Low TV ratings will cost IndyCar their Series Sponsorship (3rd Update)

Mark Miles – AR1.com predicted that persistent low TV ratings on NBCSN would eventually drain the IndyCar paddock of all sponsors. Miles and IndyCar now feel the same pain the team owners have been feeling for 9 years of the NBCSN contract

UPDATE Verizon has chosen not to renew its IndyCar entitlement deal that ends after next season, series CEO Mark Miles confirmed on Friday, making the telecom carrier a lame-duck partner for '18. Verizon’s deal is worth around $10M annually and started in ’14 after it replaced apparel company Izod. Miles had previously said that a renewal with Verizon was unlikely, but today marks the first time IndyCar is confirming that Verizon did not renew. The company is expected to stay in the sport via its team relationship with Team Penske, with whom its had a relationship for nearly a decade.

Miles said that IndyCar will immediately start searching for a partner, and will use the opportunity to try to package the entitlement rights as part of a larger buy with a brand who also wants to advertise heavily with its next media-rights partner. IndyCar’s media rights also expire after '18 and it is currently in talks with incumbents ESPN and NBC Sports, as well as other media companies. Miles expects to have the deal for U.S. media rights wrapped up by the end of this year.

Miles said, “Verizon has been a super sponsor and will continue to be so through all of next season. We appreciate that they reached their decision in a timely way so that we can thoughtfully and deliberately go back into the market for 2019." Verizon, which works with CSM Sport & Entertainment on its motorsports marketing, has undergone a host of exec changes in recent years and is also heavily focused on its large investments with the NFL and NBA. Adam Stern/SBD

09/18/17 This rumor is upgraded to 'fact' today. IndyCar CEO Mark Miles confirmed that Verizon is not likely to renew its title sponsorship of the series after it expires following the ’18 schedule. Miles said, “It's likely that the relationship will change, but we’re hopeful that (the relationship) will continue."

It is possible Verizon could stay on as an official telecom sponsor or in other ways as an advertiser in the sport. Miles did not give a timetable as to an official announcement, but he said he met with Verizon execs at the season-finale at Sonoma this weekend to try to sort out the situation.

Verizon’s deal with IndyCar is worth around $10M annually and started in ’14 after it replaced apparel company Izod. Team Penske, which saw Josef Newgarden last night claim his first IndyCar title, also has a longstanding relationship with Verizon, which has B2B deals with Roger Penske’s automotive interests.

That is likely to continue despite Verizon likely dropping the title sponsorship, sources have said in recent months. Verizon works with CSM Sport & Entertainment on its motorsports marketing, while Momentum is Verizon’s overall sports marketing agency.

Whether IndyCar has already started seeking out possible replacements for Verizon was unclear. Verizon did not immediately respond to a request for comment. Adam Stern/SBD

07/17/17 IndyCar CEO Mark Miles said renewal talks with title sponsor Verizon will begin soon, about 18 months from the end of the deal’s term reports Adam Stern of Sports Business Daily.

Verizon’s deal is worth about $10 million annually and expires at the end of 2018. It’s common for properties to be informed of a title sponsor’s future plans well in advance of a deal’s end date, given the length of time it can take to find a replacement.

Miles acknowledged that talks will get underway in the next few months, and believes it won’t be long before the sanctioning body knows which way negotiations are heading.

“This is a conversation that will start in earnest soon — and that we’ll have some clarity on before long," Miles said.

Miles, who is in his fifth year with IndyCar and also in the middle of media-rights negotiations with ABC/ESPN and NBC Sports, is hopeful of a renewal. But amid several executive changes at Verizon, multiple sources close to the deal said a renewal could be challenging to secure.

Miles conceded the “very significant change" in Verizon management since the two sides originally struck the multiyear deal in 2014. That includes the departure of former Verizon Wireless CEO Dan Mead, who helped strike the original partnership and was known to be a fan of racing. A source close to the deal said current executives at Verizon are split on the program. The source said Verizon Communications Chairman and CEO Lowell McAdam is among the current executives who support the sponsorship.

“We have an excellent relationship, the program has delivered what they originally had as their expectations, and we’ve not yet really started to have discussions with them about the future, so I don’t want to jump to any conclusions," Miles said. He touted the series’ growth prospects; ratings had been up multiple years in a row heading into this season, and the Indianapolis 500 has experienced an attendance resurgence that Miles has called a “really helpful and important achievement."

Verizon, which works with CSM Sport & Entertainment on motorsports marketing and Momentum Worldwide as its sports marketing agency, did not respond to a request for comment by press time.

Whether Verizon’s entire motorsports portfolio is up for renewal at the same time was unclear. Sources said Team Penske’s Verizon deal, which has a robust business-to-business element, appears to be safe. Those sources also said that Verizon could drop the title sponsorship but stay on as the official telecommunications provider of the series.

Miles added that “there’s never been anything in the relationship that was a speed bump; I think we’ve delivered or over-delivered, and they’ve done what they’ve said (they would) as well."

A source said that in IndyCar, Verizon intends to increasingly focus on its Hum product, which connects cars with the digital world, instead of on the overarching Verizon brand. Hum can provide drivers such services as emergency assistance, maintenance reminders and vehicle diagnostics. Verizon has been activating the Hum product in IndyCar in recent years, but that has been mixed in with a steady amount of pure Verizon brand marketing. Adam Stern/SBD

Mark Miles has to land a 100% network TV deal or IndyCar's future will be very very bleak

07/11/17

We have been saying this for 9 years now, and for 9 years it has proven true. Low TV ratings on NBC Sports Network are driving sponsors out of the IndyCar paddock.

Most of the sponsors are either Business-to Business deals or ride-buyer money. There are not many real sponsors left.

The well is almost dry.

The Hulman-George family has been using the money paid to the series by NBCSN to fund the IndyCar Leader Circle welfare program, but the result is that teams cannot land any good sponsor deals because of the minuscule NBCSN ratings.

Well now IndyCar is going to feel the pain in their own posterior.

This pennywise and pound foolish business strategy has led to new rumors that Verizon will severely cut back their sponsorship of Team Penske and they will also likely terminate their IndyCar title sponsorship after 2018.

Ouch.

Roger Penske is 80-years old. He spends a significant amount of his own money to support the IndyCar team and brought in the Verizon deal for IndyCar. When he retires we're not so sure IndyCar can survive.

Scott Dixon's car is rumored to still be unsponsored and the NTT Livery you see on it is a freebie thrown NTT's way by Chip Ganassi. Half the Andretti cars are unsponsored and the list goes on.

The only answer is for 100% of IndyCar races to be on network TV starting in 2019 when the current NBCSN deal ends, even if that means some of the races have to be a time-buy with IndyCar selling back the ad time.

Sponsors will not look at you if you are not bringing 1 million TV viewers per race.

Period.

End of story

There will not be a new engine manufacturer until that happens.

There will not be any big new sponsors coming into the series until that happens.

And to think, Liberty Media offered to buy the IndyCar Series from the family, but the family would keep their Indy 500. The family said no, so Liberty bought F1 instead.