Brickyard 400 and NASCAR and Indianapolis Motor Speedway and Naming rights/sponsorships and Sports Business

IMS officials to revamp Brickyard 400

July 30, 2011

Indianapolis Motor Speedway CEO Jeff Belskus has an ambitious plan to “rebrand and reposition” the 18-year-old Brickyard 400 in a bid to fuel big attendance increases beginning next year.

“The race will have a whole new look and feel,” Belskus said.

Though most of the changes will start next year, some of his plan will be evident at this year’s race July 31.

Jeff Belskus Speedway CEO Jeff Belskus has a plan to grow the race crowd by 10 percent.

For example, Belskus brought in Big Machine Records earlier this summer to help sign top-flight entertainers who will perform on race day and the day before the race.

And on July 28, Norwalk, Conn.-based Crown Royal whiskey was named the event’s title sponsor beginning in 2012.

With the help of Crown Royal, Belskus also is launching a large-scale marketing plan to promote the event locally and nationally, with a special emphasis in five to seven key regional markets.

Earlier this month, he finalized a deal to add NASCAR Nationwide and Grand Am sports car races to the Brickyard weekend in 2012, meaning the Speedway’s oval and road course will be used during the same weekend for the first time.

The concerts and new races will “add value and broaden the fan base,” Belskus said.

While Belskus said he doesn’t anticipate any more changes to the 2012 event, he said he’ll continue to consider additions or alterations in 2013 and beyond to fortify the race and ensure its long-term financial health.

Facing a decade of attendance declines, Belskus said a Brickyard 400 overhaul was one of his top priorities when he took over as Speedway CEO for Tony George in July 2009.

“In 2009, we sold half as many tickets as we did in 1999,” Belskus said. “That’s a painful trend.”

IMS doesn’t divulge attendance numbers, but NASCAR estimated 2010 Brickyard 400 attendance at 140,000. Attendance was 180,000 in 2009, 240,000 in 2008, and 270,000 in 2007.

In an attempt to halt the slide this year, Speedway officials dropped ticket prices by $20 in several grandstands. General admission tickets—introduced in 2010—were reduced from $40 to $30 in advance and $35 on race day.

But large swaths of seats are expected to remain empty, prompting officials to close the G Grandstand and portions of other stands in the third turn, on the north and south ends of the track, and Pit Road Terrace.

The majority of NASCAR races during the last three years have seen double-digit attendance drops, according to NASCAR officials. But the Brickyard 400 is a leader in attendance declines, industry experts said.

While Brickyard 400 attendance declines started in the late 1990s, Belskus said they were accelerated by the tire problems that occurred in 2008, when teams were forced to pit every 10 to 15 laps to replace shredded tires. The post-2007 economic swoon hasn’t helped.

Race still profitable?

It took a while for IMS officials to admit publicly there was a problem. In 2006, IMS made it known for the first time the Brickyard 400 wasn’t sold out, even though Belskus says now that it hadn’t been a sellout since 2003. That lack of disclosure hampered the Speedway’s ticket sales efforts, he said.

In May, George, who is still a board member of the company that controls the track, said during an interview on WFNI-AM 1070 that the Brickyard 400 would be profitable if the stands were half full.

“For sure it makes money,” George said. “And it’s good for the city.”

Belskus declined to say if the race remains profitable, but added, “It’s still a good event for us.”

Clearly, though, the race that debuted in 1994 isn’t nearly as lucrative as it was during the early years, when various industry sources estimated it brought in more than $35 million a year for the Speedway.

There are some signs the bleeding is slowing if not being outright stopped. Ticket sales this year are “in line with last year,” Belskus said. Ticket renewals for this year’s race, he added, were above 80 percent.

Merely stabilizing ticket sales doesn’t satisfy Belskus.

“My goal after this year is double-digit [percentage] growth,” Belskus said. “That’s not an unrealistic goal for this event.”

Mel Poole, president of Charlotte, N.C.-based Sponsorlogic and a 20-year veteran of the NASCAR sponsorship business, thinks outreach is a good idea.

“NASCAR fans drive and they camp,” Poole said. “I look in the parking lot of the Charlotte Motor Speedway on [NASCAR] race weekend, and I see license plates from 35 states. If they market the event right, NASCAR fans will come.”

brickyardThis year, Belskus and his lieutenants have started expanding entertainment options by bringing in a lineup of rock and country music talent, including Hinder, Rascal Flatts and Reba McEntire. He promises more of the same in coming years.

Crown Royal to the rescue

In July, Belskus wrapped up a two-year quest to replace Allstate as the race’s title sponsor. Crown Royal signed a five-year deal that sources valued at $15 million over the life of the contract. The total would be split equally between a cash payment to IMS and money devoted to promoting the race.

The race will be renamed to allow Crown Royal to incorporate the name of a hero into references to the event. The standard marketing line would be Crown Royal Presents “Your Hero’s Name Here” at the Brickyard. The hero could be someone well-known or someone more obscure, such as a soldier or police officer.

Belskus said the marketing dollars Crown Royal has agreed to spend are more important than the cash infusion.

“Crown Royal … will be quite aggressive,” Belskus said.

Race fans won’t have to wait until next summer to see the ad campaign. Crown Royal plans to help with ticket renewals later this month, Belskus said. The campaign also will be visible during the first and second quarters of next year.

Crown Royal also will bring a big group to the track next year on Brickyard 400 weekend for corporate entertaining, Speedway officials said.

Despite the challenges the race faces, it remains a big economic driver for central Indiana and an event local tourism officials are eager to help save and grow.

“It’s the second-biggest single-day sporting event in this region next to the Indianapolis 500,” said Chris Gahl, Indianapolis Convention and Visitors Association spokesman.

The NASCAR race’s economic impact is more than four times greater than a men’s NCAA Final Four weekend, which has a $40 million economic impact, Gahl said.

NASCAR contraction looms

Though the IMS is on a year-to-year contract with NASCAR to hold the race, and NASCAR officials are starting to consider shortening their schedule after a new TV deal is inked in 2014, most think the Brickyard 400 is safe.

“This is an important market for us, and [the Brickyard 400] remains one of the premiere races on our calendar,” said NASCAR CEO Brian France.

The sheer volume of NASCAR fans in central Indiana make it a key market for the circuit. In a city-by-city comparison, more people in greater Indianapolis watch NASCAR races than in any other U.S. market other than Charlotte, N.C., according to New York-based Nielsen Media Research.

Many NASCAR drivers are cheering for Indianapolis to stay on the stock-car calendar.

“Everybody wants to win at Indianapolis,” said NASCAR driver and native Hoosier Tony Stewart. “There isn’t a NASCAR driver alive that doesn’t want to kiss that yard of bricks.”

Sponsorlogic’s Poole pointed out that the Brickyard 400 still draws one of the biggest NASCAR crowds. The Brickyard for years had been No. 2 in NASCAR attendance behind only the Daytona 500, but in recent years, it has slipped behind the Irwin Tools Night Race at Bristol Motor Speedway in Tennessee.

While race fans in recent years have complained that the relatively flat track at the IMS isn’t conducive to stock-car racing and that there’s little passing, Poole thinks that’s NASCAR’s problem, not the Speedway’s.

“That’s an issue series-wide,” Poole said. “The cars and their aero packages need tweaking to encourage closer running and more passing. Obviously, you don’t change something as iconic as the Indianapolis Motor Speedway.”•

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