Auto Racing Attracts New Breed of Corporate Sponsors
SO you thought baseball was the Great American Sport? Think again. At least 70 million Americans will tune in their TVs to auto racing this year. And that's just fine as far as Corporate America is concerned, for motor sports have a big advantage over the nation's other traditional pastime. You can't stick a corporate logo on the jersey of a ballplayer, but you can plaster decals all over an Indy car, bringing your corporate name into clear view of the television cameras.
That's why 165 corporations have signed on as sponsors this year with one of the nation's premier motor sports associations, Championship Auto Racing Teams, Inc. Among the many events under the CART umbrella are the Indianapolis 500 and the Detroit Grand Prix.
``This sport is fueled by corporate sponsors,'' beams Kevin O'Brien, CART's director of marketing.
Now auto racing has traditionally had an image as the sport of good ol' boys, and that's traditionally attracted a ``manly breed'' of corporations: Budweiser, Marlboro, Valvoline Oil, and Chevrolet.
Don't call it Bubba sports anymore, however, for the word has gotten out that nearly half of CART's fans are women, and even the men are likely to wear white collars and ties, rather than overalls.
That's why a new generation of sponsors has entered the fray, corporations like McDonalds, Toshiba Electronics, K Mart, even L'Eggs pantyhose.
Take Arie Luyendyk. This year's winner of the prestigious Indy 500 was driving a car sponsored by Dutch Boy Paints.
The payoff, says Michael Roman, K Mart's director of marketing, is substantial: ``We measure the amount of time the name K Mart appears on screen and we get a very substantial dollar return that way.''
For a team that sponsors one of the top contenders - the one the TV cameras will be focused on - that can add up to a lot of air time. Such was the case with Al Unser, Jr., who led the Indy for most of the race over Memorial Day weekend. If his sponsor, Valvoline, had to pay for all the time its logo was on screen, it would have had to shell out nearly $6 million at commercial advertising rates.
Although the television exposure as a sponsor does not carry a selling message as a 30-second commercial would, ``people see the name Valvoline ... and name recognition is quite important,'' says Rickey May, sports marketing director for Valvoline.
As far as automakers like Chevrolet are concerned, name recognition is everything, hence the old adage ``Win on Sunday, Sell on Monday.''
There are other payoffs, too. A corporate sponsor can call on its drivers for personal appearances. His likeness can adorn products and promotions.
Now all these benefits don't come cheap.
The cheapest way to get into the picture is by sponsoring a trophy or some other race-specific promotion. That could cost upward of $10,000. But getting your name linked to one of the racing teams is a far more expensive proposition.
It can cost from $4 million to $9 million to field a car during the CART series, far beyond what even a winning team would likely earn from championship purses.
To defray that cost, the average team may sign on a half dozen or more sponsors, with the lead corporation kicking in anywhere from $750,000 to $3.5 million for the privilege of placing its decal within clear view of the TV cameras.
A corporation may shell out anywhere from $150,000 to $1 million more to sponsor a specific race, such as the Valvoline Detroit Grand Prix.
That may seem like a hefty chunk of change, but it hasn't cut down on the list of corporate sponsors who will this year shell out more than $95 million on the CART series alone.
``We've been doing this for 28 years,and we've increased our budget every year,'' says Valvoline's Mr. May. ``We wouldn't continue to invest if we didn't feel we were getting our money's worth.''