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The Champ Car Panoz were subsidized by the 3 amigos. Actually most were owned by the series and leased to the teams.....and we all know what happened after a year of that program.Quote:
Originally Posted by Mark in Oshawa
I agree that racing is expensive and if you can't afford it get out.
but
Can the IRL stand a total rebuild if the sponsor situation doesn't improve significantly?
You are right, but there isn't just one cut-off level (success/failure). We are talking about companies who want to sponsor race cars here. And there are marginal levels there as well. So yes, the successfull companies will be the ones sponsoring cars. However, if you now go and impose 3% more taxes on them what are they going to do with their racing sponsorship?Quote:
Originally Posted by Jag_Warrior
Hint: do you think that the budget they allot to the sponsorship is more or less than 3% of their profits?
I can only tell you that no one related to the IRL or its teams has approached the company that my pal works for and I used to work for (AFAIK). It's not a big one, but Kevin and DeLana got that deal, so too late now. I'm sure they're asking some companies. But what are they asking for? Whatever you ask for has to be within reason. Gerry Forsythe once insisted that he was NOT going to accept a primary sponsorship for less than a certain amount of money ($5 or $7 million... I can't remember which). I understand these guys have to meet the costs of running, or they might as well sit at home. But what have I been saying for about 8 years now... that everyone continues to gloss over? As much as everybody loves to talk about cutting costs and making things affordable, you also have to make sure that there is a sufficient amount of value in what you're selling. It's the value side of the IRL (and the old CCWS) that has suffered. Cutting costs is great. It's great that you got the costs down from $10 million to $7 million (for example). But you're still not going to get someone to give you $7 million for something that has a market value of say, $3-$5 million. My uncle is all gaga trying to get me to meet him in Arizona so we can look at these "great deals". There's all these "$250K houses that can be bought for $95K or less." I don't give a flip how much it cost to build them three or four years ago (and I'm sure it was $200K+)... all they're worth now is what the market values them at: $95K +/-. And that's not my idea of a great deal.Quote:
Originally Posted by Mark in Oshawa
The TV package doesn't work. OK, why doesn't it work and what are they going to do about it? Seriously. Why are the ratings, mainly for Indy, down so much year-to-year? That's not a question for you or me, Mark. We can speculate, but we don't REALLY know. That's a question that any meaningful sponsor is going to ask when approached, and I'm not sure that anyone within the IRL or its teams has a believable answer to it.
I'm not doom & gloom. I just watch the races when it's convenient. And after that, on the track or off, what happens happens. I don't have a dog in the fight. But like with any business that has fundamental issues, the economy isn't going to "fix" the IRL's problems, because the state of the economy isn't the root cause of the IRL's problems, IMO.
No, it's not so much that they want to sponsor race cars. They want to invest in marketing activities that produce some sort of meaningful returns... whether it be racing or additional ads on Dancing With the Stars. When I went to that thing in Charlotte, a lot of the companies present were new to racing. They were just on a fact finding mission. But they came to see it as the next big thing, because NASCAR was still growing very fast back then. And the thing with NASCAR is and was: fan loyalty to sponsoring brands is nothing short of amazing. As much as we may like to poke fun at DanicaFan, he is close to the typical hardcore NASCAR fan - and that gives a sponsor a warm feeling as they write that check.Quote:
Originally Posted by chuck34
A 3% increase or decrease in MARGINAL tax rates would not affect profits by 3%. But I do understand your point just the same. A "meaningful" increase or decrease in net profits is likely going to affect decisions made on costs. True. And as has been said, sponsorships are costs/expenses related to advertising and marketing. We can look at Dupont. When sales fell dramatically, they had to sharply decrease their marketing costs last fiscal year, to the point that Jeff Gordon even offered to take a salary cut. A lot of other companies did the same. So yes, they were looking at costs. But they were also looking at the returns on whatever dollars they were still spending. For probably a quarter of what they spent in NASCAR, they could have easily had a fully funded IRL team (or maybe two) instead. Why didn't they, or any of the other major NASCAR sponsors make that move? ;)
Would a 3% +/- adjustment in the marginal tax rate affect SOME racing sponsorships? Maybe... possibly in some marginal cases. I doubt that it would mean anything off the margin, but I don't know that for a fact. What I do know is that if one series typically and consistently offers a higher ROI than another series, no matter what the marginal tax rates are, that series will have fewer issues finding sponsorships. The demographics for the sponsor that Kev and DeLana got WOULD have been ideal for open wheel... years ago. Now, who knows what the demographics for open wheel even look like? I have no idea. About all that's being discussed is letting the Bush tax cuts expire. So answer me this, did IRL sponsorships suddenly go through the roof when those cuts were enacted and have they remained at some high level, or has sponsorship basically followed the same downtrending line as the ratings and viewership??? I think the correlation (and also the causation) relates more to that than the marginal tax rates.
Also, I think back to when McLaren-Mercedes got tagged with that $100 million fine a couple of years back. On a board where I used to post, some fans speculated that McLaren and/or Mercedes would/should come to Champ Car. For $100 million, they could have bought CCWS a few times over, right? They meant well. But as fans often do, they were thinking with their hearts and not their heads. McLaren-Mercedes had no more intention of coming to CCWS than Dupont does of coming to the IRL... or than I do of scampering off to Arizona to look at a bunch of foreclosed houses that are probably still selling for more than they'll be worth in 6 months. The government can cut my tax rate in half, but a bad investment is still a bad investment, and I'm not going to do it. And neither is any CEO who enjoys being employed.
I get your point about ROI. And yes the ROI on the IRL isn't as good as it should be right now. We all see that. But the ROI isn't going to increase by much in the next few years, no matter what anyone does. A new TV deal won't help that (besides the TV deal itself is a factor of the ROI), TG being run off didn't help that, unification didn't help that, and cost cutting hasn't helped that. So we are where we are. Therefore a 3% increase in taxes (yes I know what marginal tax rates mean, I worded that badly last time although the point is still valid) will only HURT sponsorship on IRL cars.
So the question really is how do we increase the ROI of the series? I would suggest, looking at the evidence, that we should stop with all the "cost cutting" measures, allow anyone who wants to make a chassis, engine, or any other widget to make them. Sure it will hurt in the short term by driving up costs a bit (maybe), but it's the long-term health of the series that we need to look at. Facts are facts, fans are more and more turning off "spec" series. Look no further than NASCAR's decline in TV and attendance. F1 is very popular worldwide, and the ALMS seems to still have a pretty good following despite amazingly low car counts.
Quote:
Originally Posted by Mark in Oshawa
I'd love to say that to Vasser. Its 100% the truth.
All Vasser has done in 2010, is take a lot of very good cars with very good equipment and tear it all to hell because he took 3 driver's BIG checks (all over 5 million dollars) instead of doing what professional race owners are SUPPOSED to be able to do...find the money for YOUR team and hire the drivers (instead of the other way around).
Vasser has a horse-**** team now and he and Kalkhoven are the ones that have to take the blame for it.
Quote:
Originally Posted by Scotty G.
Just like all the NASCAR teams...........Oh.......Sorry.
The best that I can give you, Chuck, is that anything which affects the overall economy MAY affect IRL sponsorships. So yeah, a company that now says, "No!" may end up saying "Hell no!" if business conditions get worse.Quote:
Originally Posted by chuck34
I don't know why NASCAR's numbers are down. The COT is quite ugly, IMO. But at the same time, one driver and team has been completely dominating the series. F1's TV numbers fell off the longer Schumacher dominated that series. So while there may be a correlation to spec racing and falling popularity, I don't know that there is causation.
As for what the IRL can do to increase ROI, since I have no idea at this point, I'll just agree with whatever ideas you may have. My idea of enlisting some Zetas to kidnap high profile NASCAR drivers' family members, forcing them to race part time in the IRL and at the Indy 500 might be considered a bit radical. Short of that, I am a believer in the power of prayer. So I'll suggest that too.
Scotty, that is assuming someone was going to give him the 5 million to put the car on the track. Corporate America quit doing that a long time ago with IRL/CART/CCWS teams. You think Vasser just fell out of an apple tree on his head yesterday? I know he is taking the money hoping like hell one of these idiots can win a race or two and get him some legitmacy before they destroy everything but that is the reality. KK didn't get rich by being stupid Scott. You think he wouldn't rather do it the other way? God knows he saw how the CCWS imploded.....it cost him a ton of money and yet he sticks around trying to make things go.Quote:
Originally Posted by Scotty G.
I aint saying you are wrong in ride buyers being a problem, but it isn't a problem if you pick the ones with talent as opposed to just money. on THAT, Vasser and KK are idiots because I could have told them both Sato was out to lunch and Viso was a loser.
The sad part is though Scott, and here is where you theory falls apart, is a guy like RHR isn't getting the support from Corporate America outside of IZOD and THAT wasn't supposed to be what it is turning into. PT, the most marketable name from CART's era and the CCWS cannot get funding from anyone in America for a full time ride, yet gives some of the best press interviews and is likely the best guy to have creating press for the circuit. Corporate America, which gives millions to idiot basketball players who barely can speak the language wont give it up for a Canadian who is as brash and entertaining as any American. What is more, they wont give it up for a talented young guy like Reay or Rahal. Don't tell me they haven't tried looking either.....If the companies wont back the drivers, and they wont back the teams...it leads us back to they wont back the series.
So easy to say (and post) for someone who doesn't have to do it or risk anything...Quote:
Originally Posted by Scotty G.