanol, but it might just give IndyCar racing something interesting to promote.

Might we some day see the 5-gallon Indianapolis 500?

Roggespierre

2010-07-06T16:23:00.000-04:00

I present the following whopper of a quote from the Indianapolis Business Journal's Anthony Schoettle.

For many years, the series has operated under the false notion that the
teams are the most important component of the series. Don't get me
wrong. The teams are important, but they're not the singular element that
will make this series go.

Schoettle is correct, in my opinion. Teams supply a very important portion of the IndyCar product. They are not, however, the whole product. They aren't even close.

For example, no one in his or her right mind would claim that the Penske, Ganassi and Andretti teams are not far superior to those that participated full-time in the Indy Racing League prior to 2002.

Nevertheless, the facts indicate that interest in IndyCar racing has actually decreased since the Big 3 showed up. We know this because we have seen the crowds dwindle at multiple venues. We also have television ratings- the Indy 500, other network races, and cable events - that tell the same story.

Teams that show up with largely unknown financiers posing as drivers are not doing IndyCar any favors. Furthermore, the few IndyCar drivers who were actually hired by their teams aren't exactly easy for Randy Bernard & Company to sell.

The time has come to quit treating those teams with deference.

Roggespierre

IndyCar Future: the macro view

2010-06-29T16:52:00.002-04:00

The gentleman pictured above is Herbert Hoover, the 31st President of the United States. Fairly or not, his is the face of Great Depression.

You might be asking yourself what President Hoover has to do with IndyCar racing?

If a growing number of economists and hedge fund managers is correct, then we might just be headed toward the type of deflationary recession that prompted your grandparents to hide cash under the mattress and to wear the same overcoat for 50 years.

Keynesians and Austrians are beginning to agree that the risk of a global economic depression has never been greater. For those who are not familiar with economic schools, I shall say only that these two typically agree on exactly nothing.

If the economists are correct - and I note that they frequently are not - then what should IndyCar do in order to prepare? I have indicated my preference for low cost leadership positioning in the U.S. motorsports marketplace. Others have thoughtfully disagreed.

If the bottom really is falling out of the global economy, then what is IndyCar's best course of action?

I look forward to reading your thoughts.

Roggespierre

Another reason to cut IndyCar Costs

2010-06-29T08:30:00.000-04:00

In the past, I have worked hard to explain here why increasing television ratings should be jobs one, two and three for IndyCar management.

Simply stated, there is no other metric that can be leveraged in so many different ways to increase revenue to the league, its promoter-customers, and its suppliers of racing teams.

Reaching this conclusion is easy. However, accomplishing the objective is extremely difficult.

I invite you to read this fascinating Ad Age story about the value of prime time television ratings.

What might we be able to extrapolate from the article with regards to IndyCar racing sponsorship value? Is this good news or bad news?

I invite you to answer the question before I provide quantitative analysis.

Roggespierre

Dario does his part at New Hampshire

2010-06-28T13:12:00.002-04:00

That Dario Franchitti is an outstanding IndyCar driver is obvious. He is a two-time Indianapolis 500 winner and the defending series champion. His accomplishments speak for themselves.

Therefore, it would seem to follow that Franchitti should be a huge racing star in the United States. However, attendance and television ratings appear to indicate that he is not.

Like most IndyCar drivers, Franchitti is not from the United States. He must therefore work that much harder to establish himself as a competitive product in the U.S. motorsports marketplace.

In that regard, Franchitti has had a very good summer. He seems to have made appearances just about everywhere since May, when he won his second Indy 500.

Franchitti's latest promotional effort was Sunday at New Hampshire Motor Speedway, where he drove three laps in his Target Ganassi Indy car to promote the series' return to NHMS in 2011. Witnessing a fast race car on the New Hampshire oval no doubt shocked many of the NASCAR Cup partisans.

Personally, I look forward to seeing IndyCar's return to NHMS. I am rooting for Jerry Gappens and Randy Bernard to pull off a highly successful event.

They will need lots of help from IndyCar's "stars". Dario Franchitti appears to be working hard to become exactly that.

Let's hope that Dario becomes the most widely known Scot in the United States since Adam Smith.

Kudos to you, Dario. Don't stop now. Come down here and mingle with the Citizens. Get to a county fair or two this summer. Try the pork tenderloin.

You've only just begun!

Roggespierre

Yankee Go Home: USF1 Banned... Forever!

2010-06-25T17:30:00.000-04:00

The United States takes great pride in being the Land of Opportunity. Despite growing cynicism, we remain a nation of dreamers.

The Old World harbors a less romanticized disposition.

The USF1 dream died a humiliatingly public death today at the hand of the World Motorsports Council. Apparently, these guys don't take kindly to vaporware.

If IndyCar were to operate in this manner, then we would see heads rolling across Gasoline Alley as a matter of course. This is the series, after all, in which talented and accomplished foreign ride buyers, let alone American dreamers, are unable to land a seat.

Roggespierre

IndyCar's Bernard talks Sense

2010-06-24T18:40:00.003-04:00

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:

Television Rating
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

Can IndyCar Sell at New Hampshire?

2010-06-23T00:54:00.003-04:00

It is no secret that the IZOD IndyCar Series will announce this weekend that it will return to New Hampshire Motor Speedway in 2011.

There are elements of this move that I like very much. NHMS promoter Jerry Gappens hails from the Rust Belt town where I completed my undergraduate studies, the same town that produced John Paul, Jr. Gappens is passionate about IndyCar racing. He has wanted a race date for more than a year.

I also respect Gappens for having been openly critical of the notion of IndyCar staging a race in the parking lot at Gillette Stadium in Foxborough, Massachusetts.

But Can It Work?

I will admit that I attended the IRL race at what was then New Hampshire International Speedway in 1997. I was joined in the grandstands by approximately a dozen of my closest friends.

The race was fantastic. It was won by the handsome young man to the left, Robbie Buhl, who edged former F1 driver Vincenzo Sospiri at the finish line. The win was undoubtedly sweet for Buhl, a former CART Indy Lights champion whose reward had been a part-time ride in Dale Coyne's s#*$box. He then stood on the sidelines while guys like Andre Ribeiro and Carlos Guerrero landed quality rides in CART. Sound familiar, J.R. Hildebrand?

So, yes, Buhl's win was warmly received. Unfortunately, there were virtually no fans there to receive it.

Incidentally, if you do go to the NHMS race next year, allow me to recommend that you include a quick jaunt to Portsmouth, New Hampshire while you're there. It has a great, authentic New England atmosphere without the great, authentic East Coast prices.

A NASCAR Track

Fans who supported CART during the split will no doubt recall that their favorite series drew fine crowds at New Hampshire. Unfortunately, The Split was not all that happened in the 1990s. There was also the unprecedented mainstream rise of a series called NASCAR Cup. NHMS was expanded to make room for all of those NASCAR fans.

One could argue that today's IndyCar Series is effectively a poor imitation of CART, one that features slower, less interesting spec cars and a whole lot less money from tobacco companies and arbitraged supply chains. Can this product draw a respectable crowd at a facility that has added capacity to accommodate NASCAR Cup?

And let's not forget that racing is a tough sell in New England.

Having seen the market breakdown for the 2009 Indianapolis 500 television ratings, I can tell you that the three local markets that had the lowest ratings were Boston, Providence and New York. Yes, there are racing fans in New England, but they tend to like NASCAR, Mods, and Supers. Will they want to watch an international road racing product at New Hampshire Motor Speedway?

As much as I want to see IndyCar succeed at oval tracks, I have serious reservations about this.

If Jerry Gappens can sell this bunch in New England, then he's one helluva race promoter. I wish him good luck and fear that he'll need it.

Roggespierre

IndyCar notes from the back of a hotel Napkin

2010-06-21T00:01:00.000-04:00

Vacation is a wonderful thing. If you ever have an opportunity to visit Coronado, California, then I strongly suggest that you do it. What a great place!

Scribbles

I am pleased to let you know that the Mario Andretti Honda commercial ran on the local ABC affiliate in San Diego immediately following the Los Angeles Lakers' Game 7 win over the Boston Celtics in the NBA Finals.

Pressdog reports that attendance at Iowa fell this year. Losing 5,000 paying customers is never good news, but is particularly troubling when that amount is equal to more than a 14% year-over-year decrease. The erosion of IndyCar's oval fan base continues unabated, it seems. IndyCar can't blame ISC and its unbundled NASCAR Cup tickets for this one.

That said, a crowd of 35,000 - that's 105,000 in 3-day attendance parlance - at Toronto would likely be hailed as a huge success.

Cranking the Mill

From the rumor mill, I am hearing that Randy Bernard is now consistently turning to Robin Miller for advice. If this is true, then I think it is a troubling turn of events. Bernard is supposed to be a marketing genius, after all.

Full Disclosure - I like Robin Miller very much. He is candid, smart and very entertaining. He has always treated me well personally. Nevertheless, I have vehemently disagreed with Robin regarding certain subjects at various points in time. Regardless, I have never doubted that he genuinely believes in everything that he writes. He also happens to care about the Indianapolis 500 and IndyCar racing more than many of the sport's participants.

That said, Robin is representative of no one but himself. He is not a marketer. He is a nostalgic fan and quasi-insider who, like many of us, yearns for the good old days. The problem is that those who long for a return to glory tend to disagree about the causes and effects of the growth and the subsequent decline of IndyCar racing. Therefore, Robin is no more an authority than any other fan.

Roggespierre

Texas IndyCar Price & Market Value

2010-06-10T13:10:00.001-04:00

Thanks to multiple contributors who brought the latest IndyCar television ratings data to my attention.

You know who you are.

According to Sports Media Watch, the Firestone 550K on Versus attracted 518,000 viewers. The same race in 2009 drew 467,000 viewers. Any increase is good news for the series. Adding 11% year over year is solid.

These numbers give us an opportunity to value the returns to IndyCar team sponsors that are attributable to participation in the Texas race.

Math!

We begin with our quantifiable benchmark, namely the value of sponsoring a full-time championship caliber NASCAR Cup car in 2010. As we have said, published reports and our own revisions indicate that such a team could anticipate generating approximately $18.649 million per year in sponsorship revenue.

We assume that the primary driver of sponsorship value is television ratings. Supply chain derivatives and arbitraging activities that have nothing to do with the value of the racing product are excluded from our analysis. Subsidies that are paid to teams by drivers and the league are also excluded.

The 36 NASCAR Cup events in 2009 combined to attract approximately 236,720,000 TV viewers in the United States.

$18,649,062 / 236,720,000 viewers = $0.078781098838767

Therefore, the sponsors of a typical championship caliber NASCAR Cup team pay a bit less than $0.08 per U.S. television viewer. Therefore, that number (not rounded) is the market price that sponsors can be expected to pay.

Firestone 550K: the Valuation

I remind you that the IndyCar race at Texas attracted 518,000 U.S. television viewers.

Thus, the valuation equation:

518,000 viewers * $0.078781098838767 = $40,808.61

The Texas race was worth $40,809 in advertising value to sponsors such as Penske, GoDaddy.com and Target.

Return to the Benchmark

So, how did NASCAR Cup compare? Let's take a look.

Sports Media Watch notes that the Gillette Fusion ProGlide 500 at Pocono drew its worst rating since 2007. However, it still managed to draw 5.3 million U.S. television viewers on TNT.

5,300,000 viewers * $0.078781098838767 = $417,540

Therefore, the NASCAR Cup race at Pocono was worth $417,540 in promotional value to sponsors of the top teams.

The Meaning of Market Competition

Notice that the value that accrues to sponsors can be quantified. Econometrics are far more sophisticated than anything that I have noted here, but the point is the same.

This is why I am very concerned about returning to the CART model. Yes, CART event promoters did very well. Temporary circuits tend to be very good for promoters.

However, CART was fortunate that it did not have an established market competitor that was worth nearly 10x its value every time it put a product on the track.

In addition, tobacco companies that provided ample funding to CART and many of its teams and drivers are now gone. Those firms did not care about ratings - they advertised in CART because it was the only way that they could promote their products on television.

Those funding sources are gone forever.

Sponsorship of a top team in the Texas IndyCar race is now worth approximately 9.77% of sponsorship of a top team in the NASCAR Pocono race. Even if IndyCar were to quadruple its rating, its teams would still need to sell sponsorship at a price that is more than 60% cheaper than the price of NASCAR team sponsorship in order to be competitive in the marketplace.

Roggespierre

Oh, no! Boring Belle Isle might be coming Back!

2010-06-09T12:00:00.000-04:00

Detroit's Belle Isle is IndyCar racing's Rasputin. There are many reasons to hate it. Unfortunately, it is virtually impossible to kill it.

According to Paddock Talk, the annual parade through Belle Isle could return to the IndyCar schedule in 2011. Roger Penske would be the promoter once again.

Meanwhile, Indy 500 Champion Dario Franchitti is lobbying to have an IndyCar race through New York's Central Park. That might actually be pretty cool.

Nevertheless, for better or worse, the parade toward a primarily road and street racing series remains unabated.

Roggespierre

NASCAR fans... just like IndyCar fans

2010-06-07T19:44:00.005-04:00

According to Sports Media Watch, NASCAR just concluded its worst-rated season on FOX... again.

Read the entire story here.

Please note the comments section following the SMW story.

What are NASCAR fans doing? They're blaming the television partner!

Granted, IndyCar would love to have NASCAR's problems right about now. Let's hope that Randy Bernard and ICONIC figure out a way to take advantage when NASCAR Cup sponsorship valuations are adjusted downward.

I have discussed that very proposition here.

Roggespierre

MLS likes IndyCar Cable TV Partner

2010-06-06T20:00:00.004-04:00

IndyCar insiders have blamed Versus for the series' poor cable television ratings. However, another niche sport in the United States apparently believes that Versus might just provide the key that will unlock future growth.

According to Broadcasting & Cable, Major League Soccer has initiated preliminary discussions that might lead to a deal with Versus. MLS is apparently impressed with the way that Versus has promoted and increased ratings for the National Hockey League. The package that is the subject of current negotiations airs presently on Fox Soccer Channel.

Major League Soccer is one of few properties that draws fewer U.S. cable viewers than IndyCar. According to Sports Media Watch, the MLS on ESPN2 drew an average of 290,000 viewers per game in 2009. This year's season-opener on ESPN2 drew 285,000 viewers, down 14% from last season.

Some sports that are very popular globally simply do not attract a large audience in the United States.

For proof, we need look no farther than the ManU/Chelsea Premier League match that attracted a whopping 526,000 viewers on ESPN2, a new Premier League record in the United States. That number is in the same ballpark with IndyCar races on Versus.

Culture Matters

In the United States, soccer is a game that is played primarily by suburban school children. In many other nations, the game is both a deep-rooted passion and a very serious business.

Similarly, road and street racing in the United States tends to be great fun for a small niche that likes that sort of thing - the exception being NASCAR Cup at Watkins Glen and Sonoma, the two most popular road races in the United States. Globally, that particular brand of racing is widely considered to be the ultimate test of man and machine.

No racing series can change an entire national culture. Apparently, neither can a professional soccer league. The difference is that racing costs much, much more than soccer. That is why it requires a much larger audience.

MLS might be profitable with an audience of approximately 300,000 U.S. TV viewers. IndyCar enjoys no such luxury.

Roggespierre

Briscoe foils potential huge night for IndyCar

2010-06-05T22:57:00.005-04:00

The Texas race was pretty good, in my opinion. There seemed to be solid action throughout the pack all night long. Penske and Ganassi did not finish 1st, 2nd, 3rd, 4th and 5th, which I had feared might occur.

Unfortunately for IndyCar, Ryan Briscoe won the race. I say unfortunately because, had Danica Patrick finished 1st rather than 2nd, IndyCar would have been the lead story on Sports Center and would have owned the front pages of sports sections throughout the United States.

Victories by Ryan Briscoe, a nice guy and a talented driver, are typically deemed to be irrelevant.

I suspect that this one shall be no different.

Roggespierre

Who wants to Promote Edmonton IndyCar?

2010-06-04T19:30:00.007-04:00

Having absorbed $9.2 million in financial losses in exchange for the privilege of hosting two IndyCar races at an airport, promoter Northlands apparently wants out and the City of Edmonton is seeking to cap its future losses.

Such is the glory of temporary circuits! Congratulations, Baltimore!

Props to Honest Edmonton

That said, I do want to give credit to the City of Edmonton for its candor and transparency. I doubt that any government takes great pleasure in disclosing that it will have incurred losses of more than $10 million in public funds over three years so that it could host an IndyCar race.

If Long Beach, St. Pete, Sao Paolo, Birmingham, Toronto and Baltimore were more like Edmonton, then we would have a much better grasp of the gap that exists between the cost of IndyCar racing and demand for the product in the marketplace. Yes, city streets and Barber's permanent road course are likely more cost-effective than airports. However, in each case virtually all of the costs are variable, meaning that they must be incurred every time an event is staged.

What in fact is the difference? We'll probably never know.

Credit also goes out to Pressdog for being the first to point IndyCar fans toward this article from the Edmonton Sun.

The article strongly suggests that Northlands, the public-private partnership that promotes special events in Edmonton, wants out. Given the losses, who can blame it?

The author further suggests that the City of Edmonton is willing to continue to subsidize the event at a price point of $1 million per year. The City would like to see an "independent" promoter take over the event.

What does this mean?

It means that the Edmonton Indy will survive beyond 2010 only if a promoter agrees to accept all associated financial risk beyond $1 million per year. It also means that Northlands, the existing promoter, does not believe that it can break even despite the offer of a $1 million annual government subsidy.

That Northlands does not want to continue to promote the event speaks volumes. This is particularly disturbing when one considers that Honda will transfer to the Edmonton promoter some of the economic rent that it collects by over-charging IndyCar teams for old, spec engines. The article refers to this transfer as event "sponsorship".

This does not seem to bode well for the future of the Edmonton Indy unless a greater fool can be found.

I ask that you please keep the Edmonton equation in mind when you are tempted to blame International Speedway Corporation - a for-profit, publicly traded firm that receives no direct government subsidies, when it inevitably drops additional IndyCar races.

Roggespierre

IndyCar: Versus and National Identity

2010-06-04T10:16:00.011-04:00

Those who have read this blog in the past know that I have no tolerance for those who blame Versus for IndyCar's cable television ratings woes.

The argument is simple. If you have a product that people want to see, then viewers will find you. Recall that it was not that long ago that a large portion of the NASCAR Cup schedule aired on The Nashville Network. The success that NASCAR enjoyed on second-tier cable demonstrated to national broadcast networks that Cup was a national sports entertainment product that was worth pursuing.

Conversely, IndyCar's poor ratings on Versus are well documented. Apologists have done what they have always done - blamed the telecaster.

A Product in Demand

Well, it seems that people indeed can find Versus if the product is something that they want to watch. I thank frequent commenter Andy Bernstein for bringing this article at Sports Media Watch to my attention.

Wednesday's Game 3 of the Stanley Cup Finals drew a 2.0 rating and 3.6 million viewers on Versus. The game between the Chicago Blackhawks and the Philadelphia Flyers was the highest rated Stanley Cup game on cable since 2002.

Some might argue that the ratings increase is due to the fact that two very popular teams happen to be playing in the Stanley Cup Finals. In my view, that argument is correct. It also supports my point concerning American drivers.

Versus is available only in the United States. Therefore, it benefits from having two popular American hockey teams playing on the sport's grandest stage. What do you think the Versus rating might have been if the Finals had included, say, the Montreal Canadiens and the Edmonton Oilers?

Facts are not always Fair

The market is telling IndyCar that the nationality of the participants matters. It provided a strong suggestion to that end in 2009, when the Indianapolis 500 had a record low eleven Americans in the field and earned its lowest rating in history on ABC. The market spoke very clearly again in 2010, when the Indianapolis 500 had nine Americans in the field, another new record low, and garnered its lowest rating in history for the second consecutive year.

The local market in Indianapolis spoke clearly on Memorial Day, when the rating for the 500 Victory Celebration dropped approximately 33% year over year. There is only one reason to watch the Victory Celebration - to listen to the drivers talk. One-third of the 2009 Victory Celebration audience determined that it was no longer interested in hearing IndyCar drivers talk.

Incidentally, a street spectacle in Baltimore will not solve this problem. In my view, each event that attracts international road racers only compounds the problem.

Argue with my opinions all you like; I welcome differing points of view. However, I do ask that you offer facts that support your conclusions.

In my view, the facts all tend to make the same statement - clearly, concisely, and loudly.

Roggespierre

IndyCar Engines on Second Thought

2010-06-03T08:32:00.004-04:00

Comments from some of you have led me to rethink my initial position on the IndyCar engine spec announcement for 2012.

I confess that I know very little about the technology that makes Indy cars go. Frankly, technology for its own sake does not interest me. What does interest me - and what I believe is far more important than the spec itself - is technology's impact on three crucial marketing questions.

Does it enhance on-track competition?
Will it significantly reduce the cost of entry to correspond with the product's market value?
Does it increase the probability of adding American drivers who might be more easily sold to U.S. motorsports consumers?

Speedgeek addressed the first point quite persuasively, in my opinion.

Personally, I could see IndyCar allowing 4-cylinder engines and/or engines that come in under 2.4 liters extra boost pressure, a larger air restrictor or extra fuel flow. They kind of left that door open in the announcement... To my mind, this relatively open spec for small displacement turbo engines has been the way to go all along for the 2012 car, and to me it sounds like they're picking the route that will spark the most interest from manufacturers and fans alike.

Citizen John addressed my second and third questions. As usual, he brought relevant facts to the discussion.

Provided they are interested in participating, Mazda is one of few marques who could answer the call for 2012 with an existing product. Their 2.0L MZR-R sports car engine, now in its fourth year of service, already uses alternative fuels... without the restrictor, reaching the stated ceiling of 700 hp would not be an issue.

And my favorite part.

While the 2010 version of an MZR-R lease agreement is still being debated, it could be similar to what MAZDASPEED offered in 2008 and 2009: a three-year lease for one engine, including all electronics and ancillaries, for $60,000 the first year, $50,000 the second and $40,000 the third. With two or three engine rebuilds added in the $35K apiece range, you still walk out the door around the $150K range each year.

The prospect warms my heart.

Therefore, I shall reserve judgment as the circumstances evolve. If Speedgeek and Citizen John are correct, then it could well be that IndyCar is effectively utilizing the 2012 spec to address its ample marketing challenges.

We can hope.

Roggespierre

Honda wins IndyCar Engine Sweepstakes

2010-06-02T19:49:00.004-04:00

Wow, that ICONIC committee sure did make quick work of determining the new engine formula for the IndyCar Series.

Make no mistake, today's announcement is a big nod in Honda's direction.

Honda was the only manufacturer that preferred a 6-cylinder motor for the new 2012 spec.

The stipulation that other manufacturers are allowed to compete with smaller engines is meaningless. Honda's monopoly is secure for the foreseeable future.

That Mr. Honda himself, Gentleman Gil de Ferran, was selected to speak for ICONIC only enhances the impression that the fix was in.

This does not bode well for Delta Wing, the only chassis proposal that did not assume that the engine choice would be the Honda V6.

So, when do we get the Dallara announcement?

Roggespierre

Benefits of Pricing IndyCar to its Market Value

2010-06-02T12:06:00.002-04:00

The primary mission of The Indy Idea is to discuss how IndyCar might become a viable competitor in the motorsports entertainment marketplace. At present, it is not.

IndyCar is not economically competitive because it is grossly overpriced. I initially provided quantitative evidence in support of this argument here. I further revised my analysis here and here. I further explained the ramifications of IndyCar's non-competitive market position in the second half of this post.

The relevant microeconomic assumption is that demand exists for virtually any product at some price; however, demand does not necessarily exist at any price. For example, McDonald's sells millions of Big Macs each year at a price point of approximately $2.99 apiece. How many Big Macs do you think McDonald's would sell if the price were no less than $11.96 apiece?

That is effectively the value proposition that IndyCar and its teams offer to sponsors.

If you are interested to know why sponsors such as Target and 7-Eleven are willing to take that deal, you will find answers here. Unfortunately, firms of that particular type are too few in number to sufficiently finance the IndyCar Series.

Incidentally, this is a marketing exercise. Think of it as having to do with the 2nd "P" of marketing - Price.

IndyCar "As If"

Let us assume that IndyCar might somehow price its product to correspond to its market value. That would necessarily mean that operating a competitive IndyCar team for the entire season must cost no more than $1 million.

Setting aside exactly how we might accomplish this objective, let us examine the potential benefits so that we might accurately judge whether or not the resulting pain would be worth it.

The following list is by no means comprehensive. The benefits are merely top of mind effects that would be the logical economic results of pricing IndyCar racing to match its market value.

Teams attract sponsors because sponsorship is correctly priced

IndyCar attracts sponsors at the series level because sponsorship is correctly priced

TEAM subsidy payments can be cut because teams have fewer costs and more sponsors

Some savings from reduced TEAM subsidies can be used to promote IndyCar

Team and series sponsors can increase activation and promotion budgets because the cost of entry is reduced

IndyCar can reduce its required sanction fee because it no longer must subsidize teams

Profits to race promoters increase because the sanction fee is reduced

Race promoters can reinvest some of those profits to increase promotion of IndyCar events

Demand for IndyCar races increases among race promoters and tracks because IndyCar events are profitable

IndyCar selects new events according to strategy rather than necessity because it has a broad selection of available venues

Team owners can hire drivers based on talent and marketability because correctly priced sponsorship is available

The ladder system begins to work because the top rung is available to drivers who demonstrate that they are talented and marketable

Ride buyers continue to exist; the only difference is that there are more of them because rides are cheaper to buy

Field sizes therefore increase

Drivers who fail to qualify are not excluded for the remainder of the season because their sponsorship packages are correctly priced for a full season; financial risk to sponsors is reduced

On-track competition is enhanced because the entry list grows

Pie in the Sky or Something to Try?

Those effects seem pretty desirable to me.

That said, we must consider how IndyCar might devise a product that allows teams to sell primary sponsorship at its true market value. The cost of entry would need to be no more than 25% of the current price.

It can be done, albeit painfully.

Therefore, I ask for your help. I am looking for ideas both big and small that will drastically cut operating costs.

I am not looking for reasons why it can not or should not be done. Don't tell me why I should pay $11.96 for a Big Mac. I don't care how much you like Big Macs. You'll never convince me that I should pay more than $2.99 for it.

Roggespierre

2010 Indy 500 gets Record Low Overnight TV Rating

2010-06-01T17:06:00.001-04:00

This should not be a surprise to anyone.

Digital Sports Daily is reporting that the 2010 Indianapolis 500 earned the worst national overnight rating in the event's history. The source is new to me, but I believe the number to be credible.

NOTE: SportsBusiness Daily has now confirmed the 4.0 overnight number.

Thus, a racing product that is not designed to attract a large American television audience has again failed to attract a large American television audience.

DSD claims that an ABC source indicated that the overnight composite number is a 4.0. That is down 4.76% from the record low of 4.2 that was set last year.

That number is also less than the NASCAR Cup average on Fox (4.9) this year.

The overnight rating reflects viewership in the nation's largest, "metered" television markets. We should anticipate a downward revision when the smaller markets check in and the final rating is released.

Apparently, the IZOD IndyCar iteration of a U.S. based international road racing series is heading toward the same fate that greeted the previous permutations: CanAm, CART, and ChampCar. Mergification has generated worse television ratings than The Split.

Promotion of the event and its drivers was up this year. IZOD did a fine job holding up its end of the bargain. Promotion is not the principal marketing problem that imperils the IndyCar Series.

No, the core difficulty is that most Americans who are willing to watch racing on TV are not willing to watch an international road racing series on TV, not even when it races at the world's most celebrated oval. Promoting these drivers and these cars will not generate the desired results.

Randy Bernard, your suppliers of racing teams are gradually devaluing the one marketable asset that remains in your purview. How to stop the negative feedback loop? Here's one idea.

The Revolution is eating its children. The guillotine blade draws nearer with each "successful" government-subsidized event and every new Piloti-shod financier.

Additional Ratings Info (5:06 p.m.)

Sports Media Watch is reporting that the top market for the 500 was - surprise, surprise - Indianapolis. So, where else does IndyCar racing have some fans?

Dayton, OH - 9.3
Louisville, KY - 8.4
Fort Myers/Naples, FL - 8.4
Orlando, FL - 7.2

Notice that those nascent urban racing markets that IndyCar appears to be pursuing are not at the top of the list.

Roggespierre

Mainstream Media: Where are Indy's Americans?

2010-06-01T07:07:00.027-04:00

These pages were supposed to serve as a warning to IndyCar Management.

American drivers are a necessity if IndyCar racing is to experience legitimate growth in its home market.

American competitors are essential if the crowd at the 2014 Indy 500 is to include more people than attended the United States Grand Prix.

American racers are also necessary - if not sufficient - to increase national television ratings, which are now worse than they were at any time during the split.

This story is now beginning to dominate IndyCar coverage in the mainstream media. Randy Bernard and his charges will not be able to control it. It's an easy and convenient story to write because it requires zero knowledge that can't be attained with a brief perusal of the entry list. It also happens to be true.

Fox News has enjoyed taking pot shots at IndyCar over the past few years. This makes sense because Fox has a lot of money invested in NASCAR.

Here's the latest from the "We Report, You Decide" network.

Impressions Outside IndyCar (where they matter most)

Alas, Rupert Murdoch's minions are not alone.

The USA Today version of the same story can be found here. Among other things, the writer suggests that the Indianapolis 500 has become the French Open. That's a good line.

These stories mirror the one that was penned for Sports Illustrated last week by Tim Tuttle, an established motorsports writer who has tended to be kind to IndyCar and the IMS.

The same point is echoed in this story from the Quad City Times.

Something called The Daily Caller weighs in with this offering.

I become physically ill when I read stories like these not because they are wrong, but rather because they have it mostly right.

Once again, good luck to you, Randy Bernard. Tony George never was able to move the mainstream media needle away from the Story of The Split. The story that you must either solve or change is that of The Dwindling American Relevance of the Indianapolis 500.

You are not envied here, Mr. Bernard.

That said, I will suggest that having IndyCar drivers spend considerable time extolling the virtues of Brazilian Sugar Cane Ethanol is probably not going to help very much.

Further development of the "ladder system" is also a waste of time so long as the cost of fielding an IndyCar entry exceeds the value that a team can offer to potential sponsors. Want proof?

J.R. Hildebrand
Jonathan Summerton
Robbie Pecorari

Another Solution that Solves Nothing

Chip Ganassi Racing's Mike Hull is a bright guy who often suggests possible solutions. This is ultimately a good thing for which he should be commended. However, Hull is not a marketing guy. Perhaps that is why he believes that additional manufacturer participation is a big part of the solution.

This is simply wrong. Manufacturer competition will not bring fans back. The stars of the show are the drivers. They must be changed. The Piloti-shod financiers must be expelled. They must be replaced by drivers that auto racing fans in the United States want to watch. That will require drastic cost reductions.

Manufacturers will finance teams; that's why team owners and managers like them. But manufacturers will do nothing to attract U.S. fans and television viewers. Want proof?

Hideki Mutoh
Kosuke Matsuura
Twin Ring Motegi

These are strings that were attached to manufacturer money.

Want more proof that manufacturers are not The Answer? Notice the trend in IRL network television ratings when Honda and Toyota joined the series in 2003. Manufacturers offer financing. They do not attract fans.

That said, I believe that Hull is right about many things. Among them is his claim that fans want more diversity in the cars and engines. However, manufacturers are not necessary in order to accomplish the task. IndyCar's salad days were dominated by privateers. Innovation was a grassroots phenomenon. It can be again.

Who knows? Today's IndyCar teams and their suppliers might even develop technology that they can sell to manufacturers. Perhaps the league could develop an Intellectual Property Co-Op for that purpose.

There are many possibilities. Let us hope that Randy Bernard, Brian Barnhart, Mike Hull, Eddie Gossage, and the other smart people in power examine them all and choose wisely.

Roggespierre

Impressions from the 2010 Indianapolis 500

2010-05-31T16:28:00.003-04:00

I awoke from a lengthy slumber this afternoon after driving 1,165.4 miles round-trip so that I could watch my 33rd consecutive Indianapolis 500 Mile Race in person. Once again, it was worth it.

I have long believed that the Indianapolis Motor Speedway is one of the world's premier managers of facilities and large-scale sporting events. This, too, was confirmed with the 94th running of the Memorial Day Classic.

Congratulations to Mari Hulman George, the IMS Board of Directors, and IMS CEO Jeff Belskus and his entire team. Whatever you might think of him - and I like him, by the way - Tony George also deserves credit. The facility has never looked better. Yes, he spent a lot of money, but he also did an outstanding job upgrading and maintaining the Speedway.

Impressions

The race was good but not great. In my opinion, it was more interesting than the 2009 version. The following facts, observations and opinions are listed in no particular order. They represent something of a data dump from my very tired cerebellum.

Your mileage may vary. In fact, I encourage you to submit your impressions in the comments section below.

The right driver won. Yes, Dario Franchitti might have benefited from the final yellow, but that is only because he was put in a precarious position by the previous yellow. Dario had the field covered all day long - no small task in contemporary IndyCar racing. Franchitti's win in 2007 might have been a fluke. This one most certainly was not.
Davey Hamilton is probably right. Tomas Scheckter is likely an idiot and a knucklehead. However, because I am a fan and not a driver, I love to watch Scheckter drive. The man drives with reckless abandon from the drop of the green flag. He is an old-style charger. His lack of patience has probably cost him more than a few potential victories, but he is worth the price of admission.
Speaking of admission prices, I bought a $90 ticket in E Stand (1st turn apex) for $60. I had plenty of wiggle room because the two seats next to me were unoccupied. While I appreciated the unanticipated level of comfort, I think it is safe to say that the series has much work to do with regards to increasing demand for the racing product.
The Moment of Silence in honor of those who lost their lives so that we might live free is always one of my favorite parts of the opening ceremonies. Unfortunately, I did not know when it occurred due to inexcusable technical problems. I also missed the first stanza of Taps, another one of my favorites, for the same reason. And I really felt sorry for Jewel, who reportedly had worked very hard in preparation for singing the National Anthem, who had to suffer through a malfunctioning microphone. I can attest that there is no worse feeling. Kudos to her for bravely sticking it out.
The transition to the recorded video segment in honor of Memorial Day does not work. It's an unnecessary road block in an otherwise moving ceremony. Please get rid of it. The speeches, songs and invocation have much more impact and should not be interrupted once they begin.
Track announcer Dave Calabro unintentionally caused multiple additional moments of silence at Sunday's race. These occurred during driver introductions, when he uttered the names Sebastian Saavedra, Takuma Sato, Mario Romancini, Bertrand Baguette, E.J. Viso, Hideki Mutoh and too many others.
Which team has the most fans? From the looks of the apparel at the race, it's clearly Andretti Autosport. Tony Kanaan is a Brazilian who has a very American story, and it shows. He has clearly established a fan base. Danica has fans, albeit fewer than she had when the month began. Still, it is clear that young ladies identify with her. Marco Andretti gear seemed to adorn lots of teenage boys and young men, many of whom undoubtedly would like to party with Marco and his entourage of attractive young women. I also noticed a lot of Ryan Hunter-Reay 37 IZOD gear, which was good to see. John Andretti received one of the loudest ovations in driver introductions. There is value in having LOCAL favorites in competition. This is true not only at Indy but also at every race in the series.
IZOD's sponsorship activation efforts were very good. The sponsor is definitely getting its money's worth. Given the product that it offers to fans, the series appears to be getting its money's worth, as well.
There are rumors of a possible team owners' revolt if Delta Wing is not selected to be the next generation of Indy car. Some believe that the fix is in for Dallara and that the ICONIC machinations are just for show. In my view, this is the Big Story of the summer in IndyCar.
Randy Bernard has made friends and earned respect for his willingness to listen and return phone calls. That might sound like small potatoes, but it should not be underestimated.
If Brian Barnhart wants Dallara or another manufacturer and the team owners want Delta Wing, then Randy Bernard is about to be significantly tested for the first time in his tenure. Good luck, Randy.
The existential question is making the rounds of the IRL administrative offices, the garage area and the media room. Specifically, people are asking one another, "Why does the IRL exist? What is it? What is its purpose? Is it a sanctioning body? Is it a marketing company? Is it (should it be) an event promoter?" These are good questions to ask. I'm glad that those in power are asking them. I will be interested to hear their answers in the coming months.

Again, I invite you to submit your impressions in the comments section. I will respond as frequently as possible.

Roggespierre

All-Time Indianapolis 500 Field - Alphabetical

2010-05-29T14:30:00.002-04:00

Mario Andretti
29 Starts - 1 Win (1969) - 5 Additional Top 5 Finishes - 3 Poles (1966, 1967, 1987) - 556 Laps Led

Michael Andretti
16 Starts - 0 Wins - 5 Top 5 Finishes - 0 Poles - 431 Laps Led

Billy Arnold
5 Starts - 1 Win (1930) - 0 Additional Top 5 Finishes - 1 Pole (1930) - 410 Laps Led

Jimmy Bryan
9 Starts - 1 Win (1958) - 2 Additional Top 5 Finishes - 0 Poles - 216 Laps Led

Helio Castroneves
10 Starts (Active) - 3 Wins (2001, 2002, 2009) - 3 Additional Top 5 Finishes - 4 Poles (2003, 2007, 2009, 2010) - 231 Laps Led

Jim Clark
5 Starts - 1 Win (1965) - 2 Additional Top 5 Finishes - 1 Pole (1964) - 298 Laps Led

Ralph DePalma
10 Starts - 1 Win (1915) - 2 Additional Top 5 Finishes - 2 Poles (1920, 1921) - 612 Laps Led

Emerson Fittipaldi
11 Starts - 2 Wins (1989, 1993) - 2 Additional Top 5 Finishes - 1 Pole (1990) - 505 Laps Led

A.J. Foyt
35 Starts - 4 Wins (1961, 1964, 1967, 1977) - 6 Additional Top 5 Finishes - 4 Poles (1965, 1969, 1974, 1975) - 555 Laps Led

Dario Franchitti
7 Starts - 2 Wins (2007, 2010) - 0 Additional Top 5 Finishes - 0 Poles - 255 Laps Led

Bill Holland
5 Starts - 1 Win (1949) - 3 Additional Top 5 Finishes - 0 Poles - 297 Laps Led

Ted Horn
10 Starts - 0 Wins - 9 Top 5 Finishes - 1 Pole (1947) - 94 Laps Led

Gordon Johncock
24 Starts - 2 Wins (1973, 1982) - 6 Additional Top 5 Finishes - 0 Poles - 339 Laps Led

Parnelli Jones
7 Starts - 1 Win (1963) - 1 Additional Top 5 Finish - 2 Poles (1962, 1963) - 492 Laps Led

Frank Lockhart
2 Starts - 1 Win (1926) - 0 Additional Top 5 Finishes - 1 Pole (1927) - 205 Laps Led

Arie Luyendyk
17 Starts - 2 Wins (1990, 1997) - 2 Additional Top 5 Finishes - 3 Poles (1993, 1997, 1999) - 188 Laps Led

Rex Mays
12 Starts - 0 Wins - 2 Top 5 Finishes - 4 Poles (1935, 1936, 1940, 1948) - 266 Laps Led

Rick Mears
15 Starts - 4 Wins (1979, 1984, 1988, 1991) - 5 Additional Top 5 Finishes - 6 Poles (1979, 1982, 1986, 1988, 1989, 1991) - 429 Laps Led

Louis Meyer
12 Starts - 3 Wins (1928, 1933, 1936) - 3 Additional Top 5 Finishes - 0 Poles - 332 Laps Led

Tommy Milton
8 Starts - 2 Wins (1921, 1923) - 2 Additional Top 5 Finishes - 1 Pole (1923) - 218 Laps Led

Jimmy Murphy
5 Starts - 1 Win (1922) - 3 Additional Top 5 Finishes - 2 Poles (1922, 1924) - 220 Laps Led

Jim Rathmann
14 Starts - 1 Win (1960) - 4 Additional Top 5 Finishes - 0 Poles - 153 Laps Led

Mauri Rose
16 Starts - 3 Wins (1941, 1947, 1948) - 4 Additional Top 5 Finishes - 1 Pole (1941) - 256 Laps Led

Johnny Rutherford
24 Starts - 3 Wins (1974, 1976, 1980) - 1 Additional Top 5 Finish - 3 Poles (1973, 1976, 1980) - 296 Laps Led

Wilbur Shaw
13 Starts - 3 Wins (1937, 1939, 1940) - 4 Additional Top 5 Finishes - 0 Poles - 508 Laps Led

Tom Sneva
18 Starts - 1 Win (1983) - 4 Additional Top 5 Finishes - 3 Poles (1977, 1978, 1984) - 208 Laps Led

Al Unser
27 Starts - 4 Wins (1970, 1971, 1978, 1987) - 9 Additional Top 5 Finishes - 1 Pole (1970) - 644 Laps Led

Al Unser, Jr.
19 Starts - 2 Wins (1992, 1994) - 5 Additional Top 5 Finishes - 1 Pole (1994) - 110 Laps Led

Bobby Unser
19 Starts - 3 Wins (1968, 1975, 1981) - 3 Additional Top 5 Finishes - 2 Poles (1972, 1981) - 480 Laps Led

Bill Vukovich
5 Starts - 2 Wins (1954, 1955) - 0 Additional Top 5 Finishes - 1 Pole (1953) - 485 Laps Led

Rodger Ward
15 Starts - 2 Wins (1959, 1962) - 4 Additional Top 5 Finishes - 0 Poles - 261 Laps Led

Dan Wheldon
8 Starts (Active) - 1 Win (2005) - 4 Additional Top 5 Finishes - 0 Poles - 234 Laps Led

2010 Indianapolis 500 - Wish You Were Here!

2010-05-28T19:00:00.001-04:00

A.J. Allmendinger

Alex Barron

Colin Braun

Patrick Carpentier

Bryan Clauson

Conor Daly

John Edwards

Jeff Gordon

Robby Gordon

Daniel Herrington

J.R. Hildebrand

Tracy Hines

Sam Hornish, Jr.

Kasey Kahne

Buddy Lazier

Jaques Lazier

Casey Mears

Juan Pablo Montoya

Robbie Pecorari

Buddy Rice

Joey Saldana

Scott Speed

Tony Stewart

Jonathan Summerton

Brad Sweet

Kevin Swindell

Paul Tracy

Josh Wise

J.J. Yeley

Bernard must shift gears to grow IndyCar

2010-05-28T11:49:00.016-04:00

Before I head to Indianapolis for my 33rd consecutive Indianapolis 500 Mile Race, I want to discuss the challenges that face new IndyCar CEO Randy Bernard.

Curt Cavin's in-depth discussion of Bernard in Friday's Indianapolis Star reignited my interest in this topic. As one might expect, the portrayal of Bernard is glowing. Bernard's past success with Professional Bull Riders has earned him the benefit of the doubt, not to mention a significant Honeymoon Period.

I do not take issue with that in any way. The man deserves credit for the good work that he has done. Furthermore, I am encouraged by his work ethic and his results.

PBR vs. IndyCar: a different brew

That said, with Professional Bull Riders, Bernard essentially created a business enterprise where there had not been one. Building something out of nothing is difficult, to be sure. However, working from a clean sheet of paper does provide some advantages.

Low cost basis
Little or no direct competition
Low expectations

Unfortunately, Bernard can look forward to enjoying exactly none of those advantages as he attempts to revive IndyCar, where...

The cost basis is exponentially greater than the value of the end product.
Direct competition abounds both nationally and internationally.
Perceptions of past success and the existence of successful firms in the motorsports space make for unreasonably high expectations among buyers and suppliers.

To summarize, Mr. Bernard is sure to discover - if he hasn't already - that Professional Bull Riders and IndyCar are very different animals.

PBR - NASCAR with Horns?

The good news is that Professional Bull Riders succeeded because Bernard effectively sold it to a quasi-mass market. This conclusion is supported by the types of sponsors - Wrangler, Jack Daniel's - that signed on. Thus, PBR would seem to be positioned similarly to NASCAR. Apparently, those folks still have time to watch something on TV in addition to Cup and Grand National. PBR's 2.4 rating with its NBC time buy further supports this conclusion.

One wonders, then, why Bernard would embrace a very different approach to marketing IndyCar.

Yes, the product is different. Then again, Bernard would seem to have authority to change the product in order to attract a large audience. Instead, it seems that he is attempting to create an entirely new breed of U.S. racing fan.

That - the Clamor for Glamour - shall be the topic of an upcoming post.

My next post, however, shall be one of longing.

Wish You Were Here - the 2010 Indianapolis 500 Edition - is forthcoming!

Roggespierre

Now THIS is Creative Promotion!!!

2010-05-26T18:50:00.004-04:00

Congratulations to Mark Dill, a personal acquaintance who happens to be the new marketing guru at the Indianapolis Motor Speedway.

Mark has a track record of success.

Check out this video and you'll see why!

Great job, Mark!

Fans Reject Izod IndyCar at Kansas

2010-05-01T14:39:00.007-04:00

I'm sorry. The headline is harsh but true.

What's more, today's horrid turnout at Kansas was entirely predictable.

The market is naturally segmented. Oval racing enthusiasts have rejected this product yet again. Is there any reason to believe that Chicagoland will be better?

IndyCar has been transformed into an international road racing product, one that has no business staging races at large oval facilities.

Good luck, Randy Bernard. Sadly, it seems that you're going to need a huge dose of it.

Bring on the (subsidized) Streets of Baltimore!

Roggespierre

Two IRL Advisory Board Reps Revealed

2010-03-30T21:29:00.008-04:00

This might be old news to some, but at least half of it is good news in my opinion.

The Republic has learned that the IRL Chassis Advisory Board - we shall avoid calling it the Looney Board - has at least two members signed, sealed and delivered.

The first is Eddie Gossage, President of Bruton Smith's Texas Motor Speedway. This makes perfect sense, not just because I suggested that either Smith or his emissary should be offered the race promoter's seat on the board, but also because TMS pays by far the steepest sanction fee of any race track or temporary circuit in the IndyCar Series.

That Gossage accepted IRL President Randy Bernard's offer is seen as nothing but good news in these quarters. Gossage sells tickets and corporate sponsorships more ably than any race promoter in North America. The IRL event at Texas continues to draw more race fans than any other IndyCar event, including those that enjoy millions in public subsidies.

You can like his tactics or not, but you must admit that Gossage is good at his job. Let's hope that those who want to turn IndyCar into the kind of series that has failed repeatedly in the U.S. marketplace will be willing to listen to someone who forgets more about marketing every day than they'll ever know.

The second appointment is more curious. I am a fan of Gentleman Gil de Ferran. He was an outstanding technical racing driver and a magnanimous Indianapolis 500 Champion.

The oddity is not that de Ferran was selected for a leadership role. He is a business-minded, intelligent man whose cool temperament will be appreciated by other members of the Advisory Board.

No, the strange thing is that de Ferran, the newly named president and managing partner of Luczo Dragon Racing, was chosen to represent the car owners. Because he is a "partner" in his racing team, we can assume that de Ferran is in fact a car owner. But we're left to wonder why his contemporaries selected one of the IRL's least experienced owners to represent them.

To that end, I have a theory, as you might have imagined.

Several IRL car owners are aligned with the various would-be chassis suppliers. Gil likely has no such conflict of interest. Perhaps even more important, he was not perceived to have had a conflict. In cases such as these, appearances are often at least as important as facts.

As a fan, I appreciate that de Ferran does not carry the baggage that some of his more seasoned IndyCar team owners must carry around. Is that sufficient to make up for inexperience?

My guess is that, given de Ferran's understated, cosmopolitan demeanor, yes, it probably is.

Best of luck to both men. The future of a once-great sport depends on them.

Roggespierre

IRL Advisory Board: Who and Why

2010-03-26T08:00:00.004-04:00

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.

Retired Air Force General William Looney (Chairman)
An undetermined league representative to be chosen by Bernard
An IRL team owner to be selected by his peers
A marketer/promoter to be picked by Bernard
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.

Roggespierre

Timeout to say Congratulations!

2010-03-25T21:17:00.002-04:00

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.

Roggespierre

IndyCar: The Task at Hand

2010-03-25T11:27:00.007-04:00

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
group."

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.

Roggespierre

Bernard Selects a Real Leader

2010-03-23T13:02:00.004-04:00

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.

Roggespierre

IndyCar Baguettes Bachelart a Financier

2010-03-22T19:35:00.004-04:00

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!

Roggespierre

The Irony of IndyCar

2010-03-20T16:02:00.003-04:00

I recently was referred to this article by Anthony Schoettle of the Indianapolis Business Journal. It is filled with delicious irony.

Derek Daly and Paul Tracy have championed an international, road racing direction for IndyCar racing for many years. Now, because Daly's son and Tracy himself are unable to land IRL rides, they are angry.

Derek and Paul will find no sympathy here. I have argued for some time that businesses can not have everything that they want. In this case, that means that the IRL can not have multiple road and street races, high-tech, high-cost equipment, and a solid base of American drivers.

I have explained in some detail here, here, here, here, here and here.

Graham Rahal lost his ride because McDonald's no longer has to fund NHL in order to procure salad dressing. He will not get another funded ride because the series is not designed to appeal to an American audience. Paul Tracy and Derek Daly's kid are no different.

Just ask the IMS ticket marketing chief, who quit this week.

This is a problem that will not be solved by a new car, delta wing or no delta wing.

Again, the problem is that IndyCar can not have everything that it wants.

Gentlemen, it is time to grow up.

Roggespierre

Tony George: he just faded away

2010-01-19T19:33:00.002-05:00

This might not be bad news, but it probably isn't good. Tony George is no longer a member of the Board of Directors of his family's company.

The entire press release is below. My commentary follows.

TONY GEORGE RESIGNS BOARD MEMBERSHIPS

OF INDIANAPOLIS MOTOR SPEEDWAY, HULMAN & COMPANY

INDIANAPOLIS, Tuesday, Jan. 19, 2010 - The Board of Directors of Hulman & Company and affiliated companies, including the Indianapolis Motor Speedway, has received the resignation of Anton H. "Tony" George from the board of directors effective immediately, according to Mari Hulman George, chairman.

"As members of his family, we are sorry to see Tony leave," said Mrs. George. "We are grateful for his service to our company as a board member and of course for formerly serving as CEO and president of our companies. I speak for our whole family in wishing him well.

"All of us had hoped that Tony would continue to serve on the board, and we made that clear to him. We are disappointed with his decision to step down despite our wishes."

His resignation removes George from any remaining role in Hulman & Company, Indianapolis Motor Speedway, Indy Racing League, IMS Productions and other affiliated companies. His term as CEO of the family companies ended June 30, 2009. He continues to be involved in racing through his ownership of Vision Racing, a competitor in the IZOD IndyCar Series of the Indy Racing League.

The board vacancy will be addressed at a later date. In addition to Mari Hulman George, board members include Nancy George, Josie George, Kathi George-Conforti and Jack Snyder.

Mari Hulman George said she is very pleased with the direction of the company and the progress that has been made during the last six months.

"Our company is healthy and is weathering the economic recession well," she said. "Jeff Belskus, president and CEO of the Indianapolis Motor Speedway, and Curt Brighton, president and CEO of Hulman & Company, are both doing excellent jobs in guiding our companies through this difficult time. Many hard decisions have been made, and now our companies are well positioned for the future."

I would be interested to know exactly why Mari believes that the IMS and IRL are so well positioned.

The IMS is going to be for sale before long. That's my prediction. That is not to say that the Hulman George Family intends to sell. I believe that the opposite is true.

Unfortunately, intentions mean very little in light of the gross incompetence that threatens this firm. Eventually, the family will have not choice but to sell. All that remains to be seen is 1) how soon, and 2) for how little.

Roggespierre

Thought to begin Indy Idea 2010

2010-01-09T00:30:00.002-05:00

Happy New Year!

I am pleased to report that I am refreshed and ready to resume the work of The Indy Idea. It is best, I think, that I ease back in to the blogosphere with a quote. I shall leave it to readers to interpret its relevance with regards to the state of contemporary IndyCar racing.

These words were spoken by former Boston Red Sox executive Bill James and reported by Michael MacCambridge in his book, America's Game.

"Baseball in 1960 was run by people who loved baseball, but it was run by people who, because they loved baseball so much, assumed that there was something 'special' about baseball which had propelled it to a predominant position in the American sports world. And because they made this assumption, they allowed the game to drift. They didn't really think about the game as a commercial product; they still don't."

Sound familiar? James continued.

"Pete Rozelle, Lamar Hunt, George Halas and the other people who ran pro football had serious disagreements among themselves, but they all assumed that they had both the right and the responsibility to shape football into the best possible commercial product that could be built upon the framework of the game. If the games were boring, they assumed it was their responsibility to make them more exciting. If the games were too long, they assumed it was their responsibility to trim the fat."

I encourage everyone to keep these words in mind as we recommence the New Day Rising Project. The idea is to transform IndyCar into the best possible commercial product that can be built upon the framework of the racing.

Roggespierre

Great Book for Christmas

2009-12-25T11:30:00.000-05:00

Merry Christmas from the Indy Idea.

My favorite gift that I received this morning is the book, "More than a Game," by Michael MacCambridge. The author tells the story of pro football's rapid ascent to Number One among U.S. spectator sports.

Everyone who makes decisions for the Indy Racing League should be required to read this book. The rise of the NFL in the television era was no accident. The process was planned and managed by the great commissioner, Pete Rozelle.

I'll stop there because Little Roggespierre is requesting that I put batteries in his new R-C Hot Wheels Team 7-Eleven Indy car.

Roggespierre

Comcast to take control of NBC Universal

2009-12-03T09:45:00.002-05:00

The worst kept secret in media M&A is finally confirmed. Comcast will purchase a majority stake in NBC Universal.

This is very good news for the IRL because it virtually ensures that Versus will be carried everywhere and by everyone (including DirecTV). Comcast will bundle Versus with more popular cable networks such as USA, CNBC and MSNBC. DirecTV can not seriously consider removing those channels from its lineup. Therefore, it will be forced not only to carry Versus, but also to assign the IRL's fledgling cable partner a decent channel number.

Translation: Comcast is prepared to spend $13.75 billion in order to acquire bargaining power with regards to negotiations with its customers and suppliers. Conversely, the IRL is preparing to select yet another single IndyCar chassis, thereby forfeiting its own bargaining power and that of its teams. The IRL will likely make the same mistake with regards to engine selection.

The IRL could learn something from its television partner. Regrettably, history suggests strongly that it will not.

Roggespierre

Edmonton IndyCar event loses $3.9 million

2009-11-30T20:00:00.002-05:00

This can not bode well for temporary racing circuits in the IndyCar Series. According to the CBC, the 2009 Rexall Edmonton Indy lost $3.9 million. The good news is that this is an improvement compared with 2008, when the Edmonton IndyCar event lost $5.2 million.

For those who are keeping score, that's $9.1 million in government funds that have been flushed down the toilet in just two years. If IndyCar were to attract a substantial television audience, then the money might be justified as an investment.

Unfortunately, that is not the case. The Edmonton Indy earned a 0.4 cable rating on ESPN in 2008 and a .24 cable rating on Versus in 2009.

U.S. television viewers have spoken. There is very little demand for this event.

The math is not difficult. The municipal and provincial governments have backstopped $9.1 million in exchange for a grand total of approximately 700,000 U.S. television viewers over two years. That's $13 per viewer.

If Edmonton were a profit-seeking enterprise, then it would have no choice but to follow Richmond out the door. When the contract expires following the 2010 Edmonton Indy, I suspect that we should anticipate the same conclusion.

Roggespierre

Lack of U.S. Stars Killing Indy Event

2009-11-30T09:00:00.001-05:00

The problem is not unique to IndyCar racing.

Mark Ambrogi of the Indianapolis Star reports that the city will likely lose its professional tennis tournament. Declining crowds, a dearth of sponsorship, and little hope for a television deal are the proximate causes.

But the real culprit is a lack of star U.S. competitors.

I vividly recall attending this event when it was the U.S. Clay Court Championships. I joined thousands of fans that crowded their way into an outer court to watch Jimmy Connors take on a brash but promising young American, John McEnroe.

Unfortunately, history alone can not sustain the event. Middle American tennis fans have determined that the present-day value proposition is irrelevant.

The two most recent champions of the Indianapolis Event are Gilles Simon and Robby Ginepri. Apparently, fans greeted these undoubtedly highly skilled competitors with a collective shrug.

Sound familiar?

The not-for-profit promoter of the Indianapolis tennis tournament is powerless to affect change. The same can not be said for IRL Management. It has chosen to abandon the non-technical aspects of product development.

The IMS Board and its chosen managers will have only themselves to blame both if and when a similar story is written about another once-great institution.

Roggespierre

IndyCar's Griffin takes own head

2009-11-23T20:58:00.001-05:00

The Indy Racing League has lost another experienced, talented professional. It appears as if Public Relations Chief John Griffin decided to take his talents elsewhere.

Who can blame him, given that his boss effectively called Griffin out for failing to promote the IRL's roster of unwanted "stars". Never mind that Angstadt, Barnhart and Cotman gave Griffin Goulash and expected him to compete with cheeseburgers for sales to U.S. racing fans.

Public Relations can not make people like the food. And John Griffin did not forget how to do his job when he left NASCAR to work for the IRL.

I like and respect John Griffin. He did his job well. It is regrettable that his bosses did not and do not understand exactly what that job entails (and what it does not).

The not-so-widely released press release is below in blue.

Roggespierre

For Immediate Release

GRIFFIN STEPS DOWN FROM INDY RACING LEAGUE

INDIANAPOLIS (Nov. 20, 2009) - Indy Racing League Vice President of Public Relations John Griffin has submitted his resignation, effective Dec. 18.

"John has been a valued part of our organization and he will be missed," said Terry Angstadt, president of the commercial division of the Indy Racing League. "His creativity and passion for the sport brought publicity for the IZOD IndyCar Series to a whole new level. We wish him the best of luck."

Griffin joined the Indy Racing League as vice president in 2002, overseeing all aspects of the IZOD IndyCar Series and Firestone Indy Lights public and media relations program as well as strategic communication. During his tenure, Griffin developed and implemented public relations strategies for several historic events including the unification of open-wheel racing, Danica Patrick's first win and the series IZOD entitlement announcement earlier this month.

"I appreciate my time here at the Indy Racing League where I have made many great friends and want to thank Terry (Angstadt) and Brian (Barnhart) for the opportunity," said Griffin. "I really think the time is right for me to entertain a new challenge, particularly something that would allow me more quality time with my kids."

Before joining the Indy Racing League, Griffin worked for NASCAR with his professional career also including stops with World Cup USA 1994 and the Major Indoor Soccer League.

A replacement for Griffin has not been selected.

GEICO gets hip to Versus

2009-11-21T20:24:00.005-05:00

Back in mid-season, Paul Tracy told Robin Miller that GEICO was not hip to Versus.

Apparently, the truth is that GEICO is not hip to the IRL on Versus. When the cable carrier has programming that its exclusively U.S.-based audience wants to watch, then GEICO is very hip to Versus.

Case in point: Versus is televising The Big Game - Cal at Stanford - tonight. Promos throughout the first half have encouraged college football viewers to stick around for the GEICO Halftime Show.

Roggespierre

Cryptic IMS Leaks are Cause for IndyCar Concern

2009-11-17T19:00:00.001-05:00

The headline atop the latest motorsports entry by enigmatic Indianapolis Business Journal blogger Anthony Schoettle is ominous.

Speedway CEO about the get down and dirty

Apparently, laying off more than 13 percent of its staff was only the beginning of budget cuts at the Indianapolis Motor Speedway. It seems that CEO Jeff Belskus has hinted to Schoettle that additional and, perhaps, more substantial cuts are in the pipeline.

Schoettle indicates that both the Brickyard 400 and the MotoGP race are potential casualties. Not surprisingly, he also suggests that the Month of May could be primed for a haircut.

Not a TEAM Player?

Most important to IndyCar Series fans, Belskus is apparently considering either reducing IndyCar TEAM payments or scuttling the appearance money program altogether. Schoettle also mentioned that Belskus might alter the IndyCar Series schedule, focusing on more profitable (read: publicly subsidized) road and street races in lieu of oval tracks.

In my view, that these items are under consideration demonstrates the severity of the financial difficulties that imperil this unwanted product. Belskus is reputed to be a fine accountant. I do not doubt his qualifications with regards to reshaping the projected 2010 IMS Income Statement.

The question is whether or not he is capable of making strategically advantageous decisions. For example, if Belskus were to reconfigure the ridiculously wasteful IndyCar TEAM program, then I would be the first to applaud his efforts. Similarly, I would not shed a tear upon learning that the Brickyard 400 and the MotoGP race are not part of the long-term IMS operating strategy.

Shortening the Month of May would be a mistake, in my assessment. The 500 is a declining event by any objective measure. Whittling away at its edges would not create efficiency, but rather it would only hasten the event's plunge toward irrelevance and, ultimately, annihilation.

Conversely, ending the non-IndyCar escapades at Indianapolis might just make trips to the IMS seem special again. Re-establishing scarcity could be a first step toward restoring the mystique of the Greatest Race in the World.

I will likely have much more to say whenever Belskus chooses to take definitive action. For now, there is a specter that hangs over the hallowed ground of the World's Greatest Race Course. Is Belskus a workouts and turnarounds guy, or is he merely a manager of the downward spiral.

We shall soon know the answer.

Roggespierre

IndyCar Product Development Map

2009-11-17T09:04:00.001-05:00

Several contributors have suggested that I provide a visual aid that maps where we are and where we are going with regards to IndyCar Product Development.

Drafting the document was not difficult. Figuring out how and where to post it so that everyone can see it was more challenging. Fortunately, BC has provided the space and posted it at the link below.

New Day Rising: IndyCar Product Development

I encourage everyone to review it, read the text, and provide commentary.

Along the way, please keep in mind the following stipulations.

1. The IndyCar Product shall consist of all rules and technical specifications.
2. The number of possible Product Attributes is at present undetermined and unlimited.
3. Each Customer Job to get Done will correspond with at least one of the Core Benefits that we have already established. I imagine that several Jobs will correspond with more than one Core Benefit.

My preference is that we work now to determine some core Customer Jobs to get Done and link them to the appropriate Core Benefits.

We shall then begin to develop Product Attributes that shall provide those Core Benefits that enable Customers to get those jobs done.

As always, I welcome your suggestions.

Thanks again to BC for solving the technical challenges.

Roggespierre

IndyCar Supply Chain Follies

2009-11-12T10:00:00.000-05:00

IndyCar fans and journalists appear to be hopeful that Tony Cotman will solve many of the problems that imperil the IndyCar Series. Regrettably, the evidence suggests otherwise.

Like Brian Barnhart, Cotman is apparently determined to dictate the IndyCar supply chain from above. Supporting evidence is provided by Marshall Pruett at SpeedTV.com.

Supply Chain Economics

The practice of dictating the supply chain is one that has to go. Tony George did this initially to ensure that the IRL would have sufficient supply in 1997. It was a short-term solution that somehow became a long-term policy. Cotman then adopted it when he oversaw development of the DP01 for ChampCar. So it would seem that the decision-makers at the IRL now share a bias in favor of micromanaging the supply chain. This is a huge mistake, in my view.

An efficient supply chain must develop organically. Vendors must compete to maximize quality and minimize cost. Teams must be allowed to manage their own product life cycles and spend what they determine they can afford.

When a single vendor is chosen and a maximum price is dictated, that price becomes the effective minimum price because there is no market competition. Costs are artificially increased and an unnatural barrier to prospective new entrants is created. This practice also increases the amount of compensation that the league must provide to teams in order to ensure that enough of them show up to race.

Dictating the supply chain is costing the IRL millions each year, in my view. The decision that Barnhart and Cotman are about the make will certainly cost the IMS more than Ron Green ever did. It is interesting that a sole-source supply chain likely makes technical enforcement much easier than it would be if teams were to choose from multiple options offered by an unlimited number of vendors. Perhaps this is coincidence.

A Better Way

Barnhart and Cotman should be in the business of telling the teams what they may not do. Technical rules are best when they are composed of constraints that evolve in correlation with technologies and economies. Right now IRL management is picking economic winners and losers. This creates gross inefficiencies throughout the IndyCar economic universe.

Recall the USSR. It didn't work there, either.

For example, an economist would not be surprised to learn that the 2010 Honda engine lease is ridiculously overpriced. After all, without Honda, there would be no supply of IndyCar engines. The IRL has therefore surrendered all of its bargaining power to Honda.

In addition, the lease price that is incurred by the teams includes the St. Pete Tax, the Toronto Tax, and the Mid-Ohio Tax. Therefore, the teams and the IRL, via IndyCar TEAM, are sponsoring those three races. That the money is laundered (legally) through Honda does not change the ultimate direction of the cash flows.

Thus, we can conclude that much of the cost of IRL engines in 2010 will have absolutely zero to do with engines. Such is the cost of incompetent management.

Microeconomics 101

Establishing a middle ground between open competition and managed competition is undoubtedly difficult. But I would argue that IndyCar's core economic problems are far more elementary and not at all exclusive to the business of racing. Unfortunately, it seems that the IRL lacks managers who understand basic microeconomics well enough to devise a cost-effective solution.

The lack of sufficiently sophisticated strategic managers is costing good and loyal people their jobs at the World's Greatest Race Course.

The Indianapolis Motor Speedway Board of Directors can and must do better.

Roggespierre

IndyCar: Heads still Rolling at IMS

2009-11-11T18:00:00.004-05:00

A good person and employee has been deemed expendable by the Indianapolis Motor Speedway Corporation.

According to Curt Cavin of the Indianapolis Star, IMS Director of Public Relations Ron Green was one of several staffers who lost their jobs Tuesday.

In a previous life, I worked directly with Ron Green on many occasions. He was always professional and accommodating. Like me, Green was then a true believer in the Indianapolis Motor Speedway in its past, present and future permutations.

His ouster leaves me sad and angry. Ron Green did his job well. The same can not be said of those who make strategic business decisions at the IMS and IRL offices.

I remind you that this is an organization that has demonstrated zero understanding of the differences between media relations and promotions, corporate sales and product marketing, supply chain management and product development.

Fred Nation, Green's former supervisor at the IMS, issued a statement in which he predictably blamed the economy for the latest round of layoffs.

I consider Fred a friend. In this case, he is wrong. Green and the others lost their jobs because they happen to have worked for a company that is very poorly managed. They are paying the price for decisions that were made by others.

Barring significant and unanticipated upgrades in management talent at the IMS and IRL, Green and his cohorts will certainly not be the last to go.

Green's dismissal reminds us of the reality that has befallen IndyCar racing. Masquerading an intellectual property licensing agreement as Title Sponsorship does not change that reality.

Roggespierre

Core Benefit: Community

2009-11-11T09:30:00.000-05:00

Our final proposed Core Benefit to Customers is that of Community. In many ways, it is derived from the Core Benefits that have already been discussed: Aggrandizement, Intrigue, Thrill, and Affirmation.

There are many types of communities. They can be either formal or informal. All are based on something that is shared: location, socioeconomic status, occupation, security, faith, race, ethnicity, language, age. Often, sub-communities emerge from within larger communities.

For those who are interested, I will suggest reading the following staples of MBA level analysis of what academics have called "collective action" and "spontaneous sociability".

Mancur Olson: "The Logic of Collective Action"

Robert Putnam: "Bowling Alone: The Collapse and Revival of American Community"

IndyCar Community

It would seem that the IndyCar Community, writ large, should be a spontaneous and voluntary association that is based on the shared interests of those who choose to participate. There is no default membership requirement such as race, ethnicity, and socioeconomic status.

Therefore, people join the IndyCar Community for its own sake. This can be both good and bad for the marketers who make product development decisions.

That's us, by the way.

Roggespierre

Core Benefit: Affirmation

2009-11-05T09:45:00.002-05:00

People like it when their beliefs and opinions are proven to be correct. You don't have to be a horse to want to be Affirmed.

In my opinion, Affirmation is the Core Benefit that accounts for much of NASCAR's rise in the marketplace. NASCAR focused on attracting fans who typically believed that certain things were good and right.

1. Southern Regionalism
2. Rural Lifestyles
3. Working Class Values
4. White People

The last of these is controversial. However, I continue to believe that a segregated marketplace is central to NASCAR's marketability.

Incidentally, I do not propose that IndyCar copy the NASCAR model. That particular market segment has a product that it likes, namely NASCAR Cup.

In addition, I think that NASCAR has strayed from its core Affirmations and that its departure has led to a decline in popularity. One could argue that NASCAR traded Southern Regionalism and Rural Lifestyles for Nationalism. It forfeited Working Class Values and became primarily an exercise in product marketing and corporate sales. NASCAR drivers have been transformed from Working Class Heroes into Product Hucksters.

The values that a product Affirms must remain consistent. The prospect of growth can tempt organizations into sacrificing their founding Affirmations. This is a monumental mistake.

IndyCar Affirmations

I would like to see IndyCar build on the traditional Affirmations of the Indy 500.

1. Entrepreneurship
2. Independence
3. Progress
4. Automotive Leadership

These are not slogans. They are demonstrable activities.

They draw from traditions that were established and sustained by Carl Fisher, the rearview mirror, the Duesenberg Brothers, the Straight 8, Tony Hulman, Harry Miller, the Offenhauser and A.J. Watson. They allow for participation by both Roger Penske and Roger Rager, the super-secret Mercedes Ilmor and the converted school bus engine.

Fans therefore have reasons for their fandom. They have interesting stories to tell. Better yet, those stories provide confirmation of widely held values and Affirmation to those who believe in those values. That kind of promotion can not be bought.

I welcome your thoughts.

Roggespierre

IZOD IndyCar Series Announcement Thursday

2009-11-03T15:30:00.002-05:00

*See New Info in Red Below*

The Indy Racing League will announce Thursday that IZOD has stepped up to become title sponsor of the IndyCar Series. Curt Cavin of the Indianapolis Star first reported the story in Gannett sister publication USA Today.

Cavin reports that the "asking price" was $10 million per season for a duration of at least five seasons. It is interesting that the money will be distributed to:

1. The IRL

2. IndyCar television partners

3. IZOD's activation campaign

Terry Angstadt should be congratulated. He is indeed a fine salesman.

The question that I would askis this: how much of this is "new money"? IZOD already had a multi-year deal in place with the IRL. We can probably assume that some of the new money came from IZOD's reduced payment for 2010 naming rights of the former Continental Airlines Arena in New Jersey. The New Jersey Nets will move out of that facility in the near future.

Roggespierre

Core Benefit: Thrill

2009-11-03T14:25:00.001-05:00

At its best, auto racing is the more thrilling than any other sport. It features a unique combination of sights and sounds. There is no halftime; racing is perpetual motion.

How best to craft a racing product that attracts fans? Visitors and contributors here are fully qualified to answer that question.

What are the most aspects of racing that you find most thrilling? I ask that you be mindful of the nature of this phenomenon. To be thrilled is not a long-term state of being. It is emotional and fleeting. I shall provide an example.

For me, the greatest thrill in racing was always the start of the Indianapolis 500. Unfortunately, race control has seen fit to allow the field to scatter prior to the green flag in recent years. Much of the thrill has therefore been extracted in the name of safety. As a fan, I would like to see the field aligned in eleven rows of three when it takes the green. Perhaps other variables might be adjusted if safety is in fact a legitimate issue.

I invite you to share the elements of IndyCar that might thrill you.

Roggespierre

Core Benefit: Intrigue

2009-11-02T15:00:00.000-05:00

We have established that Aggrandizement shall be one of the Core Benefits that IndyCar affords its customers. It is clear that hashing out the details will require significant time and effort. However, I think that we all generally agree that IndyCar customers should be made to feel as if they are superior to other groups.

And so we move on.

The second Core Benefit that I have proposed is that of Intrigue. Some notions that might fit within this category include the following.

Anticipation
Innovation
Suspense

When I think of Intrigue, I think of that which is either new or unknown.

I welcome your thoughts on this Core Benefit.

Roggespierre

Core Benefit: Customer Aggrandizement

2009-10-29T18:30:00.001-04:00

The need to feel important is universal. When it is satisfied via rational and healthy means, it is called self-esteem. But sports fandom is inherently irrational. There is no evidence to suggest that the success of favored teams and competitors is in any way correlated with the relative social desirability of their fans.

Social psychologists refer to self-aggrandizement as illusory superiority, a distorted opinion of one's social standing.

I happen to be a fan of the Indianapolis Colts. If the Colts should win the Super Bowl this season, then I will likely feel a sense of aggrandizement, as if I had something to do with the team's achievement. The illusion is one that I will be happy to indulge. The academic literature suggests that I am not alone.

The Jersey Effect

Don't bother looking up the name of this particular affliction; I made it up.

The Jersey Effect is the term that I use to describe the inherent marketing advantage that is enjoyed by sports in which the participants represent either a community or an institution.

For example, I do not identify myself as an NFL fan, but rather as an Indianapolis Colts fan. The NFL does not have to compete for my allegiance because it is effectively an economic cartel, a monopolistic Not-for-Profit institution that operates for the benefit of its 32 member franchises. Economists have reached the same conclusion regarding Major League Baseball, the NBA, the NHL, and the NCAA.

Fans of sports that are sanctioned by those organizations tend to be devoted to a single member franchise or institution. They identify not with the economic institution, but rather with the Jersey of a single competitive entity. These fans are aggrandized when the guys (or gals) in their favorite jersey are successful.

In my opinion, there is but one example of The Jersey Effect in all of motorsports. That, of course, is the Prancing Horse of Scuderia Ferrari. A good number of Formula 1 fans are in fact Ferrari fans. That the vast majority of those fans will never own a Ferrari is evidence of the inherent irrationality of their fandom. Ferraris are the fast and sexy trophies of the elite. Scuderia Ferrari therefore offers the many who are not elite a parasocial connection to the few who are.

Of course the connection is an illusion. But that does not make it any less real to those who choose to indulge themselves.

The Sanctioning Body Effect

Citizen John provided a comment in this space some time ago that really got me thinking. He noted that U.S. auto racing fans have traditionally demonstrated a strange and disproportionately strong connection to one sanctioning body or another. Having given the matter much thought, I tend to agree.

Might it be that the Sanctioning Body Effect is to racing what The Jersey Effect is to other sports? Is this the foundation upon which fans base their self-aggrandizement? I believe that a very compelling case can be made.

NASCAR
It's where the Big Boys race. NASCAR Fan is cool because his sanctioning body is by far the most popular in the United States. It's where all of the best American drivers go to prove themselves. The cars are heavy, have skinny tires, and are difficult to drive. It's macho and nostalgic. The fact that the fancy-shmancy folks in New York and San Francisco don't like it is only further proof that it's the best.

ALMS
It's only for the smart, sophisticated and successful. ALMS Fan is cool because he likes what the socioeconomic winners like. NASCAR is the WWE and Wal-Mart. ALMS is the PGA and Saks. The cars are expensive, technologically advanced, and they race on road and street courses. Some events are even in major cities. It's for the hip, urban and successful. The fact that ALMS has a very small fan base is only further proof that it is superior. You can't be better than the crowd if you are the crowd, you know?

The IRL Effect

If there is such a thing as The IRL Effect, then we can say with certainty that it is not a source of aggrandizement. NASCAR has the best and most popular U.S. drivers and teams. Formula 1 has the best and most popular international drivers and teams. The cars are neither technologically interesting nor particularly difficult to drive. They are also essentially the same, the lone exception being that cars that are better financed are consistently faster than the others. The series appears to race wherever it can collect a check that is large enough to cover its costs. IndyCar is a relic, a once mighty warship that was decommissioned long ago.

The IRL Customer is aggrandized only at the Indianapolis 500, a storied institution that has managed to retain some luster despite its obvious decline in popularity. The market has made clear that the season championship is irrelevant. The few who continue to follow the sport do so primarily because they continue to associate themselves with the perception of a glorious past.

Aggrandizement: Core Benefit and Job to Get Done

IndyCar must become a source of aggrandizement to those who follow it. Watching an IndyCar race must indicate something - something that is irrationally great and desirable - about those who choose to either attend or watch on television. Every human being wants to feel that he or she is better than others. IndyCar needs to help some of them get that job done.

We should note that, although it is true the hunger for aggrandizement is universal, it is also true that not all people are satisfied by the same foods. Therefore, IndyCar must choose. It can not be everything to everyone, but it must be something to someone. Serving one market will likely require that we not serve others.

IndyCar must assist customers with the job of self-aggrandizement. It must give them reason to feel bigger, more important, and superior in some way. But how?

Which product attributes will help IndyCar customers get the job of self-aggrandizement done?

I look forward to reading your comments.

Roggespierre

A Proposition of IndyCar Racing Core Benefits

2009-10-28T22:00:00.000-04:00

"Our sports heroes are our warriors. This is not some light diversion to be enjoyed for its inherent grace and harmony. The self is centrally involved in the outcome of the event. Whoever you root for represents you."

Those words were spoken by Arizona State University Professor of Marketing and Psychology Robert Cialdini, a research pioneer in the field of sports fandom. You can read the entire New York Times article here.

Spectating is a discretionary activity that fans elect to do in lieu of many other entertainment alternatives. Consumers are permitted to indulge all of their biases, prejudices, insecurities, and fantasies when they choose to become fans. They can choose the sports, teams, competitors, and events that appeal to them. In other words, fans are permitted to have their reasons and to keep them to themselves.

Those reasons are what we call Core Benefits. I have adapted the prospective Core Benefits below from definitions provided by Dictionary.com. I believe that these are the kinds of "Jobs" that IndyCar must empower its customers to get done.

Prospective IndyCar Jobs

Aggrandize - to make the individual feel greater in power, wealth, rank or honor

Intrigue - to arouse curiosity or interest of the individual via unusual, new, or otherwise fascinating or compelling qualities; appeal strongly to; captivate

Thrill - to cause a sudden wave of heightened emotion or excitement, as to produce a tremor or tingling sensation through the body

Affirm or Validate - to substantiate or confirm an individual's belief that something is true, good, important, and morally right

Participate and/or Belong - to take part or share, as with other like-minded individuals

I believe that these words encompass most if not all of our previous suggestions. I have intentionally chosen words that are deeply personal. Choosing one activity rather than another is, after all, a personal choice. Again, people have their reasons. Frequently, they have something to do with at least one of the definitions above.

As always, I invite and encourage you to submit your thoughts, opinions and constructive criticisms.

Roggespierre

Defining the Core IndyCar Product

2009-10-27T18:10:00.011-04:00

Frequent visitors to this site tend to be serious about IndyCar racing. One might imagine that we have a solid understanding of the core benefits that consumers can and should expect to extract from the IndyCar product.

Perhaps, like me, you are more than a little surprised by the difficulty of the task.

Entertainment

Several posters have suggested that "entertainment" is one of the primary jobs that IndyCar consumers are trying to get done. I tend to agree.

However, channeling my inner Socrates, I then ask myself: What is entertainment? Is entertainment really a job? Would we not be more accurate if we were to determine that entertainment is a category that encompasses many different and highly variable jobs that consumers are trying to get done?

The following definitions are from Dictionary.com.

Entertainment - 1. the act of entertaining; agreeable occupation of the mind; diversion; amusement. 2. something affording pleasure, diversion, or amusement, especially a performance of some kind.

I did not find these definitions to be particularly helpful. Once again, we are dealing with proximate categories, namely diversion, amusement, and pleasure. Our task requires more granularity.

The Law recognizes the differences between proximate causes and direct causes. We should do so, as well.

First, we must identify core "jobs" that enable us to be diverted, amused and pleased. Then, we can determine which of those "jobs" IndyCar might enable its customers to accomplish.

Daredevil Drivers & Harrowing Escapes

For example, prewar Indy competitors were promoted as "Daredevil Drivers." The notion of overcoming perceived physical limitations and danger was a strong driver of "entertainment" at that time

Frank Lockhart, the 1926 Indianapolis 500 winner, is considered by many to have been the dominant U.S. racing driver of his era. The preeminent escape artist of the same era was Harry Houdini. Might these two heroes of the Roaring 20s have been popular for similar reasons? I will argue that, indeed, they were.

Both were confessed mere mortals who appeared to have mastered the complex machines of their time. Neither Lockhart nor Houdini claimed to possess any mystical power to manipulate nature. They amazed and astonished consumers because they were ordinary men appeared to cheat death as a matter of course.

The Jobs

It is clear that both Frank Lockhart and Harry Houdini successfully "entertained" their customers. The relevant question, then, is: What were the "jobs" that Lockhart and Houdini enabled consumers to accomplish?

I believe that the answers to this question are very important. The Spectator Sports Industry was in its nascent stages in the 1920s and 30s. Houdini was a throwback, a legacy act that was derived from traveling circuses, minstrel shows and religious revivalism.

Conversely, racing, boxing and baseball were just beginning to replace those types of acts as staples of the spectator-supported events industry. AM radio, the disruptive mass communications technology of the era, unleashed abundant pent-up demand for entertainment that was based on athletic and sporting competition. In 1939, the NCAA, heretofore a small rule-making committee for intercollegiate athletics, entered the event promotion business with its inaugural men's basketball National Championship.

Level of Analysis

This is the type of analysis that I believe we must produce. We must ask "what" and "why" - the two interrogative forms that can not be answered with a yes or a no. The challenge is daunting.

And, so, we begin.

What do we mean when we say that IndyCar must "entertain" its customers?

I look forward to reading your answers.

Roggespierre

Wheldon back with Panther Racing in 2010

2009-10-27T08:49:00.004-04:00

According to Curt Cavin of the Indianapolis Star, 2005 Indianapolis 500 winner Dan Wheldon will return to Panther Racing in 2010.

The Englishman, a former IndyCar Series champion, and the team led by John Barnes will join forces once again despite having had a very disappointing 2009 season. Their undisputed highlight together came at Indianapolis, where they finished second to Helio Castroneves and Team Penske.

Wheldon had hinted that he would be exploring other options for 2010. However, fans should recall that IndyCar is a sport in which teams generate approximately $.25 of market value for every $1.00 of operating costs incurred. It is therefore likely that Wheldon's other options were in fact slim and none.

IndyCar: The Core Product

2009-10-26T11:37:00.008-04:00

Understanding the core product of IndyCar racing is paramount if we are to determine parameters of the whole product.

A marketing professor at the University of Delaware was kind enough to post some helpful class notes on the web. They include a succinct explanation of how to determine the core product that corresponds with our guiding Maxim - jobs that customers want to get done.

Core Product - marketers must first define the core BENEFITS that the product will provide to the customer.

Therefore, the Core Product (or service) is that which generates the core benefits that enable customers to complete the jobs that they want to get done.

Our Task

We need to brainstorm.

I ask that readers and contributors submit two lists.

Elements of the IndyCar product that generate core benefits to customers.

Jobs that those elements enable customers to get done.

Those who are new to this process are advised to read IndyCar Maxim #4. In addition, I have discussed the "jobs" approach to product development in this entry.

Please submit your lists in the comments section below. I will then organize them and bring them to the top of the next post so that we might give them all due consideration before we make our initial selections.

Roggespierre

IndyCar Marketing: Jobs of the Whole Product

2009-10-23T19:15:00.000-04:00

This is an important crossroads in the New Day Rising Project for IndyCar racing. We are ready to commence discussion of our Marketing Plan. My purpose in writing this article is to provide a framework within which we might consider the issues regarding Product, Place, Price and Promotion.

In addition to the 4 Ps model, I plan to use "whole product" and "jobs-based" approaches to Product Development, Channel (Place) Selection, Pricing Considerations, and Promotional Strategy.

The Whole Product Concept

This Whole Product approach to product development is the brainchild of technology marketing guru Regis McKenna.

Recall the days when personal computers were little more than glorified word processors. That core product - the PC - remains today much as it was back then, albeit with increased and accelerated processing capabilities.

The early PC was disruptive technology insofar as it effectively eliminated the market for electric typewriters. Some suspected that handheld calculators might also be threatened. But that, really, was it.

Connectivity proved to be far more disruptive. Networked PCs provide a good example of a whole product. They would not be possible if not for the core product, the personal computer. But they are much more than mere word processors and calculators.

Connected PCs have disrupted myriad industries: travel agents, television networks, newspapers, bookstores, photo film manufacturers, and many more. Networked PCs continue to disrupt new and diverse markets because they afford consumers and businesses an ever expanding range of attributes and capabilities.

The whole product is the sum of all of those product attributes that increase the value that accrues to customers.

Product "Jobs"

This concept originated with Professor Clayton Christensen of Harvard Business School. It is the subject of my IndyCar Maxim #4. Let us again use the PC as our example.

Previously, we recalled that early PCs were little more than word processors and calculators. Think of all of the "jobs" that we can "get done" today, thanks to the whole product that is the networked personal computer. Think of the various industries that have been disrupted - music and video retailers, photo finishers, pornography publishers, the U.S. Post Office - because a better alternative is now available via the PC.

The PC whole product empowers users to get lots of jobs done.

IndyCar: Trade offs Required

Selecting the optimal combination of attributes for incorporation into the IndyCar racing whole product is paramount to our task. It is also likely to be a challenging and, at times, frustrating proposition.

The PC is fairly thought to be a Utopian whole product because it is capable of doing different jobs for different users at different times. For example, it is entirely conceivable that one PC might be used as a substitute for both Hustler magazine and the land line phone that the kids used to call Grandma. However, that PC is unlikely to be used for both "jobs" at the same time. Personal computers offer users a flexible, either/or job orientation.

The IRL is not so fortunate. Racing is temporal - it must occur at specific times and in specific places. Years ago, one might not have been surprised to see Grandma sitting next to a guy reading Hustler at the Indianapolis 500. But those days have gradually faded away as consumers of all types have been afforded more and better alternatives. Such is the nature of market competition in the digital age.

Therefore, we must: 1) identify an attractive market, 2) determine the jobs that individuals in that market want to get done and 3) develop an IndyCar whole product that is unequaled with regards to helping customers get those jobs done.

Market selection is Job #1. Our target market will have little to do with demographic categories. Instead, we shall seek individuals who are looking to get the similar "jobs" done.

Roggespierre

Marlboro Tix Nix: Another Drag on IndyCar

2009-10-23T12:30:00.002-04:00

Perhaps we now know why Richmond is not on the 2010 IndyCar schedule.

According to Curt Cavin of the Indianapolis Star, Phillip Morris USA will not continue its free ticket voucher program at IndyCar races in 2010.

No wonder Terry Angstadt has become so fond of promoters that are subsidized by governments.

It is difficult to imagine that IndyCar will return to Kansas Speedway after 2010 unless more than 50,000 Middle Americans suddenly determine that what they really want to watch at the Kansas oval is an international road racing series. The Kansas IndyCar race was supported not only by the Marlboro ticket program, but also by NASCAR fans who were forced to buy bundled tickets.

Now, both subsidies are gone.

Phillip Morris USA will continue to sponsor Team Penske - for 2010, at least. But perhaps we now are better able to understand why Tim Cindric has become so keen to bring star NASCAR drivers to Indy next year in order to increase television ratings.

Roggespierre

Working Mission Statement

2009-10-22T14:46:00.008-04:00

Enough, already! We have bandied back and forth, to and fro, so that we might devise a Mission Statement for a revamped IndyCar Series. It is clear to me that we must arrive at a consensus with regards to multiple key issues before we can clearly define our Mission.

Therefore, let us use GreyMouser's 3-sentence adaptation of the original submissions from Citizen John and TC.

(Working) Mission Statement

1. We are committed to working with our partners to provide a superior auto racing product for the avid and casual fan alike that is compelling, entertaining and fun to watch.

2. We are committed to providing leadership that allows competitors to test new technologies and refined applications to answer the challenges of the 21st Century and beyond.

3. Every interaction a fan or partner has with our organization must be exciting, enjoyable and memorable.

Product Development Preparation

We shall use the Working Mission Statement above to organize development of our Marketing Plan. The 4 Ps model - Product, Place, Price, Promotion (in that order) - will lend structure to our Plan.

After we establish plans for each of the four Ps, we will return to the Mission Statement. Please note that the first P, Product, will likely require a good deal of time and consideration. The IndyCar product is much more than cars and engines.

Before we commence the process of Product Development, I ask that you go back and read the following Maxims. Each considers an argument regarding product development. I admit that my various positions tend to fluctuate and are often contradictory with one another.

I will introduce our first Product Development issue in the next entry.

Roggespierre

IndyCar: IRL US F2000 Series Misses the Mark

2009-10-21T20:30:00.000-04:00

It is no secret that Tony Cotman wants to revamp the IndyCar ladder system. To that end, Andersen Promotions, an offshoot of Andersen Racing, is planning to add a retooled U.S. F2000 National Championship to the 2010 schedule. The Indy Racing League will sanction the new entry-level series.

You can read the entire story at Racer.

My criticism has little to do with the US F2000 announcement. In that regard, I have only two relatively minor concerns.

The first is that drivers who are not yet 18 years old would seem to be natural targets for the new series but for the presence of Phillip Morris USA. Because the marketer of Marlboro participates in the IRL, drivers who are not yet legal adults are not permitted to drive in IRL sanctioned events. That one of the IRL's biggest sponsors works against the interests of the new entry level series strikes me as being a bit odd.

Second, I wish that F2000 would embrace ovals. Racer reports that two ovals are under consideration for 2010, but that most if not all of the schedule will be composed of road and street races. Is this supposed to be a proving ground for drivers who wish to participate in the Indianapolis 500? I guess not.

Another Bottleneck

One can sense that IRL management is trying to attract young American drivers who might some day revive the IndyCar Series. For this, I commend Angstadt, Barnhart and Cotman.

However, I would also suggest that the new Indy Lights feeder series will do little if anything to actually solve the problem. There are and have been plenty of talented young Americans who would have liked to have been IndyCar drivers. That they did not achieve their dreams is not due to a lack of viable feeder series.

Drivers such as Robbie Pecorari, Cole Morgan, and Kevin Swindell fell from the IndyCar ladder because the cost of operating a team at the top rung is five times greater than that team's market value. Put another way, if the IndyCar Series can not afford to keep 2004 Indianapolis 500 Champion Buddy Rice, then it can not afford to attract Pecorari, Morgan and Swindell.

The new U.S. F2000 National Championship might become a fine lower level formula championship. Regrettably, it is also likely to create yet another bottleneck of drivers whose accomplishments warrant an upgrade in competition that their personal resources and connections can not purchase.

Roggespierre

Thinking IndyCar Innovation

2009-10-21T12:55:00.006-04:00

Many of us believe that Innovation should have a role in the Mission of IndyCar racing. The details will require compromise.

Let us examine our proposed Mission Statement, courtesy of Citizen John.

Mission Statement
IndyCar exists to provide a superior auto racing product for the avid and casual fan alike that is compelling, entertaining and fun to watch. IndyCar is committed to making every interaction a fan has with IndyCar an exciting, enjoyable and memorable experience.

Innovation & Leadership: Comments and Suggestions

Mr. Cooper

"The role of leadership in testing automotive technology is essential. It is part of the value of the brand dating back to Carl Fisher. Without it, your Mission Statement would have no teeth. It is not unique in the marketplace. If it is not more than entertaining - which it needs to be - it is a drop in the sea with nothing special to merit attention."

Mr. Cooper suggests that we add to the Mission Statement, "...provides leadership in testing 21st Century automotive solutions."

Citizen John

"I'm having a hard time translating innovation into increased fan interest. Sure, there would be some interest, but as to substantial interest 'because of' innovation, I don't know. Fan interest in sports seems to center around skill and strategy of the participants... how many people will watch IndyCar 'because' it is the leader in testing automotive solutions for 21st Century needs?"

Dave NJ

"This is great in theory, but it seems to me that the tech challenges for transportation in the 21st Century are about energy efficiency. It certainly isn't speed and power, except within the constraints of energy efficiency. I'm not convinced that you can create a compelling racing product around what amounts to a fuel economy run."

BC has suggested that we "uphold the heritage" of the Indy 500, which he believes would provide an implicit tip of the cap to "a strong tradition of innovation."

Osca

"Since every era brings new ideas, 'innovation' means not only new ideas, but also adapting to and improving the ideas that are already available."

VirtualBalboa

"Innovation will always initially be limited to the race track early on and then move from there with public demand and interest, assuming that you have a testing ground for that sort of thing. Nothing wrong with that."

GreyMouser noted that he likes the idea of adding innovation to the Mission Statement because it would provide IndyCar a clear point of product differentiation with regards to NASCAR. He also believes that innovation would provide IndyCar a market space to which no other sanctioning body has laid claim.

Roggespierre's Review

I tend to believe that Innovation must be central to our Mission. Like new contributor IndyIan, I also believe that innovation must evolve from the lowest points on the supply chain. This might enable IndyCar teams to augment their own brands in the marketplace. Ultimately, that would be a good thing for IndyCar racing.

Mr. Cooper's word, "leadership," is, I think, an underrated and essential element of his suggestion. IndyCar lacks identity at present in part because it does not lead the auto racing market in any area.

Furthermore, I do believe that energy efficiency and fuel consumption can be made to be both interesting and entertaining. This issue is one that I fully intend to discuss thoroughly when we consider our "whole product" offering.

Request for Proposals

So, allow me to issue an RFP to all readers of and contributors to The Indy Idea. Please submit the language that you would use in the Mission Statement to denote Leadership in Relevant Automotive Innovation.

We shall then discuss and determine the optimal solution for the time being. Rest assured that we will revisit the Mission Statement after we complete the Product phase of our Marketing Plan.

Roggespierre

Slogging toward a New IndyCar Mission

2009-10-19T15:17:00.008-04:00

Conventional wisdom holds that somebody once said that it is easier to tear down than to build up.

That guy was right.

After much discussion, disagreement and digression, we still have not established a Mission Statement that might bring about a New Day Rising in IndyCar racing.

Our most comprehensive effort to date came from the keypad of Citizen John. Let us review his submission.

"IndyCar exists to provide a superior auto racing product for the avid and casual fan alike that is compelling, entertaining and fun to watch. IndyCar is committed to making every interaction a fan has with IndyCar an exciting, enjoyable and memorable experience."

Recall that the Mission Statement should explain why the firm should exist. More specifically, it should broadly state what the organization must do consistently if it is to achieve its Vision. Our Vision Statement is below.

"IndyCar shall be the clear number-one choice among auto racing consumers in the United States. At its core is the Indianapolis 500, an iconic American institution that shall transcend the sport of racing and be a worldwide automotive celebration."

Can we assume that if we were to achieve the Mission that John has proposed, we could then expect IndyCar to become "the number-one choice among auto racing consumers in the United States?"

I am skeptical. I believe that IndyCar must do more. For example, I like the addition that was proposed by Mr. Cooper.

"...leadership in testing automotive solutions for 21st Century needs."

This might lend relevance and technological intrigue to IndyCar racing that would differentiate it from NASCAR. Here, we could rearrange the playing field, adding real significance to the product so that we might avoid competing head-to-head with NASCAR in the racingtainment market. Innovation also speaks to our Vision of the Indy 500 transcending the sport to become a worldwide automotive celebration.

BC wrote that IndyCar should 1) serve fans and 2) "honor and build upon the heritage" of the Indy 500 and championship racing. I think that Mr. Cooper's suggestion would help us to accomplish both of those tasks.

Ground Rules

I think that we are close to resolution. However, certain asides continue to foil our efforts. Therefore, as we attempt to finalize our Mission Statement, let us not raise any one of the following subjects.

The name of either the series or the sanctioning body
Specific attributes of the cars, drivers and tracks
Costs

We will discuss each of those issues and many more in due time.

For now, let us consider Citizen John's proposed Mission Statement. Does it contain redundancies that should be eliminated? Have we omitted anything that is essential to IndyCar's existence?

Let's get moving and wrap this up.

Roggespierre

IndyCar Mission Refocus

2009-10-17T11:52:00.003-04:00

I appreciate the following admonishment from Osca, a frequent and valued contributor.

"Roggespierre--please don’t lose focus..."

Thank you, Osca. We shall press on in search of a Mission for IndyCar racing.

Citizen John has proposed one that is worthy of our attention.

Mission Statement:
IndyCar exists to provide a superior auto racing product for the avid and casual fan alike that is compelling, entertaining and fun to watch. IndyCar is committed to making every interaction a fan has with IndyCar an exciting, enjoyable and memorable experience.

I notice the following core components.

Market Segmentation: avid fan vs. casual fan
Customer Focus: compelling, entertaining, fun to watch
Reciprocal relationship between buyer and seller: exciting, enjoyable, memorable experience

Recall that our Mission Statement should indicate both why and for whom IndyCar shall exist. For guidance, we would do well to refer to our Vision Statement.

Vision Statement:
IndyCar shall be the clear number-one choice among auto racing consumers in the United States. At its core is the Indianapolis 500, an iconic American institution that shall transcend the sport of racing and be a worldwide automotive celebration.

In my opinion, Citizen John's proposal effectively addresses the goal of becoming "the clear number-one choice among auto racing consumers in the United States," insofar as it focuses on customers first.

Both Citizen John and BC have addressed the issue of psychological benefit to customers. Specifically, the pursuit of speed records has historically been a major selling point of the Indianapolis 500. Physical limitations being what they are, IndyCar is unlikely to have that particular inherent advantage going forward.

Therefore, I ask the following question. Was it really speed records that so intrigued Indy 500 fans? Maybe, but maybe not.

Might it have been the parallel notions of progress and human achievement that really drove the intrigue? These are powerful forces in the history of American Thought.

I would suggest that speed records were much more than mere thrill shows; they were a source of pride because they seemed to confirm what so many postwar Americans were inclined to believe was good and right.

Our Mission Statement should speak to the base passions, prejudices and values of "auto racing consumers in the United States." We should value innovation because it not only appeals to customers' passions, but also because it might enable the 500 to "transcend the sport of racing and be a worldwide automotive celebration."

Innovation can mean more than just spending money to go faster.

Thoughts?

Roggespierre

IndyCar: Seeking a worthy Mission

2009-10-16T17:38:00.008-04:00

We seek a Mission Statement for the series that shall compete at the Indianapolis 500. The task of linking the existential (Vision) with the phenomenological (Action or Mission) is extremely difficult.

For example, it is one thing to write that, "We hold these truths to be self-evident..." It is quite another to incorporate those assumed truths into actionable law that is intended to govern present and future behavior.

That is why it is my humble opinion that Gouverneur Morris is among the more underrated Founding Fathers of the United States. He drafted one of the most meaningful and eloquent Mission Statements that I have had the privilege to have read.

John Locke and Thomas Paine provided the Founders an idealistic conception of what they wanted the United States of America to be; Morris brilliantly prescribed what it was that the new nation would do. Equally important, he did so without imposing his own prejudices on future actors.

Let us review his masterpiece and observe the ways in which he crafted a Mission Statement that was both meaningful and flexible. Let us also admire the central position that he bestowed upon customers - The People.

I shall present Morris's words line-by-line so that the profound impact of each point might be better observed.

"We the People of the United States
in Order to form a more perfect Union
establish Justice
insure domestic Tranquility
provide for the common defence
promote the general Welfare
and secure the Blessings of Liberty to ourselves and our Posterity
do ordain and establish this Constitution of the United States of America.

Mission: The Who and Why

Morris made clear that it was The People who possessed the moral authority to act. We, too, must make clear that it is The People - customers - who shall empower IndyCar to do whatever it is that it shall do.

Morris presented six reasons that explained why The People acted as they did in 1789. What are the reasons that explain why our IndyCar Series will act as it will? Moreover, why should this organization exist at all? Why will "auto racing consumers in the United States" be better off for having watched or attended an IndyCar Series event? What benefits shall they glean?

Our intent is not to establish a National Constitution, but rather to create a National Racing Series that supports and augments an "iconic American institution." What are the base activities that we must always do - what must we consistently deliver - if we are to achieve our Vision? What are the values that shall guide us?

Product: The What and How

Our Mission is not our product; it is why our organization exists.

For example, we might all agree that IndyCar needs to bring back innovation. The question, then, is why? How might innovation benefit customers - The People?

This article is intended to provide clarification as we challenge ourselves to achieve a difficult task. I promise that we shall discuss specific product attributes very soon.

Human action is preceded by Will. We know why before we determine how. This exercise is no different. That is why we need a Mission Statement and, perhaps, a Values Statement.

I look forward to reading your comments and suggestions.

Roggespierre

IndyCar: The Road Ahead - Mission Possible!

2009-10-16T10:00:00.001-04:00

Congratulations! We have taken the first step toward reinventing IndyCar to achieve mass market acceptance. Please read our completed Vision Statement below and take a moment to think about its implications. Keep in mind that "IndyCar" is a working title for the series that competes at Indianapolis in May.

"IndyCar shall be the clear number-one choice among auto racing consumers in the United States. At its core is the Indianapolis 500, an iconic American institution that shall transcend the sport of racing and be a worldwide automotive celebration."

Mission Possible

We must now forge a Mission Statement. This is the first derivative of our vision; it describes the activities that must be done at all times if we are to activate our Vision and inspire a New Day Rising for IndyCar and the Indianapolis 500.

Again, I refer you to this concise summary of the difference between Vision and Mission from the Minnesota Department of Health. I suggest that we begin by proposing words that convey what IndyCar must do in order to be the "number-one choice among auto racing consumers in the United States." We do not need great detail with regards to product attributes. Those issues will be addressed soon enough, when we establish our Product, Place, and Price offerings in our Marketing Plan.

Mission is about core organizational purpose. We might also want to incorporate a Values Statement with our Mission. Management Consultant Carter McNamara provides a brief synopsis of Vision, Mission and Values here.

Allow me to present a few words that might get us started.

Innovation
Competition
Entertainment
Value
Unique
Efficient
Profit

We need not use all of the words above. They are merely a starting point for discussion.

The words that we choose to incorporate in our Mission and, possibly, Values Statements shall be central to our next task, the Marketing Plan. It is there that we shall begin to attack the details. Therefore, I ask that you present not only the essential words, but also the underlying ideas that make those words important.

Discuss.

Roggespierre

IndyCar: Completing the Vision

2009-10-15T15:00:00.000-04:00

Our Vision for a New Day Rising in IndyCar racing is nearly complete. However, one final issue must be resolved. The Vision Statement is presented below.

IndyCar shall be the clear number-one choice among auto racing consumers in the United States. At its core is the Indianapolis 500, an iconic American institution that shall transcend the sport of racing and be a worldwide automotive celebration.

Muskie has suggested that we insert "...featuring open wheel race cars designed for competition at the Indianapolis 500...".

Should we incorporate this language? I am tempted, albeit with some reservations.

First, we might determine that the sanctioning body should enter forms of racing that do not include open-wheel cars. However, we have identified the series and not the sanctioning body in our Vision Statement. Therefore, I think that Muskie's suggestion could fit.

Second, we have had much discussion about the relationship between the 500 and the series. I quote VirtualBalboa.

"For a series to work and grow and prosper, the races must stand on their own."

I tend to agree. This leads me to suspect that to identify a singular purpose - that of being "designed for competition in the Indianapolis 500" - for our as yet undetermined product might be a tad premature

Rocketman53 believes that the Indianapolis 500 should stand above all else. Conversely, Trick Dickle believes that a strong link to the 500 is essential if the series is to succeed.

Might they both be correct? I think so. That is why I would be satisfied to leave the "...at its core..." phrase, also suggested by Muskie, intact.

What do you think?

Roggespierre

IndyCar New Day Rising: Vision and Mission

2009-10-14T18:00:00.002-04:00

Previously, I proposed a Vision Statement that might guide us as we seek a New Day Rising for IndyCar racing. The iteration below contains some cosmetic edits.

"IndyCar shall be the clear number-one choice among auto racing consumers in the United States. At its core is the Indianapolis 500, an iconic American institution that shall transcend the sport of racing and be a worldwide automotive celebration."

Yea or Nay?

This is the time to suggest changes and/or additions. If I do not receive any further suggestions in the next few hours, then I will proceed and use the Vision Statement above.

"Act as if what you do makes a difference. It does." - William James

I anticipate seeking suggestions for our New Day Rising IndyCar Mission Statement very soon. Some contributions to the Vision Statement discussion should be revisited when we attempt to hash out our Mission Statement.

If you would like to prepare, then I suggest that you read this very brief explanation of the difference between a Vision Statement and a Mission Statement. It was published by the Minnesota Department of Health. I appreciated its brevity.

In summary, a Vision Statement is a conception of the optimal state of being. A Mission Statement identifies those Big Picture Activities that must be done consistently in order to realize and sustain the Vision. The Mission should not be highly detailed, but it should be actionable.

And so, we press on "As If" what we do makes a difference. Let us hope that Mr. James was right.

Roggespierre

TV Viewers tune out IndyCar Championship

2009-10-14T13:00:00.010-04:00

Allow me to interrupt the New Day Rising project for just a moment.

The television ratings for the penultimate IndyCar race of the season are in. The number is consistent with the others from the second half of the 2009 season on Versus.

Sports Media Watch has the complete story.

Here is how IndyCar racing compared with other Versus offerings of the past week.

Capital/Bruins NHL game = 405,000 viewers
IndyCar at Homestead-Miami Speedway = 268,000 viewers
UFL (new pro football league) 1st game = 205,000 viewers

The numbers provide still more reason to undertake the New Day Rising project. The IndyCar Championship race barely topped a start-up league.

We now turn our attention back to completing our New Vision for the sport.

Roggespierre

IndyCar Vision: It's Tougher than it Looks

2009-10-13T18:30:00.010-04:00

Less than 24 hours into our New Day Rising Project, we have discovered that defining a comprehensive vision for the IndyCar Series is every bit as difficult as we had suspected.

I thought that the Vision should answer two questions.

1. What is the best that IndyCar can be?

2. How will we know when IndyCar is successful?

Readers and contributors have provided thoughtful and highly varied responses. Let's see whether or not we can establish some common themes.

Citizen John

"To be the premier auto racing series in the U.S. with the Indy 500 being the preeminent auto race in the country."

osca

"To provide racing fans with the best possible open wheel racing in the United States.

To be the best possible open wheel racing means we will offer a varied visual and audio experience provided by a product that is affordable, attractive and available to fans at venues that encourage attendance in person and enhance the TV experience."

Roggespierre Commentary

Citizen John's submission is succinct and ambitious. I like it. Osca takes into account a very important constituency that has too often been ignored by IndyCar participants. That would be customers, racing fans.

I suggest that we combine these two submissions.

"IndyCar shall be the clear number-one choice among auto racing consumers in the United States. The Indianapolis 500 is an iconic American institution that shall transcend racing and become a worldwide automotive celebration."

There are good reasons to use the "number-one choice" language. First, why would a series that includes the Indy 500 aim for anything less? Second, we want demonstrable evidence of success that can be measured; "number-one" serves that purpose. Third, "choice" implies that we understand that the market is competitive. Customers have many events and television programs from which to choose. We must be their first choice.

Notice, too, that I chose to use "auto racing consumers in the United States" in this portion of the Vision Statement. This is important, I think, because the attributes that appeal to people in one culture are not necessarily the attributes that appeal to people in another culture. Because IndyCar is based in the United States, it must focus on cultivating latent demand in the U.S.

In addition, there are many, many people who will never like racing. Those people will do nothing to help IndyCar become number-one. I suggest that we forget about them for eleven months each year. That is why I focus on "auto racing consumers." However, we shall open our doors to the others in May.

Trick Dickle

"Your sport and series have EVERYTHING to do with the Indianapolis 500."

Mr. Dickle is right. But this creates a tricky proposition. Specifically, how do we retain and improve the "special" status of the 500 without making the rest of the schedule appear irrelevant?

That speaks to my final second sentence above.

"The Indianapolis 500 is an iconic American institution that shall transcend racing and become a worldwide automotive celebration."

Many people who like cars do not necessarily like racing. The Indy 500 is both a race and a spectacle that must once again be about cars, both those on the track and those in the Coke Lot. Indy must draw spectators, primarily from Middle America, for three weeks. A three week celebration of automotive innovation, technology and competition is therefore what I have in mind. Indy will be made special by activities both on and off the track.

The balance of the series schedule must be merely the "clear number-one choice among auto racing consumers in the United States."

Onward

Vision Statements come in all shapes and sizes. Two sentences might not be enough. Those that I have proposed might not be the right sentences.

We are not done with the Vision portion of your strategic IndyCar plan. There is more to consider in the Comments section below this article.

I welcome your feedback and additional suggestions.

Roggespierre

IndyCar: New Day Rising

2009-10-12T19:30:00.000-04:00

The day is here and the time is now. IndyCar racing is in need of resurrection. Empirical evidence makes that clear.

Thus, we commence a New Day Rising at the Indy Idea. We therefore redirect our focus from what IndyCar is to what it can be and should be.

We must begin at the top and then work our way through the details. The first step is to define the best of what it we believe IndyCar can be.

In other words, we must define our Vision for IndyCar racing.

Vision is what we shall work toward. It shall provide direction for every decision that we make. Vision will guide us as we attempt to construct an IndyCar Series that is truly great.

We must answer the following questions.

What is the best that IndyCar can be?
How will we know when IndyCar is successful?

I invite and encourage everyone who visits this space to post their opinions in the Comments section below. I will compile, publish and discuss them with you. I shall seek your feedback at every step along the way.

Our goal is to define, generally, "where" IndyCar is capable of going before we begin go examine "how" to take it there . This is the time for Big Picture thinking.

Vision: for your Reference

A general discussion of Vision Statements is linked here.

Consultants Anna McGowan and Jan Sykes explain the purpose of Vision Statements here.

Two examples of corporate Vision Statements are below.

Coca Cola

"To achieve sustainable growth, we have established a vision with clear goals.

Profit: Maximizing return to share owners while being mindful of our overall responsibilities.
People: Being a great place to work where people are inspired to be the best they can be.
Portfolio: Bringing to the world a portfolio of beverage brands that anticipates and satisfies peoples; desires and needs.
Partners: Nurturing a winning network of partners and building mutual loyalty.
Planet: Being a responsible global citizen that makes a difference."

McDonald's

"McDonald's vision is to be the world's best quick service restaurant experience. Being the best means providing outstanding quality, service, cleanliness, and value, so that we make every customer in every restaurant smile."

New Day Rising

Let us commence a New Day Rising of IndyCar racing. We do not know whether or not anyone in power shall either read or consider our proposals.

Nevertheless, we proceed "As If".

Roggespierre

IndyCar: Angstadt Commences a Fool's Errand

2009-10-12T14:30:00.003-04:00

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

IndyCar: Barber Tickets on Sale Today

2009-10-12T12:44:00.008-04:00

Tickets for the government subsidized IndyCar race at Barber Motorsports Park are now on sale. The road course in Birmingham, Alabama reports that it will build temporary grandstands to accommodate what is expected to be a "phenomenal" crowd.

Previously, BMP indicated that seating capacity would be limited to 30,000 paying customers. That figure has since been revised. Not surprisingly, a new number was not released.

We now know that between 3,000 and 5,000 temporary grandstands will be erected for the April event. If that in fact brings capacity to 35,000, then Barber would likely be able to hold the crowd that half-filled Homestead-Miami Speedway for the penultimate race of 2009.

Nevertheless, attendance at Barber will look good to the couple hundred-thousand or so who watch the event on television.

Roggespierre

IndyCar Ticket Giveaways did not Work

2009-10-10T16:48:00.003-04:00

Yes, it's hot at Homestead-Miami Speedway. The heat is sufficiently oppressive that it is radiating through my television screen.

Still, given the amount of promotion that was dedicated to this three-way championship battle, the crowd has to be considered something of a disappointment. As I have written before, it is clear that the IRL can't sell these guys.

The product - the whole product - is the problem. We know this because not enough people are buying it. A product that is not in demand is by definition flawed. This must change.

Let's hope for a safe and entertaining race.

Roggespierre

IndyCar History in the Making

2009-10-09T20:55:00.012-04:00

Fans of IndyCar racing will likely witness a historic first Saturday evening at Homestead-Miami Speedway. I only learned of this factoid this evening.

Since the Indianapolis Motor Speedway opened in 1909, there has never been a season on the "Indy" championship trail quite like this one. This, the sport's Centennial season, will likely be the first to run to completion without an American driver having won a single race.

I can not speak authoritatively about the early years of IndyCar racing. However, I do know that Carl Fisher, the man pictured above and the driving force behind both the Indianapolis Motor Speedway and Miami Beach, would not have allowed the cars that race at Indy to become irrelevant. Tony Hulman and Wilbur Shaw are in the photograph to the left. They, too, would likely be saddened by the state of contemporary IndyCar racing.

Tomorrow, IndyCar will crown a champion. Most racing fans in the United States will not care.

Perhaps some day IndyCar will once again have leaders such as Fisher, Hulman and Shaw - executives who possess acute business instincts and who care about the sport as they care about themselves. I am proud to know that individuals such of these are frequent guests and contributors here.

Beginning Monday, we shall endeavor to construct a plan that might honor the fathers of the Greatest Race in the World. We do not expect significant rewards for our efforts.

We write "As If".

Roggespierre

IndyCar: Good News at Sarah Fisher Racing

2009-10-09T09:30:00.002-04:00

It is nice to know that good people can work hard, do things the right way, and achieve positive results. Such is the case at Sarah Fisher Racing, a fledgling IndyCar team that is poised to expand in 2010.

I encourage you to read the story in Curt Cavin's excellent Pit Pass in the Indianapolis Star.

Organic and Sustainable Growth

Fisher will increase her IndyCar participation to include nine races next season. Even better, Dollar General Stores, a holding of storied leveraged buyout firm Kohlberg Kravis Roberts, has signed on for another year of sponsorship. Somewhat surprisingly, Fisher, a USAC veteran and oval track specialist, told Cavin that her schedule will include a mix of ovals, road courses and street circuits.

Sarah Fisher Racing took delivery of a new Dallara last month, courtesy of associate sponsor Hartman Oil. That enabled her to sign former Indy Lights Champion Jay Howard to drive in four races in 2010. The Englishman will be sponsored by Tire Kingdom, a subsidiary of TBC Corporation.

Sarah Fisher works just as hard away from the track as she does when she is in the race car. She has established a following on Facebook and Twitter. She has built an impressive array of associate sponsors including Direct Supply, IUPUI, AAA Hoosier Motor Club, autotex PINK, and the aforementioned Hartman Oil.

Congratulations to Sarah Fisher, John O'Gara, Andy O'Gara and everyone at SFR. They are making significant inroads without the benefit of government subsidies and APEX Brasil. Instead, they merely serve customers.

Perhaps the IRL might learn something from them.

Roggespierre

Auto Racing Reporters Hungry for ISC Blood

2009-10-08T20:44:00.009-04:00

This is absolutely hilarious.

First, let me explain that, if you have never been in a media room at a race track, then you are missing quite a treat.

Motorsports reporters are, on balance, a motley collection of misfits. They tend to be slovenly, poorly dressed, and malodorous.

Until now, they have typically been well fed. However, California Speedway has determined that the scribes will have to pay for the privilege of manning the buffet table. The following excerpts are from an email that was distributed to angry members of the the American Auto Racing Writers & Broadcasters Association.

"As some of our members may be aware, California Speedway (nee Auto Club Speedway) has decided to charge for meals during the upcoming Cup weekend, October 9-11. I wish to encourage AARWBA member not to pay the $25, and instead to seek other alternatives."

Horrors! I am a former news reporter. In the news business, reporters do not get free meals. They do get to spend a lot of time in awful neighborhoods, knocking on doors to obtain bits of information about the daily murder and mayhem. That is one reason why I am not a reporter anymore.

Sports reporters are the envy of newsrooms everywhere. Those guys get to hang out with athletes, attend cool events, and chow down on free food.

Let's just say that my sympathy for motorsports reporters is, well, limited. Frankly, $25 for three days of meals sounds like a pretty good deal to me.

"The track is owned by International Speedway Corp (ISC), and they are making plenty of money. A few years ago, the fall race had a gross margin in excess of $30 million. But that’s apparently not enough for the controlling shareholders."

This quote helps to explain why the writer opted to cover auto racing rather than work for the Wall Street Journal. The term, "gross margin", actually means something. It is the difference between sales revenue and production costs. It is not operating profit because overhead is not included in the calculation. Because racing facilities incur significant fixed costs, they tend to have substantial overhead liabilities.

Notice that ISC announced its quarterly results Thursday. They were not very good. We will not know ISC's gross margin until the company files its financial statements with the SEC. Nevertheless, we can say with certainty that it is a number that will not attract the attention of Wall Street analysts.

But it most certainly is the focus of that gluttonous band of motorsports reporters.

Roggespierre

International Speedway takes a Bath

2009-10-08T14:45:00.001-04:00

The recently ended quarter was not good to International Speedway Corporation. The House of France's satellite track ownership and promotions company is operating at a net loss after three quarters of FY2009.

Keep this in mind the next time someone claims that ISC is trying to kill the IndyCar Series. In my estimation, it is much more likely that ISC is merely trying to generate profit. If the IndyCar races at Kansas and Chicagoland do not produce profit as stand-alone events, then they will not continue to exist.

That is why IRL management loves publicly subsidized races. There is not only no financial risk, but also no pressure to attract a legitimate audience.

The year-over year ISC numbers for the quarter are interesting.

Admissions Revenue - down 15.96% to $53.35 million
Motorsports Revenue - down 18.22% to $105.96 million
Food & Beverage Revenue - down 31.38% to $12.62 million

IndyCar fans should take notice of the line item that accounts for more than half of all ISC revenues. Motorsports Revenue is primarily a function of direct distributions from NASCAR, as well as track and event sponsorships and licensing. The NASCAR distributions are enabled almost exclusively by television ratings.

Next week, we look to the future of IndyCar. Exponentially increasing U.S. television ratings is paramount.

Roggespierre

Good Reviews for IndyCar Homestead Promotion

2009-10-07T15:00:00.001-04:00

The word from Miami from multiple public and private sources is that promotion for the penultimate IndyCar race of 2009 has been surprisingly aggressive. Positive reviews regarding outdoor boards, direct mail, phone calls and emails are scattered throughout the Internet.

Several promotions have been mentioned in this space, although I have been critical of what seems to be an overabundance of free tickets. Distributing a few freebies can enhance event promotions, but distributing too many free tickets can also further devalue the product.

Sarah Fisher will make an appearance from 5pm until 7pm this evening at TGI Friday's in Miami. She, too, is giving away tickets. However, I shall not criticise in this instance because the beneficiary is Susan G. Komen for the Cure. Furthermore, I encourage that you give generously if you are so inclined.

Danica Patrick's recent soiree with NASCAR teams has provided additional intrigue.

Increased television ratings would be much more economically beneficial than increased attendance at race tracks. Nevertheless, if what we are hearing from South Florida is true, then I think that we should commend the IRL, Homestead-Miami Speedway, the participating teams and drivers, and, of course, APEX Brasil. Promotion does cost money, after all.

Roggespierre

IndyCar Maxim #6

2009-10-06T19:30:00.006-04:00

Roggespierre's Maxim #6
Courtesy of Ken Homa, Georgetown University McDonough School of Business

Remedial would be Kind

At which stage would say that Terry Angstadt and Brian Barnhart operate? I would argue that they presently reside at top of Professor Homa's list and at the bottom of the motorsports management heap. Not all of the problems are their fault, of course. Unfortunately, their proposed solutions are not really solutions at all.

Note that I do not include Tony Cotman in my analysis of IRL management because his responsibilities and authority are unclear to me.

IRL management is Reactionary in almost every conceivable way. The league is indeed fighting to survive. To that end, we have ample and compelling evidence.

Pursuing arbitraged sponsorships that are intended to preserve the status quo despite the absence of demonstrated demand for the racing product.

Establishing a race promotion contract with the publicly subsidized promoter of the undersized Barber Motorsports Park.

Attempting to convince the City of Baltimore and the State of Maryland to subsidize a 2011 street race.

Renewing a Honda engine and sponsorship arrangement that forces IndyCar teams to work with a rent-seeking supplier that is bleeding the IndyCar enterprise of much needed cash.

Attempting to secure robust financing in exchange for a non-strategic race in Brazil.

Seeking corporate dollars rather than consumer acceptance.

Allowing powerful teams disproportionate influence with regard to selection of the new specs that are to be introduced in 2012.

Failing to realign IndyCar TEAM so that it might improve the IndyCar product to achieve market acceptance.

Chasing short-term pay days rather than establishing a sustainable cost structure that might lead to a more salable product and increased U.S. television ratings.

Choosing to believe that it is incapable of competing with the dominant market leader.

Turning its back to virtually all empirical data and pursuing a market position that has very limited upside, at best.

Attempting to force a demonstrably unwanted product on the market, rather than recognizing and adapting to consumer demand.

Toward a Market Competitive IndyCar Series: Fell the House of France!

I would like to see an IRL management team that might reside at the bottom of Professor Homa's list and the top of the U.S. motorsports market. The IndyCar Series needs Revolutionary managers! However, leadership of that type will require expertise in fields that have little or nothing to do with either sales or racing operations. I believe in all sincerity that the future of the great Indianapolis 500 Mile Race depends on it.

Acquiring such a management team is in the interest of the Indianapolis Motor Speedway Board of Directors. Now that the 2009 IndyCar Series season is nearly complete, I hope in earnest that the Board will commence with the job at once.

Roggespierre

Rio Mayor: IndyCar event costs too Much

2009-10-06T14:30:00.001-04:00

If the IndyCar Series races in Brazil in 2010, then it will not be in Rio de Janeiro. The mayor of the host city of the 2016 Olympic Games made that clear in an interview. The link (in Portuguese) is here.

...the mayor of Rio de Janeiro, Eduardo Paes, said that the city will not
compete to be the Brazilian home of the IndyCar Series.

IRL Commercial Division President Terry Angstadt has spent a significant portion of the past month in Brazil. He is attempting to land a season opening race for 2010 and, more importantly, financing that might sustain the series and its teams.

I think that we can anticipate the likely excuses that we should expect in the event that Angstadt fails to deliver either the money or the race in Brazil.

The 2016 Olympics foiled everything.

There was just not enough time to find a suitable racing venue.

The global economic recovery did not begin soon enough.

The more likely reasons for Angstadt's South American struggles are almost certainly very similar to the primary obstacle that is preventing IndyCar from competing in the North American marketplace.

The product costs much more than it is worth.

The following is a paraphrased version of a direct translation from Freetranslation.com.

"We saw the costs and decided to step away from IndyCar. It is a very
costly event." - Eduardo Paes, Mayor of Rio de Janeiro

It is possible that Angstadt already has a deal in place at another Brazilian location. Perhaps we shall learn more from Homestead-Miami this week.

For What it's Worth

Earlier, I described a APEX Brasil ticket giveaway at Sedano's Supermarkets for the Homestead-Miami race. For those who are interested, a new press release and photograph of the event is here.

Roggespierre

Meira, Piquet Test Trucks + More IndyCar Freebies!

2009-10-05T21:45:00.005-04:00

Two-time Indianapolis 500 runner-up Vitor Meira and former F1 Renault driver Nelson Piquet, Jr. will test with Red Horse Racing of the NASCAR (sans-culottes!) Camping World Truck Series. The one-day test is scheduled for October 12.

"We look forward to helping Vitor Meira and Nelson Piquet make the transition into NASCAR." - Tom DeLoach, Owner of Red Horse Racing

This is strange for several reasons. For one, Meira was one of several IndyCar drivers promoting the IndyCar finale at Macy's in Miami October 2. Incidentally, IZOD and APEX Brasil used the event to give away 50 free tickets to the race. The freebie count is steadily climbing.

Returning to the matter at hand, A.J. Foyt confirmed last week that Meira would return to the cockpit of the ABC Supply Co./AJ Foyt Racing Dallara in 2010. Why, then, is Meira participating in a Camping World Trucks test next week? I suppose that he could just be looking to run a few Truck races in addition to his 2010 IndyCar schedule. However, given the desperate economic straits of the IndyCar Series, I do wonder about Foyt's sponsorship commitments for next season.

Piquet had been rumored to be looking at Eric Bachelart's Conquest Racing team in IndyCar. But you can't blame the son of the former world champion for checking out a NASCAR opportunity. The Truck Series is not only less costly than IndyCar, but also more popular, typically beating IndyCar's television ratings by about 45%.

NASCAR suddenly finds itself struggling with declining Cup ratings and attendance amid a still sluggish economy. The TV ratings decrease is most important because it devalues the NASCAR product at the firm level rather than the systemic level. We are therefore likely to see ride buyers migrate to NASCAR because it is still a much better deal than IndyCar.

I was told a few years ago that Vitor Meira brought no money to the table. I have no reason to believe that is not still true. However, if those who are driver-financiers go away, then how will the IRL sustain its overpriced and unwanted product?

Roggespierre

IndyCar: APEX Brasil Flexes its Fuel (and Moraes)

2009-10-05T17:00:00.009-04:00

APEX Brasil is getting pretty generous with the free tickets to the IndyCar finale at Homestead-Miami Speedway this weekend. I already alerted readers here to the ticket giveaway in exchange for sampling free Brazilian foods at South Florida supermarkets.

Now, we learn that the first 50 customers that fill-up with E85 at Midway U-Gas in Miami will each receive two free tickets to the penultimate IndyCar race of 2009.

Is it possible that the three-way shootout among Dixon, Franchitti and Briscoe has not brought a crush of race fans to the ticket windows at Homestead-Miami? Terry Angstadt and Company can't sell these guys, so they've enlisted APEX Brasil to buy tickets and then give them away.

Strange Incentives

The E85 customers will get the fuel for $0.85 per gallon, courtesy of the Brazilian Sugarcane Industry Association, no doubt a member of APEX Brasil. That's a great deal even if the lucky fuel buyers don't use the tickets.

Cheap fuel is a sure crowd pleaser at any location in the United States. IndyCar driver and team financier Mario Moraes is not. Therefore, having Moraes sign autographs for those who seek cheap fill-ups is a shrewd move. The IRL will be able to tout the hundreds, perhaps thousands, who showed up to get Moraes's autograph.

Of course, few if any of those folks will be in the stands this weekend to watch Mario drive his car. But, thanks to APEX Brasil's ticket purchases, that's not a problem. Everybody gets paid, anyway!

This is how you prop up* a product that consumers have rejected. Why are the Indianapolis Motor Speedway Board and IRL management allowing this to happen to the series that races at the Indianapolis 500?

Roggespierre

*Originally, this line read, "This is how you prop up a lie, a product that...." BC argued that my choice of words was inappropriate. Reading it again, I agree. IndyCar racing is not a lie. It is a product that has been rejected. The latter wording suffices and is not needlessly inflammatory. Thanks to BC for rightly suggesting that I rethink my original language.

IndyCar: We have seen the Enemy...

2009-10-04T21:05:00.012-04:00

The product is the problem. That part is easy. The solutions are not.

Some have asked why I dedicate so much of The Indy Idea to analysis of television ratings. This is a good question that warrants a serious answer. I shall do my best to provide one here.

I believe it is important that IndyCar participants recognize how bad things have become. They do not want to believe it. That is why they prefer racing venues such as Toronto, where the urban backdrop allows for a "major league" feel and a crowd consisting of 30,000 to 40,000 spectators looks good enough. That is also why they will be very excited about "phenomenal" fan turnout at Barber Motorsports Park, never mind the fact that the place can only hold approximately 30,000 spectators.

The Barber race would not exist if not for government subsidies. Toronto might be similarly subsidized, although I freely admit that I do not have evidence of it. Nevertheless, these events allow IndyCar participants to fool themselves into thinking that they are part of something that is cool and popular.

The IndyCar Series will not make the changes that must be made until those in power have no choice but to admit that change is necessary. They tend to like the dream world that they currently occupy. They want to keep it intact for as long as it is possible.

Many in IndyCar do not want to lower themselves to the point of serving an audience. IndyCar racing has no history of purposely serving anybody except for a very small group of insiders. Those insiders still exist and exert significant influence over the Indy Racing League and its feckless managers.

That is why IndyCar always blames others - race promoters, television partners, NASCAR, International Speedway Corporation, and sponsors that do not execute grand activation strategies on IndyCar's behalf. Versus is only the latest in a long line of pariahs. IndyCar participants like what they do and believe that others should, too. Any evidence to the contrary must therefore be the fault of someone else.

One of my goals here is to turn a mirror to those who are destroying this once great sport. Serious economic analysis leaves no doubt that IndyCar has failed in the competitive marketplace. I want the participants to know that they are not only not cool, but also not relevant. They act more like spoiled brats, having inherited market acceptance and then thrown it away so that they could spend what they want to spend and do what they want to do.

No more!

IndyCar's failure is directly attributable to those who have exercised power over the sport for more than 30 years. They refuse to believe it. My goal is to leave them no other alternative. The time for truth and reckoning is now.

Beginning Monday, October 14, I intend to begin looking to the future. The off-season at The Indy Idea shall be all about what IndyCar racing could and should become. It will be subject to economic discipline. Otherwise, I invite your thoughts about how IndyCar might become competitive in the marketplace. We shall continue, "As If."

Currently, IndyCar racing ranks fifth in the competition among auto racing series in the United States. NASCAR Cup and NASCAR Grand National are the undisputed Number One and Number Two players. The National Hot Rod Association and the NASCAR Truck Series are third and fourth. IndyCar is fifth, followed by ALMS.

Together, we can work to improve IndyCar's competitive positioning. I hope that you will contribute your good ideas, dispassionate analysis, and constructive debate.

Roggespierre

IndyCar: Kansas joins Ticket Independence Push

2009-10-03T17:45:00.000-04:00

Following on the heels of a similar announcement at Chicagoland Speedway, management at ISC sister track Kansas Speedway now says that customers may purchase tickets separately for the NASCAR Cup and IndyCar Series events in 2010.

The Kansas City Business Journal has the complete story.

Sink or Tread Water

Given the demonstrated unpopularity of the series, any change that might force an IndyCar event to live or die according to its ability to generate legitimate value in the marketplace must be considered an unfortunate turn for the league.

IndyCar needs to race at venues such as Toronto and Barber Motorsports Park, where race day attendance of 30,000 or so is thought to be pretty good. Events such as these typically require subsidies of one type or another. They are the unmistakable signs of market rejection.

Incidentally, Milwaukee drew almost 30,000 this year. However, there, the government is not amenable to requests for subsidies. Thus, the Milwaukee Mile is gone from IndyCar racing.

Unfortunately, the International Speedway Corporation is a private, for-profit firm. It undertakes only those projects that might produce an operating profit. IndyCar race promoters must pay the IRL a sanction fee that is in excess of market value; this allows the league to pay its largely insolvent racing teams a sum that exceeds their market value; this is required because operating an IndyCar team costs approximately five times the market value that an IndyCar team produces.

The cascade of prices in excess of values is the reason that IndyCar will not race at Richmond next season.

Sadly, barring a sudden surge of U.S. consumer enthusiasm for international drivers and overpriced cars and engines, a similar fate likely awaits the IndyCar events at Kansas and Chicagoland.

Roggespierre

IndyCar TV: Another Excuse Bites the Dust

2009-10-02T22:30:00.010-04:00

Thank you to Damon for relaying this information from Sports Media Watch.

Thursday's National Hockey League opening night prime time game on Versus drew 833,000 viewers. The late-night second game of the double-header earned a .37* rating, easily beating all IndyCar races this season except for Long Beach (.50).

(*I originally wrote that the second game got a .49 rating. That was inaccurate. I regret the error.)

Even without 18 million DirecTV subscribers, this was the best NHL opening night in history on Versus.

2009 IndyCar cable ratings are here. Additional analysis can be found here.

Recall that I have argued:

Versus is not to blame.
The DirecTV exodus is unlikely to have much impact on IndyCar ratings.

The second point is tricky, but the new data would seem to support it. The 833,000 opening night viewers is down only 5.3% from the 879,000 viewer average for last year's Stanley Cup Playoffs on Versus.

The good news is that we have identified some sports with which IndyCar is competitive.

Major League Soccer = 292,000 viewers average on ESPN2
WNBA = 269,000 viewers average, also on ESPN2

The problem is neither Versus nor DirecTV. The problem is that IndyCar racing is not a product that appeals to consumers in the United States.

The problem is the product.

Roggespierre

IndyCar: A Tale of Two Cities

2009-10-02T19:45:00.005-04:00

Now we know why the IndyCar Series will not race at the Milwaukee Mile in 2010. Frankly, it should not be a surprise to anyone who has been paying attention.

Dave Kallman of the Milwaukee Journal-Sentinel confirms the worst.

"...as much as the fans of the IRL race are devout, there aren't enough of them willing to buy tickets, and the event does not make money for the track."

If the Mile makes it to next season, then it will have NASCAR's Triple-A feeder series to thank. The IRL has failed in Milwaukee.

Milwaukee to Baltimore: the New Math

Meanwhile, attendance figures for the proposed Baltimore Grand Prix just keep getting better. Is it not amazing that the same series that couldn't draw in Milwaukee is going to be the most popular thing to hit the streets of Charm City since John Unitas?

Let's see. IndyCar attracted approximately 28,000 spectators at Milwaukee this year.

28,000 * 4 days = 112,000 fans for the Baltimore Grand Prix

2,000 crew, officials, vendors, volunteers, etc. * 4 days = 8,000 more in attendance

Total Baltimore Grand Prix Attendance = 120,000

Awesome!

Incidentally, the crowd at this year's Honda Indy Toronto was estimated at between 30,000 and 40,000 spectators. I can't find any records of public subsidies for that one. But we do know that the IndyCar teams incur the Toronto Tax as part of their engine lease payments to Honda.

Just think of the exposure. How else might Baltimore be seen on television by an audience like this?

Warning to the People of Baltimore

This race is a boondoggle. Most of the money that might be spent at the Baltimore Grand Prix would likely be spent in Baltimore anyway. This thing will generate less economic output than an Orioles' weekend series with the Red Sox.

Don't take my word for it. Ask the good people of San Jose. Check with the folks in Edmonton. Consult the Texas Comptroller of Public Accounts.

Ask yourselves the following question.

If IndyCar racing attracts so many spectators, then why is it being dropped by facilities that are in the business of promoting auto racing events? Why can't IndyCar earn a profit at the nearby Richmond International Raceway, or the Milwaukee Mile, one of the world's most historically relevant race tracks?

IndyCar racing is a market failure, a product that has been rejected by auto racing consumers in the United States. That is why it needs government subsidies for a minor league event at a glorified test track in Birmingham and for a contrived street festival in Baltimore.

This event will never be profitable, although the same might not be true of the promoter - that will depend on the amount of the government handout. Baltimore and the State of Maryland will subsidize this mediocrity every year for as long as it exists.

This IndyCar Series does not deserve the Milwaukee Mile. It certainly doesn't deserve to be bailed out by Maryland taxpayers.

Roggespierre

IndyCar TV Ratings: Oil and Water

2009-10-02T07:30:00.003-04:00

We have devoted much of this week to observing television ratings data for the IRL IndyCar Series. As Citizen John and VirtualBalboa have noted, meaningful trends are rather difficult to detect.

IndyCar broadcast network ratings excluding the Indy 500 are here.

Indianapolis 500 ratings are here.

Cable network IRL IndyCar Series ratings are here.

Breakdown: Similar Segments

That IndyCar cable television ratings decreased significantly this season is not in dispute. I have argued that Versus is not necessarily to blame.

The following line graph would seem to support my conclusion. It includes cable television ratings for the sequence of IndyCar races that has occurred since Mergification with ChampCar in early 2008. I ask that you examine the graph and look for trends.

Notice that the decrease began at approximately mid-season in 2008. The 2009 Long Beach race, the second event that was telecast on Versus, outperformed four races in 2008 that were telecast on either ESPN or ESPN2. In addition, this year's race at Texas was competitive with the later 2008 events that were telecast on cable.

Cable ratings have been decreasing more or less consistently for a season and a half. That would seem to constitute a significant trend, one that had been established well before Versus entered the picture.

A prior two-year spread is similar in appearance. Cable ratings for the 2003 and 2004 IRL IndyCar season are plotted on the line graph below.

Notice the similarity to 2008 and 2009. With the lone exception of the 2004 opener at Homestead, the general trend is downward. I would argue that 2003 and 2004 were very similar to the past two years.

Both segments were subject to market shocks. Mergification with ChampCar occurred prior to the 2008 season. Blendification with much of what had been CART similarly occurred prior to the 2003 season. Recall that it was then that Honda, Toyota, Target Chip Ganassi Racing, and Rahal Letterman Racing migrated to the IRL.

My hypothesis, therefore, is that in both 2003 and 2008, a percentage of the established consumer market for the IRL product rejected some of the product elements that had been integrated from CART and ChampCar, respectively. Similarly, a percentage of the consumer market for both CART and ChampCar rejected the proposition of watching their previously favored drivers, teams and constructors participating in the IRL.

Granted, there is some variability. Nevertheless, I believe that my hypothesis is reasonably persuasive.

Moving Forward

So, how did IndyCar exit the depression of 2004? In a word, Danica. The cable ratings spiked immediately after she led late in the race at Indianapolis as a rookie in 2005.

Apparently, the drivers in the cars do in fact matter. Regrettably, there are no Danicas on the horizon. In fact, there are few prospective IndyCar drivers from the United States. That does not bode well for the future of the IndyCar Series.

Roggespierre

IndyCar: IRL's Danica Nightmare just Beginning

2009-10-01T19:30:00.000-04:00

The Indy Racing League refuses to manage its product so that it might appeal to motorsports consumers in the United States. A natural and unpleasant result of that particular management failure is now in its nascent stage. It is shaping up to be a long-term nightmare for the IndyCar Series and the IRL Public Relations staff.

I am referring, of course, to the Danica to NASCAR story. Ten days prior to a three-driver shootout for the a season championship that consumers have deemed irrelevant, Danica to NASCAR is the undisputed Top Story in IndyCar racing.

Columnist Bill Center provides a solid summary in the San Diego Union-Tribune.

Danica to NASCAR: a Management Problem

Unless IndyCar teams hire compelling U.S. drivers, Danica to NASCAR will dominate all coverage of the league until she finally joins the dominant market leader on a full-time basis. Of course, most IndyCar teams are unable to hire drivers from anywhere because they require Piloti-shod financiers to fund their operations.

This is the fault of IRL management.

Management has mucked up the supply chain so badly that teams must pay the Motegi Tax, the Mid-Ohio Tax, the St. Pete Tax, the Toronto Tax, and the Formula Dream Tax in order to acquire underpowered, spec Honda engines. There is no price competition among makers of chassis and replacement parts because Dallara has a monopoly.

The teams are uninvolved in manufacturing the racing equipment. They must purchase everything. They are not permitted to manufacture, cooperate, and sell in order to recoup cost - not that they would do it if they could.

What do these factors have to do with Danica to NASCAR dominating press coverage of the IndyCar Series?

Everything.

IndyCar is not a consumer product because its costs are approximately five times greater than its value. Everything - from drivers to racing venues - therefore must in some way subsidize market failure. The formula favors international road racers and driver-financiers that can't be sold to a large U.S. audience.

No Stopping this Train

IRL Public Relations can not stop Danica to NASCAR. Do not blame PR.

Reporters are instructed to write and present stories that might attract a large audience. Danica to NASCAR is the only such story in IndyCar racing. Do not blame the media.

Tim Cindric wants NASCAR drivers at Indianapolis next year. Cindric is one of two team owners that can afford to hire driving talent from the United States. Why does he not do so? Why does he want others (NASCAR drivers) to solve the problem? Perhaps it is because that is the IndyCar Way.

The IRL is managed by Terry Angstadt, Brian Barnhart and Tony Cotman. Collectively, they have paved the way for the behemoth that is and will continue to be Danica to NASCAR. Why should they not be held accountable? They are the managers, after all.

They have inflated the cost of participation.

They have invited monopoly.

They have granted concessions.

They have elected to seek government subsidies rather than consumer acceptance.

They have earned the long Danica to NASCAR nightmare that is only now just beginning.

Roggespierre