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

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

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

Can IndyCar Sell at New Hampshire?

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

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

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

Who wants to Promote Edmonton IndyCar?

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

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

Benefits of Pricing IndyCar to its Market Value

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

Mainstream Media: Where are Indy's Americans?

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

Bernard must shift gears to grow IndyCar

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.

1. Low cost basis
2. Little or no direct competition
3. 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!!!

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!

Two IRL Advisory Board Reps Revealed

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

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

Thanks to this article in the Indianapolis Star, we know that the board will include the following.

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

The list has the makings of a good start for the following reasons.

• Looney's job is to ensure that all factions are heard.
• Team owners are rightly included because new equipment will require significant capital investment on their part.
• We shall assume that "marketer/promoter" means "race promoter", one who assumes the financial risk associated with operating an IndyCar event. Certainly this is a constituency that must be given ample consideration.
• Engineering consultation is essential because the car must be safe, fast and functionally efficient. We should also hope that this particular engineer is adept at cost analysis.

What's Missing?

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

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

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

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

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

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

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

Roggespierre

IndyCar: The Task at Hand

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

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

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

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

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

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

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

Thought to begin Indy Idea 2010

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

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