The Approved INDYCAR CEO Business Plan

Ok, I have to bring the truth to light as I have not been hired or even contacted for the most “thankless job” on Earth. But, on that note, here I present to you my “Moving Forward” plan to run INDYCAR on a 3-year timeline. This plan would be examined at that time to assess sucesses and failures. If 50% of this plan comes to fruition, I will resign from my entrusted post. The success rate expected should be at 80% which is an above-average grade and therefore could be considered successful. The plan cannot be altered from this 3-year span in order to give it time to work.

Growth:

The sport has been staganat for almost a decade and it appears that last year the overall fan perspective (live attendance and TV Ratings) dropped from 2011. In order to immediately stop the “bleeding” and bring more eyeballs to the sport, this 3 points would be established:

  1. The current TV package with NBC Sports Network (NBCSN) is not bringing our great brand to mainstream America and Western Hemisphere. After 4 years, the ratings are still way below as the Network is hard to reach by the casual fan. The proposal is have NBCSN immediately move to 1st tier status on all TV carriers. This will allow ANY casual fan to actually have the NBCSN channel on its basic cable package. If NBCSN cannot do this, then INDYCAR will move to a buyout option to move its property to its cable channel of choice.
  2. If option #1 is no, then this option will move INDYCAR brand to ESPN 2 which has the reach of basic cable. There would be some money given by INDYCAR to buy our way into the channel but more of this “investment” would be to bring spinoff programs to market the sport (read more under Marketing). The agreement would be that ESPN will pay more as years are added to the contract based on TV Ratings previously agreed (ie: Year 1 ESPN agrees to pay 60% of production costs but, if TV ratings are not met then the Network pays 100%) . This would ensure BOTH parties have invested interests to grow and market the sport.
  3. All racing venues would be working under the “same” TV contract format for Sanctioning Fees. This will allow everyone the opportunity to assure to grow the sport to avoid “penalties” or obtain “gains” based on crowd attedance at each race based on pre-determined standards. (ie: TMS hits 90,000 and above and it will receive a 25% discount on sactioning fee credit – received after race confirmation but $1.5MM fee is payable by October 31st of the previous year when season schedule is confirmed).
  4. No TV contract would be longer than 5 years giving INDYCAR and the Network time to value the property as it grows or diminishes. The only option to cancel this contract is by a “Buyout” option that has to meet (or fail) some pre-established standards.

Marketing

The sport has the most diversed and fastest drivers in the world and yet they are not marketed properly. The IndyCar 36 program from NBCSN is an on-track marketing tool that is brilliant and yet it does not reach the drivers households and interest in a “full-blown” Reality Show format. The Marketing Startegy needs to move at the same rythm as society’s interests.

  1. Through the Los Angeles Marketing Office establish a Reality Show which will evolve not only on racing season but most importantly in the Off-Season. There in lies the interest and important stuff for an IndyCar driver outside the track. The program’s Premiere target date should be by the INDYCAR World Champioship race at Auto Club Speedway.
  2. INDYCAR will hire/promote a Spectacle Marketing Director (SMD) that will work with EVERY racing venue to assure the brand is marketed as needed based on the 3-Know-Your-Brand Way: (TV ads, Radio Drivers Interviews, Downtown Exposure). (The monies potentially come from the reduced sanctioning fee obtained on the Growth Section).
  3. Sponsor activation will matter as much as cashing a big check. The sponsor would be on contract that the “investment” would include a Marketing section that will empower them to market the series and the drivers. The amount should be 25% of the agreed total money used equally each year on contract. This would work on a credit basis as the SMD will receive and approve the event and spending in conjuction with sponsor (ie: 5-year $50M contract which $12.5M would be exclusively for Marketing purposes; Auto Club uses $1M on TV ads and SMD approves the credit toward MAVTV).

Competition and Innovation:

INDYCAR’s history and legacy has been that innovation was by far the biggest attraction to fans and manufacturers around the world. As the sport started the road to spec racing everything fell off. Even though this is the 3rd and final assessment on the INDYCAR plan, it is actually the root for the previous two to work. All manufacturers agreements would be for 3 years. No contract can be canceled before the 1st year is completed and has to be approved by the Competition Committee.

  1. Open competition is OK for up to 3 manufacturers for engines, chassis and tires. Safety will still be the main barometer when reaching the competition levels at each car area. The Safety standards will still be headed by the Competition Committee and its Director.
  2. Each manufacturer’s team selection allows up to 3 teams of their choice and then, based on car count by December 31st, the alloted percentage cannot be over 40% of the field. Therefore after each manufacturer determines its 10% of the field, the rest would be filled based on FIFO standards (First In – First Out) by the previous year’s final entry standings. No applying team should be left without any part.
  3. Engines will still be “Production Car” relevant therefore V6 powerplant, turbocharged, and using 97% Ethanol fuel would be required.
  4. Chassis would be permitted but following the “Safety Cell” concept already in place. Aero kits will be allowed within the manufacturer of choice, including those already on the chassis the team signs a 3-year contract.
  5. Tires would also be regulated to comply with Safety Standards but testing would be more recurrent paid in full by team/manufacturer combination on 1st year entering INDYCAR. This fee will decrease toward team/manufacturer by 10% each year based on improved safety track record until reaching 70%. The other amount would be paid by the sanctioning body.
  6. Each manufacturer would be required to promote 2 races of their choice (based on INDYCAR Growth Plan) and supporting the event as the Spectacle Marketing Director (SMD) considers suitable. The manufacturers Marketing budget would reflect 25% on “invested money” toward 2 races AND INDYCAR’s overall exposure to mainstrean America and Western Hemisphere markets. (Please read monies credit process on both Marketing and Growth Strategies).

Raising Capital:

As any business venture, there needs to be outside capital investment to keep INDYCAR influx of cash flow even when the series is running a superavit budget. The expense based on this outside investment should not be more than 20% of the Operating Budget. The idea is having cash available to buy or bring new ventures toward the series.

Business/Competition Decisions:

INDYCAR will manage its competition and new business opportunities decisions through a 11-member Assessment Committee (IAC) that will include 2 members of the following represented groups (Selected by each group and CEO is part of this IAC):

  1. Indianapolis Motor Speedway
  2. INDYCAR
  3. Track Promoters
  4. Team Owners
  5. Manufacturers

Fan Interaction:

The fan is the most important asset the series has to grow the sport outside the business walls of INDYCAR. Based on this premise, INDYCAR will select 15-20 fans to participate on Brand and Product Improvement Initiatives to which each individual would sign a “Confidentiality Agreement” that would not be permitted to disclose any information until INDYCAR allows it to. The importance is to recognize the “feeling” toward customers and receive a barometer on how successful the endeavour could be. This will not deter the Committee to pursue their ideas even if fan polling goes below 50% but rejection should occur by reaching only 30% of approval.

This plan will be in full effect starting Thursday, November 1, 2012 in order to be up and running by the season opener at St. Petersburg, Florida. This plan is in effect until October 31, 2015.

Enjoy!

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