The Relative Levels of Sponsorship Costs
Although exact sponsorship costs vary, some generalizations about the cost of motorsports sponsorship can be made. First off, although most people think that motorsports sponsorship means sponsoring or co-sponsoring a race car team, there are other options available.
For example, companies can sponsor race tracks in much the same way they sponsor other sports stadia - (e.g. Staples Center in Los Angeles). Two good examples are Infineon Raceway, which used to be known as Sears Point Raceway, and the world famous Laguna Seca Raceway is now known as Mazda Raceway at Laguna Seca.
Also, individual event sponsorships are available. This type of marketing which was pioneered in NASCAR is growing in popularity in other race series as well, most notably the Indy Racing League.
Some examples are The Serius 400 at Michigan International Speedway or the EA Sports 500 at Talladega Superspeedway in NASCAR, and The Toyota Indy 300 at Miami-Homestead Speedway or the Belterra Casino Indy 300 at Kentucky Speedway in the IRL.
Also, keep in mind that when sponsoring a race car team, it's not just the car that is emblazoned with your corporate logo, but the team uniforms, driver's race suit, pit equipment and team transporters as well. These 18-wheelers are an important factor that is often overlooked. In essence they are huge rolling billboards for your company that rack up hundreds of thousands of miles while crisscrossing the country (or countries) traveling from race to race.
The more traditional avenue of sponsoring an individual car/team works out, generally, in the following ways:
- NASCAR, traditionally one of the most expensive forms of racing sponsorship... in the neighborhood of 14 to 17 million dollars a season for a primary sponsorship. NASCAR has consistently grown in both its appeal and its popularity, which raises both its level of exposure as well as potential costs. Although the cost of sponsoring a team is relatively high in comparison to other forms of motorsports, one must remember that sponsoring a NASCAR team only gets your logo on the car, crew uniforms (including the driver) as well as race team transporters. NASCAR sponsorship does not include the costs of corporate hospitality. That is an event handled on a race by race basis and is a cost over and above the cost of team sponsorship. For a business that is directly marketing to consumers, this may not be as high a concern as a company wishing to use motorsports as a venue for B-to-B relationships, corporate promotions or business rewards programs.
- Sponsoring an IRL team costs in the neighborhood of 5 million dollars, and it does have some factors that make it attractive to a wide variety of businesses and particularly corporations. First off, the IRL has a more corporate hospitality-friendly environment. In most cases, team sponsorship includes corporate hospitality. So, taking a group of prospective clients, or well established business partners as your guests for a 3-day weekend at an IRL race to enjoy the speed from a luxury corporate compound becomes a very attractive proposition. Also, the IRL features the Indy 500, one of the best known sporting events in the world, and the world's largest single day sporting event. The IRL is an open-wheel racing series, and is more high tech than NASCAR. It features wheel-to-wheel racing action and close finishes.
Other IRL venues, most notably the street circuits, are very well suited for corporate events and tie-ins. Also, the high tech nature of the IRL makes it a prime contender for technology oriented sponsorships. The IRL has made a world-wide name for itself on being very friendly towards sponsors and their needs concerning advertising, promotion and furthering B-to-B relationships. For a high tech company, the corporate suite overlooking the start/finish line at an Indy car race has been a very good place to be. - Champ Car/OWRS (formally CART) is a notch up from the IRL in terms of technology, but the sponsorship costs are relatively equal between the two. OWRS is a higher tech alternative to both the IRL and NASCAR, with the added feature of running on a much wider variety of race venues. Some of these settings, most notably the street circuits, are very well suited for corporate events and tie-ins. Also, the high tech nature of OWRS makes it a prime contender for technology oriented sponsorships. OWRS has made a world-wide name for itself on being very friendly towards sponsors and their needs concerning advertising, promotion and furthering B-to-B relationships. For a high tech company, the corporate suite overlooking the start/finish line at a OWRS race has been a very good place to be.
- In Formula 1 racing, the costs of team sponsorship are astronomically high, but there are some very important factors to bear in mind. First, remember that operating a front running F1 team for one season is about as expensive as building a new major league baseball stadium. So, don't expect to get your company logo on the side of a West McLaren Mercedes for mere hundreds of thousands of dollars, but more in the tens-of-millions of dollars. Mitigating these high costs is the unparalleled amount of market penetration and spread that F1 enjoys. Only World Cup Soccer and the Olympics have a bigger viewing audience than F1, and they don't happen 16 times a year, year in, year out. Yes, the costs in F1 are measured in the hundreds of millions, but the season-long TV audience is measured in the BILLIONS. Literally! If you want to advertise your company's products or services to the whole world, do what Vodaphone did, and sponsor Ferrari.
