Despite positive momentum in many areas, IndyCar continues to struggle to attract sponsorship. Even as TV viewing figures move (slowly) in the right direction and race attendances at many (but not all) venues increase, sponsorship dollars continue to be hard to come by.
For a championship always in need of more investment, the new-for-2018 universal aero kit offers plenty of scope to bring sponsors back to open wheel.
Recent seasons have been notable for the increasingly large areas of blank bodywork adorning championship teams. In motorsport this is never much of a surprise for the back of the grid squads struggling to stay afloat. IndyCar has been no different throughout the highs and lows of its checkered history. The past 12-18 months have however seen the scourge of blank bodywork creep its way up to the front of the pitlane.
Even IndyCar’s ‘superteams’ are hurting
Chip Ganassi Racing lost their synonymous Target backing leaving 4-time series champion Scott Dixon running races with inconsistent backing. No replacement appears to be imminent despite rumours linking everyone from Amazon to Uber with the team.
Team Penske appear to be much healthier with backing from Verizon, Menards and Shell/AAA. However the Verizon backing has at times been spread across 2-3 cars at a race weekend and with the telecoms giant widely believed to be strongly considering dumping their title sponsorship of IndyCar, Penske might not be immune.
For IndyCar’s other ‘superteam’ Andretti Autosport, the news is not much better. This season Andretti cars have run other Andretti branding or the ‘Check it for Andretti’ health message in lieu of sponsor branding. The Andretti message – created as part of the drive to raise awareness following John Andretti’s diagnosis with colon cancer – is an admirable one to promote. It is however pretty doubtful it is generating much, if any, revenue for the team.
Racing, safety and cost
The series has smartly put cost at the heart of the 2018 concept – alongside safety and quality of racing. All three are central to the continued growth and expansion of the series. Even more of IndyCar’s now trademark tight racing from 2018 onwards will, over time, draw new fans to the series. Thus attracting sponsors, generating revenue for the series/teams and raising average sponsorfees as a result.
But that will take time because it makes no difference how good the racing is if only a limited audience is watching it – either in the stands or at home on TV.
Reduce costs to attract sponsors back to IndyCar
Cost was a significant problem for the current bespoke Honda and Chevrolet aero kits. A complete kit for one car was believed to cost a team close to $350,000. When you look back at the propensity for the aero kits to be destroyed during races – particularly on street/road courses and at Texas – it is no wonder the cost of racing was (and probably still is) hurting teams.
Naturally those costs were passed on to sponsors and reflected in the fees charged at every level from a front wing endplate to a tiny logo on a sidepod. The low TV ratings (by mainstream sport standards) and mixed attendances (great some places, embarrassing at others) the cost benefit analysis for prospective sponsors was not particularly favorable.
The eye-watering cost of an IndyCar aero kit
Though exact figures are not available, IndyCar competition chief Jay Frye estimates that new kits will be 30-40% cheaper than the current versions and feature a guaranteed 3 year lifecycle. The latter in particular will help teams phase their costs over time and work on longer term financial planning.
The substantially lower cost for the new universal aero kit offering better looking and cheaper cars will provide teams with more scope to attract sponsors. Bigger brands will see a better payoff for title or associate sponsorships of teams and drivers.
This will come irrespective of how much TV and race day audiences figures increase in the coming seasons. Similarly smaller brands with aspirations might find IndyCar is now within their reach and in context, offers excellent exposure to audiences across North America.
The new 2018 aero kit will not be a panacea for all of IndyCar’s ills. It will contribute to tackling each of them and in the case of helping attract sponsorship back to the series, it has the potential to contribute a great deal.