IndyCar Hits A Home Run

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One of the worst kept secrets of 2019 was made official yesterday, when it was confirmed that NTT would become the title sponsor for the IndyCar Series. OK…there was one surprise. We had all assumed that it would be NTT Data coming on board. Instead, we learned that it would be their parent company; Nippon Telegraph and Telephone Corporation (NTT) assuming the role of title sponsor for the NTT IndyCar Series. About ten days ago, Adam Stern of SportsBusiness Journal reported that IndyCar had been in advanced talks with NTT Corp about taking over as the title sponsor, after the deal with Verizon expired at the end of 2018.

NTT

While everyone was breathing a sigh of relief that someone had been found to replace Verizon and most were very excited about it, there was a pocket of fans – you know, the Legions of the Miserable – that was fretting on social media about having a title sponsor that few people have heard of. If you find yourself in this group, I wouldn’t be worried.

I wrote a post on Dec 3, speculating who the sponsor may be after Stern was a guest on Trackside. When he mentioned that it could be a B2B (business to business) company, I feared that many fans would be upset that the new title sponsor would be a company that the general public did not recognize. While some were hoping that Amazon or another consumer based company would jump on board – that didn’t seem likely. Besides, consumer brands as title sponsors haven’t always worked out so well in the recent past.

Although it was met with great fanfare at first, I think most would agree that the tenure of FedEx as CART’s title sponsor was a disappointment. Pep Boys and IZOD didn’t work out so well for IRL/IndyCar and I won’t even give a second thought to Northern Light and their short time as title sponsor.

On the NASCAR side, after Winston was legislated out of their thirty-five year stint with the Winston Cup Series – they were with NEXTEL that was eventually bought by Sprint. When Sprint pulled away after the 2016 season, they struggled to find a deal that even came remotely close to what Sprint had been paying. They finally settled on Monster Energy Drink for the 2017 season as their title sponsor. Two months into the deal, Monster announced an extension through the 2019 season. For 2020 and beyond, NASCAR is taking a different approach. They will no longer be seeking one sole title sponsor. Instead, they are splitting up their sponsorship into categories. That will be interesting to watch how that plays out.

Between IZOD, Pep Boys, FedEx, Sprint, Verizon and Monster – most are consumer-based. FedEx probably comes the closest to a B2B brand, but they also do a lot of retail business. Sprint and Verizon obviously do a lot of corporate business, but they sure market a lot to the general public. Winston, IZOD and Monster are all pretty much aimed at consumers.

Winston was a different animal because tobacco companies had huge budgets and limited places to spend them. Sports sponsorships were one of their few choices until all tobacco advertising was outlawed permanently, well over a decade ago.

So if you take Winston and their massive pot of tobacco money out of the equation, I’d say that the most successful sponsor partnership between NASCAR and US open-wheel racing was between CART and PPG Industries – which was pretty much a B2B sponsorship.

B2B marketing programs are more targeted than consumer-based programs. While the number of potential customers for consumer-based companies like Amazon, Verizon or Coca-Cola might be many – companies need to snag a lot of them in order to make a dent in market share. B2B companies take a more segmented approach. While the number of potential customers for companies like Mi-Jack, NTT Data, ABC Supply or Gehl maybe limited and may not sound very sexy to the average fan; they tend to get a lot more bang for the buck for their motorsports dollar. Why? Because they can focus on their end-customer a lot more directly than consumer-based companies can. B2B companies leverage their time at the race track on race weekends a lot more effectively through their hospitality efforts.

It was had for Verizon or IZOD to entertain most of their excellent customers at race tracks, simply because their customer base is so massive. It has to be for them to survive. But B2B companies may have the same sized bottom line, yet their customers and potential customers are far fewer but have greater buying power.

As we learned yesterday, NTT is a world power. They are a subsidiary of Nippon Telegraph and Telephone. NTT Data employs roughly 275,000 people worldwide and more than 50,000 in the US alone. They did over $100 Billion in US dollars in revenue for Fiscal Year 2016 – and yes, that is billion. They may not be a household name to the casual fan, but they are a powerful global company with a lot of financial stability. More US consumers have probably heard of Monster Energy Drink, but what did that level of familiarity do for NASCAR? Not much.

Quite honestly, I’m thrilled to have NTT come aboard as the title sponsor for IndyCar. I could be wrong, but I see this as having the same long-term potential as PPG had in CART. Subsidiary NTT Data has reportedly been thrilled with their involvement in IndyCar thus far with Chip Ganassi Racing. They have gone from being a one-off sponsor for Ryan Briscoe in the 2013 Indianapolis 500 to sponsoring Briscoe full-time for the 2014 season, to sponsoring Tony Kanaan from 2015 through 2017, while sponsoring both Ganassi cars in the latter half of the 2017 season. They remained on the No.10 car for Ed Jones in 2018 and supposedly will remain on the car of Felix Rosenqvist for this coming season as they step up to be the title sponsor as well. They have apparently seen a favorable return on their investment and see IndyCar as a valuable marketing tool.

Don’t discount the fact on what this does for races in certain markets. It has been no secret that the IndyCar race at Texas Motor Speedway has been on shaky ground. Their subsidiary and Ganassi sponsor, NTT Data, has their US headquarters in nearby Plano. Look for that presence to bolster attendance and sponsorship at what many consider to be the second-most important race on the IndyCar schedule. With their worldwide headquarters in Tokyo, it doesn’t hurt the chances for a return to Japan. While many don’t consider that important, it is in the global economy that IndyCar is involved in. With Honda and Firestone parent company Bridgestone both based in Japan; I think a race in Japan in the near future is very likely now.

Most men that are superficial like me can relate to chasing after the best looking girl in school. If we were lucky to even get them to look our way, there were times when it didn’t take long for the good looks to give way to a fickle and essentially unlikable personality. We would later find out that the sexiest girl was not near as important as one with solid values.

While many were hoping that IndyCar would land a well-known company like Amazon or Apple, I think the chances are good that those companies would become dissatisfied and leave about as quickly as IZOD did. Much like the beautiful girl in the above paragraph, the glamorous name is not always the best fit. I think time will prove that Mark Miles has hit a home run by landing NTT. Welcome aboard!

George Phillips

18 Responses to “IndyCar Hits A Home Run”

  1. I hadn’t thought about how this could impact Texas. Good point, George. Not sure if the whining about the company was as loud as the whining about the logo.

  2. Agree about logo there, pit. I hope they have a race in Japan again, it was weird hours here but the Japanese public seemed to really support Indycar.

  3. BrandonWright77 Says:

    I’m in both camps, but mostly in the “this is a big plus for IndyCar” camp. A well-known name like Amazon or Apple adds some credibility that the general public can instantly recognize, but as you pointed out those companies typically don’t do much more than offer their name and some money.

    From what I’ve read, NTT is going to be bringing a lot of tech to the series and a lot of it seems to be aimed at improving the fan experience and that probably has a better chance of landing new fans than a company name alone. They also have a shedload of money to put behind this venture.

    The best news, the mobile app will no longer be useless to anyone who isn’t a Verizon customer!

    Overall, really great news for IndyCar, even if it resulted in a mediocre logo.

  4. James T Suel Says:

    I have to agree that NTT is a good thing for IndyCar. Your point about Texas is spot on.

  5. Paul Fitzgerald Says:

    George…I believe NTT is a great move. My question to you is, are you one of those that think that the Texas race is the 2nd most important race on the calendar? I’m not sure I would put put it in the top ten. It has declining attendance, it sometime has become a scary wreck fest and I guess other than Indy I’m not a fan of ovals especially after what happen to Wickens last August. Surely, Long Beach would almost be anyone’s number two wouldn’t it?Anyway, great new with NTT.

    • BrandonWright77 Says:

      I’d never heard Texas referred to as such either. Texas would be pretty far down my list in fact (not that I don’t enjoy the race, just don’t see it as having high importance). I would also put Long Beach as number two, it has a lot more history and glamor to it than Texas.

    • I think it’s important, but not sure it’s Number Two. At one time, it had the second-highest attendance behind the Indianapolis 500. It’s still a high-visibility race – as proven by the act that ABC chose to show it on prime-time network TV just a few years back. I do think that if Texas ever fell off the schedule, it would be a tremendous blow to the series and many of its fans. Although oval attendance is sagging, oval racing is in IndyCar’s DNA. I’m not crazy about the high banks at TMS but I always look forward to that race. This may be a topic worth exploring further in a blog post sometime soon. – GP

      • BrandonWright77 Says:

        I do usually enjoy the race, some of the most memorable oval races in recent memory have happened there. And the crowd used to be great, but now it suffers a bit from the Indy effect where even 30,000 people looks like the place is empty. I’d say Texas is probably the second most important oval race, but not second most important race overall. It’s an interesting topic, as to what race would be ranked second to The 500, but might have a different answer for every person. At least we can all agree on what #1 is.

  6. billytheskink Says:

    Alas for NTT, the Texas race is currently title-sponsored by a competitor, DXC Technology (who is surely grandfathered in as a car and race sponsor in the series). DXC also employs a lot of people in the Dallas-Fort Worth area owing to the fact that part of the company used to be EDS. Funny enough, NTT Data is headquartered in Plano because they absorbed Perot Systems, meaning that both DXC and NTT’s Texas presences were founded by Ross Perot… who also sold much of the land that Texas Motor Speedway is built on to SMI

    That doesn’t prevent NTT from buying hospitality space and using the Texas race as a platform, of course, but until DXC’s sponsorship deal is up, they won’t be able to make it their “home” race quite like Honda does at Mid-Ohio or Chevrolet does in Detroit.

  7. Chris Lukens Says:

    I am torn between voting “outstanding move” and “to soon to tell,” although I lean to the former. As far as needing a recognizable name for the series sponsor, I will admit that even though I followed CART for many years, I had no idea what a “PPG” was.

  8. I do think Texas ranks as the #2 race on the Indy Schedule. Losing Texas would be a major blow to Indycar.

    As for NTT, how do we really know if its a great fit and an outstanding move today? The evidence is not there yet. We can hope, but time will tell. We will see.

    • Bruce Waine Says:

      How do we know if it is a great fit and an outstanding move today?

      From RACER.com, January 15th 11:50am:

      Mark Miles “We take 50 million data records off the cars in an average two-hour race. To me that’s content.

      With NTT we can make that usable and compelling content for fans that will continue to grow the sport and attract younger fans.”

      Tony Kanaan — who drove an NTT DATA-backed Indy car during his time with Chip Ganassi Racing — agreed that the (NTT DATA) company’s tech provides a perfect step to drive Indy Car’s fan experience forward.

      “In the past I developed this shirt, we call it the heater shirt, but that’s just the technology they can bring to the series,” said Kanaan. “I mean, the shirt was something that was amazing when we launched that it could actually read my heart rate while I was in the car.

      “A company (NTT) that spends $4 billion in R&D a year, I think it has a lot to bring to the series.

      You know, it’s a lot of familiar faces. I have good friends at NTT, so I’m really excited for Indy Car.

      It shows how strong the series is and how good of a job Mark Miles and his team with (vp of competition) Jay Frye turned it around — as soon as we had a title sponsor leaving, and in four months to turn this around and have this announcement today, so really excited.”

      • Yep. I know. Hope Springs Eternal.

        If the euphoria of a major media announcement can be believed, the IndyCar Series had one of its most important days on Thursday when Izod was confirmed as its new title sponsor.

        IndyCar and Izod are looking for big things together as evident by a flashy news conference at Indianapolis Motor Speedway, which saw a fashion show with models wearing the apparel of Izod.

        Izod is calling this the “Fastest Race on Earth,” and it plans to be “very aggressive” with spots on all of the ABC/ESPN channels and as many of Comcast’s as possible. Comcast owns Versus, which airs most of IndyCar’s races.

        Izod said the key to the deal was being able to use the speedway’s 100-year history, both literally and figuratively. It will display historic cars in store windows and the drivers in promotions.

        “It’s what we’ve been waiting for,” Hunter-Reay said. “It’s a fresh start for this series.”

        “Verizon is delighted to become the title sponsor of the IndyCar series and to bring even more of our innovative technology to the fans, to the teams and to the entire motorsports community,” said Dan Mead, president and CEO of Verizon Wireless.

        The partnership announced Friday includes network coverage upgrades to Indianapolis Motor Speedway, as well as enhancements to IndyCar’s race control and new pit lane monitors. New York-based Verizon, the largest U.S. cellphone carrier, also plans to enhance connectivity for spectators at domestic races.

        “The intersection of racing and technology has never been more relevant, and our expanded partnership with INDYCAR provides a unique opportunity to demonstrate that synergy, integrate new services like LTE Multicast and help propel the sport forward.”

  9. NTT seems genuinely interested in their commitment to the series. It is indeed a major international company with thousands of employees here in the US. I think the future is bright.

    I too am hoping this signals an eventual return to racing in Japan for IndyCar.

  10. well, how MUCH did NTT pay for the privilege?
    this maybe a Monster Energy discount deal.

  11. Totally agree. Indy car is a good thing for NTT. For NTT I would say its a great move.

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