Editorial

2005 is a foundation laying year for Champ Car
 
by Mark Cipolloni

 January 23, 2005

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Just out of bankruptcy, 2004 was a survival year for Champ Car.  By the end of 2004 the naysayers had put away their death of Champ Car proclamations and were figuring out a way to remove the foot they had stuck in their mouth.

During the off-season Champ Car began to lay their foundation for the future.  Based on recent moves by Champ Car, and other strategic moves yet to take place, Champ Car is poised to complete that foundation by the end of 2005.  From here 2006 looks to be far brighter and far more organized.

Positive Changes

Personnel: In the past two months Champ Car has made a number of staff changes, hopefully for the better.  But that's not all.

Domestic TV: Although late in coming together, Champ Car's 2005 TV package is the best it has had in over five years.  CBS is back on board with four races and even NBC will air three races.  SPEED Channel will air the remaining 7 to 9.

International TV:  In Europe Champ Car will be on Eurosport in almost 100 million homes.  Eurosport has added a 2nd channel called Eurosport 2, effectively doubling their inventory of available time slots to show Champ Car races live.  Nearly all races will be shown live on one of the two stations.  TV deals are still coming together for Latin America, South America, Asia, Mexico and Canada. Champ Car in '05 will reach far more households than it did in '04.

TV Production:  Champ Car has retained Molson Sports and Entertainment to do the TV production for 2005 and beyond.  After the hack job done by Betelgeuse last year, making the Champ Car races almost unbearable to watch, in Molson Champ Car has a company that understands how to do sport TV production.

South Korea: The Ansan, South Korea race will not only bring NAFTA sponsors into that market, but it will expose the Korean companies to Champ Car.  With Champ Car's solid array of NAFTA races, I expect we will see some of these Korean companies enter the series in coming years to reach the all-important NAFTA market, i.e. the Koreans want to sell product in North America, a lot of product.

China:  The rumored Beijing, China race has the potential to be the biggest boost for the series in the next five years.  Beijing will not only bring NAFTA sponsors into that burgeoning market, but it will expose the Chinese companies to Champ Car.  With Champ Car's solid array of NAFTA races, I expect we will see Chinese companies enter the series in coming years to reach the all-important NAFTA market, i.e. the Chinese want to sell product in North America, a lot of product.  If Champ Car eventually has a Chinese driver in the series, this race has the potential of drawing a bigger attendance than Mexico City someday. 

South America: Some sponsors like Ford want Champ Car to race in South America.  Although beset by economic woes in recent years (both Argentina and Brazil), there are signs of a solid economic turnaround.  Buenos Aires is a city looking to put itself back on the map and Champ Car's strong international TV package will bring the exposure they seek in all the major markets worldwide.  Ditto for Brazil where Champ Car, though not as popular as it once was, still has a strong following.  If Cristiano da Matta comes back to Champ Car as rumored, and joins the likes of Bruno Junqueira and Mario Haberfeld, Champ Car's popularity will once again rise in Brazil.

True Global Sports Property:  Can Champ Car, a NAFTA based series, be a true global sports property? Do NAFTA sponsors care about overseas races?   Sponsors stay in F1 and spend big money. F1 isn't just "European" money.  CART was so poorly mismanaged, and the international TV package so poor in the past, they could not market themselves as a global sports entity. In 2005 Champ Car will have a proper international TV presence so companies can use that to get the word out about their product. Now the question is whether Champ Car itself hires the right marketing and sales staff to capitalize on this....and how long it will take to build a global awareness.

There simply are not enough domestic dollars around to make Champ Car successful as a "NAFTA" only product. Ditto for the IRL. NASCAR has sucked the USA (and soon NAFTA) market dry. A real hope for Champ Car is international money, if it has the right international platform.

As long as every race is televised and a sponsor's name is seen by the demographic of people they are trying to reach, it does not matter whether the race is in Oshkosh or Beijing. TV reaches far more people than the people at the actual race track. Sure, you must have fans in the grandstands, but if I am a sponsor, those 50,000 to 100,000 pair of eyeballs is dwarfed by the tens of millions of fans watching on TV.

Champ Car must have the right marketing people in place who can sit down with the sponsor rep and explain the "vision" and benefits to them of a global series, but that they still reach the specific markets they want through TV, regardless of where they are racing this week. It comes down to good TV production and a solid TV reach into both domestic and foreign markets. There are still "plenty" of races in the NAFTA market to reach the fans at the race tracks in North America. Champ Car has excellent NAFTA venues and that will soon get even better, but TV is the key to global sponsor exposure.

Champ Car vs. F1: The difference between F1 and Champ Car is that Champ Car delivers far more NAFTA race markets than F1 does. While both are international, Champ Car has a home-base in NAFTA while F1 has a home-base in the EU. That is the difference and sponsors can choose one or both series, depending on what markets are most important to them. Champ Car is also far less expensive than F1, so if it reaches a lot of the same markets, the potential to deliver a better return on investment is there.

Better crop of drivers:  Until Champ Car re-establishes itself as a flourishing sports property, some teams will continue to rely on ride-buyers to exist.  However, already we are seeing a better talent pool of drivers eyeing Champ Car and this is an important factor in rebuilding the fan base.  You can't make a hero out of a wanker but you can develop a great racing driver into a hero-figure.

Still some major hurdles

Retaining Long Beach: Champ Car's biggest race is up for renewal after this year.  The IRL wants it.  Can Champ Car get a renewal? Losing Long Beach will be a major public relations blow for Champ Car.  The next big battle between Champ Car and the IRL is indeed Long Beach.  Champ Car appears to have the upper hand right now.  The Long Beach City Council does not want a switch to the IRL, but Dover Motorsports is the promoter and they could sign a deal with the IRL.  Can Champ Car get the renewal they seek?  The motorsports world is watching.....

No Title Sponsor:  Champ Car still doesn't have a title sponsor which underscores the fact that sponsors are still sitting on the fence waiting to see if Champ Car is indeed out of hot water and on its way to success.

Healthy teams:  As it stands now, there are 10 confirmed seats in the Champ Car series for 2005: Dominguez (HVM), Paul Tracy and Rodolfo Lavin (Forsythe Racing), Alex Tagliani (Rocketsports), Jimmy Vasser (PKV Racing), A.J. Allmendinger and Justin Wilson (RuSPORT), Gaston Mazzacane (Dale Coyne), Bruno Junqueira and Sebastien Bourdais (Newman/Haas). There are also as many as nine possible openings still up for grabs, however, a great many of those are dependent upon adequate sponsorship being found.

Healthy promoters:  Having promoters who can make a profit on their Champ Car event is a key ingredient to solidifying the race schedule.  It's hard to build a fan base in a city if the venues are continually changing.  NASCAR had a staple of races that were held on the same weekend for decades.  Only recently, after it established a huge fan base, did NASCAR start changing their schedule around, primarily to make room for new, bigger races. Both Champ Car and the IRL have had a big turnover of races since the split, owing to a drop in popularity of Champ Car when Tony George created the IRL, split Indy Car racing in two and destroyed the once hugely successful sport.

Meaningful engine manufacturer support:  While Ford is helping Champ Car, since Honda, Toyota and Mercedes left the series, the paddock has become noticeably poorer.  Gone are the majority of sponsors and the hospitality facilities that they bring. The car companies have very deep pockets and they help a race series in many ways - from track signage and corporate hospitality (both help race promoters) to TV ads, magazine ads, newspaper ads and team financial and technical support.  Despite all the "evil" that goes with this money, manufacturer support is a key ingredient to all successful racing series. There isn't a single successful racing series that doesn't have car manufacturer support.

Think like a true Global Property If Champ Car wants to become a true global sports property it had better start thinking and acting like one.  Why go back to Europe, to South America, South Korea or China if you are going to continue to conduct yourself as a domestic racing series?  The entire organization, from the head office right down to the mechanics must understand the vision, the goals.

Only 14 races :  To date Champ Car has announced just 14 races, the same as last year, a bankruptcy year.  Races in Argentina and Beijing are rumored and Road America is still out there, but 14 races does not put Champ Car in front of their audience enough and provide their sponsor the type of exposure NASCAR does racing 38 weekends per year.  Just another reason why NASCAR is stealing sponsors away - good exposure week in and week out.

No Superstars:  As we have stated on numerous occasions, every successful sport has superheroes.  Champ Car currently has none, hence why attendance and TV ratings are down.  There is very little marketing of the drivers and Champ Car doesn't seem to have a clue how to engage sponsors to use their drivers in their advertisements.  One of the secrets to NASCAR's success has been their ability to convince their sponsors to help make the drivers superheroes.

Re-Sign Ford:  Why hasn't Ford re-signed with Champ Car?  Did they scare away that manufacturer too?  If our sources are to be believed, they will be back on board for at least one more year, and possibly three, but why is it taking so long?

Need more teams: Champ Car is in need of more new teams.  The cost is not very high right now but still rumors of possible new teams have gone silent.  That means Champ Car is not able to convince team owners to invest in them. The goal should be 28 cars, preferably 14 two-car teams.  More teams, each with their own PR and marketing staff, puts more people out there looking to bring sponsors into the series and getting the word out about their team, their drivers and the series.

2007 cars:  First we were led to believe that Champ Car would adopt all-new cars for 2006, but now that is delayed until 2007.  The existing cars are getting old and tired.  New cars and possibly new engines always generate renewed fan interest.  After all, Champ Car is not IROC, but given all the teams will use Lolas powered by Ford Cosworth makes it appear that way.

Improvement in TV Ratings:  In order for Champ Car to become a "hot" property to sponsors, the TV ratings will have to improve.  In the world of sports marketing and advertising, TV ratings are king.  Low TV ratings mean no sponsors and no TV advertising revenue.  Individual TV ratings by country are important to generate TV ad revenue in each market, but Champ Car must get a handle on its cumulative worldwide TV ratings because the cumulative rating dwarfs just the USA rating and this number is important to sponsors who have their name on the race car.  Those sponsors want to reach as many eyeballs as possible.

Conclusion

While Champ Car is laying a solid foundation for the future, there are still many challenges ahead.  But compared to this time last year when the vultures were circling CART's dead carcass, the future looks better than it has in a long time.

The author can be contacted at markc@autoracing1.com

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