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For Road to Indy championships to thrive, the business model must change

Norris McDonald
Written by Norris McDonald

As of this morning, IndyCar doesn’t have any title sponsors after this season.

Verizon announced earlier that it would not return as sponsor of the Big League after the final race in mid-September and Mazda announced Tuesday that it would no longer sponsor the Road to Indy undercard program – USF2000, Pro Mazda and Indy Lights – as of the end of 2018.

This is not the end of the world, although rival-for-eyeballs NASCAR has solid sponsorship for all three of its traveling series: Monster Energy, Xfinity and Camping World (soon to be the Gander Outdoors Truck Series).

But a title sponsor signifies that something has value and this is where IndyCar`s Road to Indy series might have some trouble.

Although Dan Andersen, of Anderson Promotions, said in Toronto in 2013, when his company formally took over the administration and promotion of the Indy Lights series, that he expected to be able to grow the number of entries in all three of the entities, it didn’t happen – particularly in two of them. And that has implications.

All three of NASCAR’s series have solid, full fields. Forty, or nearly 40, cars start every Cup race. The Xfinity stock car feeder series has 40 starters while the trucks series always has 30.

The  IndyCar series had 24 cars start at Mid-Ohio last Sunday but they are usually a car or two short of that. USF2000 had a solid 24 but Pro Mazda only had 14 and a mere seven Indy Lights cars showed up.

That is not good enough.

I know Andersen has worked hard to keep costs down. But when your entire business model is predicated on drivers bringing great gobs of personal money or sponsorship in order to drive the race cars, you are asking for trouble.

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Let’s look at NASCAR for a moment. Jeff Gordon and Dale Earnhardt Jr. got out just in time. The big money days in NASCAR are over. In Cup, the big teams – the Joe Gibbs’ and the Richard Childress’ and the Rick Hendricks’  – are all still able to attract sponsorship but not at the level enjoyed in years past. And with one or two exceptions,  year-long sponsorships are memories.

The key thing in Cup, though, is that the big race teams have commercial departments tasked with bringing in the money. Most of the drivers – the Denny Hamlins, the Jimmie Johnsons, the Kyle Bushes – are paid to race and don’t have to be out beating the bushes for sponsorship (although Kurt Busch, when he was having his contract difficulties with Stewart-Haas last winter, alluded to having to bring money).

In the Xfinity series and the trucks, though, most of the drivers are paying to race – like the situation in the Road to Indy – but the sums being requested are much less. And the teams are busy selling sponsorships too. Between team and driver, they usually can raise enough for a solid season and the numbers of car and trucks entered in races bear that out.

In fact, each of the NASCAR series is healthy enough to headline. While the Cup series was at Pocono last weekend, the Xfinity Series was the main event at Iowa Speedway. And the trucks will be the headliner at the Chevrolet Silverado 250 weekend at Canadian Tire Motorsport Park later this month.

None of the Road to Indy series, but particularly the Indy Lights, could headline a racing weekend.

Probably as many as a dozen drivers in IndyCar are bringing money or sponsorship. In Lights on down, except perhaps for Colton Herta, every driver is paying for his ride. And the difficulty for Andersen in dealing with the Road to Indy group is that none of those racing teams are working particularly hard to stand on their own feet, preferring instead to wait for the driver (or an angel like George Michael Steinbrenner) to pony up.

I know that is a flat statement. But I have had two good friends who were owners for years in Champ Car Atlantics and Indy Lights. In fact, one was out there in the beginning, when what was then called the American Racing Series was launched back in 1986. And neither one ever had anybody beating the bushes for sponsorship on their behalf. They waited for the drivers, and the money, to come to them. One used to get extremely angry with me when I would suggest he try to sell some sponsorship himself. “You just don’t understand,“ he’d say.

I understood, all right. I understood that the driver was not only paying for a race car and crew to be at every race that year, he was also paying for the infrastructure (the transport truck, fuel and repairs, etc.), depreciation of equipment, engine refreshes, traveling expenses for all (accommodations, meals), salaries and other expenses of the crew and a very good living for the owner, who was not taking any risk at all because of “crash damage,” which means if the driver smashes up the car, he has to pay to fix it. Oh, and if the driver won money, the owner got to keep it.

Nice work if you can get it, eh?

So it makes it difficult for Andersen Promotions, or IndyCar, or whomever, to go to potential sponsors and try to convince them they should sponsor a series that features a bunch of rich kids and very little commercial involvement. Sponsorship in the 2000s is much more than a name on a car or a series: it is return-on-investment and business-to-business and there can’t be a lot of that if there aren’t any businesses.

In 2005, when exactly four drivers entered all of the races in that year’s Champ Car Atlantics championship, one of the league’s owners, Kevin Kalkhoven, was so embarrassed that he went around in the off-season to all sorts of his moneyed friends and demanded that they spend some of their cash on racing teams for his series. In 2006, the very next year, 15 drivers entered all the races – a sizable improvement.

I don’t think Dan Andersen is in that kind of a position – or, presumably, he would have done this already.  But there could be an opportunity for him and his people to say to the owners currently racing, and others thinking of entering, that they will have to change their business models if they want to see the series they`re in move forward.

I know this is a tough nut. When Tony George started the Indy Racing League, he hired Bernie Ecclestone`s “North American guy,“ Jack Long, to get it off the ground. In a series allegedly geared for midget and sprint car racers, drivers like Eliseo Salazar, Johnny O`Connell, Buddy Lazier and Dr. Jack Miller were getting the rides. So I said to Long one time, over lunch: “Why aren’t there more sprint car guys out there?“  And he replied that the league could do a lot of things but it couldn`t tell an owner who to put in his car.

Well, if the Road to Indy is to continue, and to thrive, and to have value so that a company or corporation will want to sign on as title sponsor, this is going to have to change. The formula car way of doing business is dysfunctional and it`s time somebody forced it to move in a new direction.

Maybe now is the right time to do it.

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