The Sponsorship Dollar

[TheGspot]

I seek your words of wisdom...
How do these teams and individuals go out and raise the funds to race. Are there people or agencies that they employ to do such things and if so who are they.
Not that I have any interest in racing just pondering the emotional toil on the teams to raise funds.

[05forever]

G,
Most top level team themselves have deciated business or marketing people that obtain sponsorships. A lot of the smaller teams rely on driver funding, self funding or the backing of supporters within their own industry.

I represent a number of individual drivers and riders and have access to a couple of teams for finding sponsors. There are a number of inividuals and a couple of companies that do similar things. What is fast becoming passe is the fact line "give me $x and you will get your name on the car". The dollars involved in most motor racing are such now that the competition for those sponsorship dollars from other sports make it a hard sell. An example may be that $500 would fund a top level Konica ride totally this year and you would get say 80% of the paintwork but that would also get you the naming shirt sponsor of half the rugby league teams in the comp. giving much more exposure.

We generally charge a lot to obtain sponsors anywhere between an upfront fee of $1k-5k and 10%-20% of the number. Historically when you get the right product and sponsor it is all very easy and you might not feel we deserve the fee. The issue is the 10 or so times we do all the work for no result.

The other issue is timing, teams should be fully funded by now and preparing to hit the market in May for 2004. The issue is that many are not by either poor planning or unfortunate circumstance, this makes it considerably more difficult.

email me at sponsorship@feedback.com.au if you want any further info.

[TheGspot]

So where do compnies such as yours find the dollars from the corporate world. I guess my question is how do you find them, how do you pitch to them and how do you decide the right targets.

Are you working on any deals currently or have you finalised the 2003 season.

[05forever]

We usually have steady contacts with a lot of large companies that we can pass stuff thorugh but also do some relationship building with new targets or companies if we think we have a product or proposal that can work for them. there is a lot of protection of money that is "in play". Corporate invites and schmoozing is the order of the day. But there are many worse ways to make your money than taking people to motor races.

I have a few things going still this year. I am trying to get some personal sponsorship for Casey Stoner in motogp, trying to finalise backing and an offer for Alex Yoong to drive enduro's and some testing if his open wheel deal doesn't come off, there are some local guys I am helping and some funding top ups for a couple of racing teams. But I am also really tring to line up some bigger funding and marketing plans for '04.

decidiing the right targets is a big thing, some sharks will do what they can to grab the bucks in a marketing plan that just doesn't work for the sponsor. What that does is ruins the sponsor for anyone else in future that may have a plan that works. Only try and place funds where you can be reasonble confident that the value prop is sound. For example most companies will have some listed sponsorship criteria, privately they will also have target markets and divisional priorities. The personal contactensures that yo can know these and self assess a pitch before you put it. If you continue to pitch anything that comes across your desk at everyone you know,nothing will be taken seriously.

Evryone and me included get a lot of no's that is the nature of the business. The issue is to never put a proposal that you are not proud of it standing up on its merits. There are enough reasons business's have to say no without you helping.

[TheGspot]

Thanks for the reply,
When you say top up deal that obviously means extra funding to get through the season..are there many teams that work that way...i mean underfunded at the start of the year with the hope that people like yourself can help out.

I realise that teams like HRT and others have no funding issues even for there Konica cars but hw about the mid fielders.

I have been gathering information for the past 2 days and GTR magic tells me yesterday that the HYG outfit has sponsorship issues. That surprises me.

When you read that do you ring them and offer to help as a way of gaining business.

[moffman]

Just a quick question 05 why did corporate Australia waste a golden oppurtunity with Marcos Ambrose when he was killing 'em in the U.K?

[05forever]

same reason that webber had to be bailed out by Campo before anyone would help, the same reason bright came home and the reason it is harder to raise money for Casey than a midfield Konica team.

Outa mind and outa sight.

Australia has relatively few large international companies and a fairly stable (travelwise) population. Sponsorship is by definition the payment of money to obtain the commercial rights and intellectual rights to and event or product. Quite simply the few companies with international profiles we have cannot generally get a commercial benefit out of backing them. Fosters is perhaps the exception but they are absolutely bombarded by requests.

These guys were technically after more of an altruistic donation so they could continue to climb the ladder. But with no TV, few aussies attending etc it was hard to justify. I have been knocked back by some of the biggest coys for Casey just for that matter. I have been working on a couple smaller and one major prop that I am excited about and we will see how that goes.

In terms of Overseas companies sponsoring stuff, they have much bigger markets, have a more mobile popluation that visit the many european events and have a longer tradition of getting financially behind their people. Also the amounts dont scare them as much because of the size of other sports like soccer etc.

There are also some colourful stories of the way some deals are structured that would generally be frowned upon in Aus.

[MaxSport]

05forever-

I am an agent here in Indianapolis. While I don't usually post here on the OZ V-8 board I had to reply after I had read what you said.

We have been doing this for 15 years. Sponsorship for Indycars,some NASCAR and a little bit of sportscar racing as well.

Except NASCAR- everything else is very hard to sell here. The problem with NASCAR is that you need 10m USD -or more- these days.

Roadracing in the US does not have nearly the sponsorship that your V-8 Supercar series does. Most of the deals that do get done have leverage involved (a retailer like K-Mart and their vendors who pay for the program in exchange for shelf space) or are about hospitality for corporate guests.

Bowling gets better TV ratings than Indycars,CART or the ALMS. So "exposure" is not what you want to talk about when asking for a seven figure number.

BTW-I charge 3K USD a month for 50% of my time. This is a refundable draw against a 20% commission.

What does it cost to do a year in OZ V-8s? Forget driver salaries, just the cost for a team with a shot at success.

Kurt Maxwell
MaxSport
Indianapolis,IN USA

[05forever]

Hi Kurt,

There is a fair amount of speculation at the number to run at the pointy end. One team HRT has dominated the series for the last few years and have generated anywhere between $19-25 mill in merchandise sales and will their sponsors on top of that there is a guess that they have no budget as such but have the ability to do all that is required.

The number that is regularly trotted out is that a top team last year (not HRT) spent $4.8 Million on a two car team, this would be reasonable in terms of the majority of other teams spending around $1.5-$2 Mill a car. Over here the V8's are the big daddy of motorsport but the sophistication of leverage and marketing is only just enetering into the field.

It is hard convincing a team that a $750K sponsorship will get them on $500K on the car and the rest will go into making sure the sponors is promoted correctly during the season. The sad analogy I use is that the $500k might be the ticket to the fairground but the $250k buys you the rides and people remember the rides more than the animal attractions.

Kmart have done a similar thing over, as have Betta Electrical.

Interesting about you fee structure, not totally dissimilar, do charge a production fee to the client for any media you may need or produce?

[Crash Test]

Did I hear correctly when somebody said that motorsport in .au attracts about $AU680mil in sponsorship each year, something like three times that of the next best backed sport?

[pete55]

I guess spread over all the classes in motorsport that would seem about right to me. V8 teams would take a large percentage of that followed by speedway second i would think then probably Procar classes and Drag Racing.

[Crash Test]

I'm not sure if it would include things like event sponsorship etc.

[05forever]

The numbers I have were from 2001 calendar year. The figures are direct economic activity. not airy fairy - this many people must have come from here and there and spent $X on accom and $Y on food mutlplier by Z etc.

So basically sponsorship, and crowd attendence dollars and any other income streams like merchandise and TV money - the injections that make the thing happen.

Motorsport in Aus = $490Million
Supercars (main) = $190Million
AFL = $98Million
Rugby = $95Million ? (memory fading)
League = $90Million

Horse racing is bigger than anything but that has Betting revenue to the clubs included. Also the sheer number of events make it hard to top. I cant remember the number for it.

[eltong]

I'm a Kiwi driver based in the U.K. I'm trying find someone own would be interested in representing me down under as it is very hard to be based in the U.K. and still keep track of things downunder.

If there are any suggest or interested parties, I can be contacted at elton@n-i-r.fsnet.co.uk. I also have a web site at www.eltongoonan.co.uk

Thanks

[hearwegoagain]

05 forever is your best bet.
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