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Is title sponsor in 500's future?: Indy Racing League throttles up sales efforts, considers aggressive new marketing deals

May 21, 2007

The Indy Racing League is overhauling its sales effort, an initiative industry observers said could lead to an eight-figure annual title sponsorship and exponential growth for the league and its teams.

Officials for the company tabbed to lead the revolution said there isn't any sponsorship deal that won't be considered by Speedway brass, including a title sponsorship for the Indianapolis 500, a sacred property once thought untouchable.

Race fans have been focused on the Brickyard's 2-1/2-mile oval this month. But off the track, IRL officials have taken a step that could launch the league into a new era, signing a multi-year deal with Indianapolis-based Just Marketing International to help it with corporate sales strategies.

Just Marketing officials say bringing in a Fortune 500 title sponsor willing to pay more than $10 million a year will be a top priority. The sponsor, JMI officials said, must make a multimillion-dollar commitment to promoting the series in addition to what it pays the league directly.

As part of the deal brokered by IRL founder Tony George, Just Marketing will help set up IRL's sales staff and aid it with industry prospecting for team, driver, series and track sponsorships.

Already, IRL officials have hired Greg Gruning to the new position of vice president of sales. Gruning, a veteran of NASCAR sponsorship sales, began May 21.

"We think we've positioned the series and its teams for significant growth," said Terry Angstadt, president of the IRL's Commercial Division. "It's not going to happen overnight, but over the course of the next year or two, I think you're going to see some serious growth in terms of sales and marketing."

Blowing out old ways

Just Marketing President Zak Brown, whose company brokers $300 million in sponsorships annually in NASCAR and Formula One, promised to blow up the IRL's current sales strategy, which he calls nonfunctional.

Demonstrating to potential sponsors how their investment can boost sales is critical, Brown said.

The league has selling points that haven't been emphasized, he said, like its strong demographics among women, its technological leadership, and its "clean and green" relationship with fuel provider Ethanol.

Brown's staff will be instrumental in showing the IRL how to close sales and ensure that sponsors promote the league, he said.

The IRL will pay Just Marketing a flat fee, plus a commission on all sponsorships it helps bring to the table. Brown said the deal has the potential to bring his firm a healthy eight-figure annual revenue bump when the relationship matures. His company reported more than $55 million in revenue in 2006.

"No one needs to question my motives," Brown said. "I think there's money to be made here for everyone. The Indy Racing League is a very fertile property. We just have to change the way they take it to market."

Brown promised to work just as hard to bring sponsors to teams, drivers and IRL race venues.

"We're not here just to prop up the sanctioning body," Brown said. "We have to make this series stronger from top to bottom."

Double-fisted approach

Brown and George became friends over the last year. When George asked Brown to consider helping the IRL with sales, Brown insisted on a no-holds-barred approach.

"I can't have any arms tied behind my back," Brown said.

Just Marketing's client list includes Crown Royal, Johnnie Walker, Hyatt Hotels, Subway, Brut, Direct TV and Field & Stream magazine.

Brown was instrumental in carving out several new sponsorship categories for NASCAR, including ushering in an era that allowed hard-liquor makers into the paddock.

Brown, a California native and retired racer, moved to Indianapolis to be close to the city's motorsports scene. But he's never brokered any IRL sponsorship deals.

And he won't likely bring any of his NASCAR and F1 sponsor clients to the IRL.

"In some cases where it makes sense, we might have that conversation, but I'm not here to force the Indy Racing League on my clients," Brown said. "Sponsors don't often change platforms."

Instead, Brown said, he will dedicate six to 10 of his staff, including upper managers, to presenting the league to a new corporate audience in a new way. Brown also promises to get the eyes of more mainstream media on the series and its drivers.

Kiss rocker stays

Just Marketing will not replace Hollywood-based Simmons Abramson Marketing Co., which was hired last year to head up marketing and public relations.

Some sports marketers have been critical of Simmons Abramson, saying it's done nothing tangible for the league besides developing the tag line "I am Indy."

"Gene Simmons is a great door-opener and a very intelligent marketer," Brown said of the former Kiss rocker who heads up Simmons Abramson. "In some cases, we will work with them."

Team owners have largely embraced the changes.

"Very few people in motorsports have a longer list of contacts than Zak Brown," said Doug Boles, co-owner of Indianapolisbased Panther Racing.

Boles thinks the series' revved-up initiatives are coming at the right time.

"I think the series and its teams are better positioned for sales and sponsorship growth than it ever has been," Boles said. "We have a TV package with ABC and ESPN in place through 2009 and a stable engine and sponsorship deal with Honda. The landscape is as stable as it's ever been."

Despite growth, boost needed

Already this year, several new sponsors-including Aamco, Citgo, Petron and Hitachi Power Tools-have come into the league.

Indianapolis Motor Speedway President Joie Chitwood said the first weekend of qualifications pulled in a good crowd and that there's more "buzz" surrounding corporate hospitality at the track this year.

Speedway officials don't release attendance figures, but veteran motorsports journalist Robin Miller estimated the Pole Day crowd at no more than 10,000. IRL officials said attendance was much higher than that.

Though there will be serious bumping this year for the first time in close to a decade, some industry observers said several of the latecomers will not be competitive on race day. Miller calls for increased purses to draw more and better teams, including star drivers from Champ Car and NASCAR.

Brown said improvements are definitely still needed.

"The product is awesome, but they can do a hell of a lot better than they are today by going to the marketplace in the right way with the right people," Brown said. "I want to see the Indianapolis 500 have a TV rating back to a 10 or 11, and I think that's possible."

An 11 rating by New York-based Nielsen Media Corp. would mean about 11 million households nationwide were tuned into the race, double the current audience.

Brown also said the IRL needs to consider tweaking its 17-race schedule, get into more of the major media markets advertisers desire.

"It's good to see this series finally getting serious about sales and marketing, and bring someone in with a strong motorsports background," said Dennis McAlpine, president of Scarsdale, N.Y.-based McAlpine & Associates, an entertainment and sports business consultancy. "If this initiative has the desired effect, and with the changes made I think it has a chance, it might mean the dawn of a new era for this series."
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