SBJ/20090323/This Week's News
Joe Gibbs Racing is new race team partner
Published March 23, 2009
One of NASCAR’s foremost race teams has a new business partner.
Joe Gibbs Racing is finalizing a broad-based relationship with IMG that will give the NASCAR team access to the agency’s full range of sponsorship sales, measurement and activation capabilities.
The agreement between JGR and IMG will not preclude the race team from working with other agencies and their clients, said JGR President J.D. Gibbs. It simply gives Gibbs Racing the ability to tap into IMG’s resources, most notably the agency’s return-on-investment tools.
“You reach a point over the years that you either need to increase what you have in-house and make yourself a lot larger or you need to tap into someone else,” said Gibbs, whose father, Joe, the former Washington Redskins coach, founded the race team in 1992.
JGR’s front office includes five employees under Dean Noble, the team’s vice president of business, and four under Dave Alpern, the vice president of marketing. Noble and Alpern will be JGR’s day-to-day contacts with IMG.
IMG will take a team approach that includes Tom Knox, who runs the motorsports-heavy Charlotte office, newly hired Mark Dyer (see related story), and Jim Tucker, who previously has sold for NASCAR, the NFL and Gillett Evernham Motorsports.
It’s uncertain if IMG will eventually embed a salesperson in the Charlotte-based Gibbs Racing headquarters, as it did with the NHRA and typically does with its college clients. There is not an ownership stake for IMG, and IMG Sports and Entertainment President George Pyne has said ownership is not in IMG’s plans.
Neither side revealed details of the arrangement, but typically they involve a retainer fee and a percentage of sales.
“This adds a lot of value to JGR,” said Gibbs, who credited a lengthy relationship with Pyne for driving the deal. Pyne formerly was the chief operating officer at NASCAR, where he worked for 11 years.
“We haven’t detailed everything we’re going to do together, but we’ll brainstorm it and I’m looking forward to seeing where this will go,” Gibbs said. “IMG has done a lot of neat things with ROI for their clients and we’re looking to do more for our partners.”
Gibbs said the decision wasn’t driven by the current economic climate, but rather a need for JGR to better assist its sponsors. The more information the team can present to its sponsors, the smoother those renewal discussions typically go, he said.
The team is already delivering on the track, where all three of its cars qualified for the Chase for the Sprint Cup last season. Gibbs said it’s just as imperative to deliver to its sponsors off the track, even though JGR doesn’t have a front office as large as competitors Hendrick Motorsports or Roush Fenway Racing.
One way to do that is by measuring return on investment, which is a critical component to the JGR/IMG deal.
Pyne said IMG recently unveiled a new software tool for General Electric that makes ROI easier to process and the agency is finding new applications for it with the race team and other clients.
From a sales perspective, “They also have contacts that can get them in front of people that we could never talk to,” said Gibbs, whose primary sponsors include Mars, Home Depot and FedEx on JGR’s top three Toyotas.
While the team’s competitive success has enabled it to attract some of NASCAR’s most enduring sponsors, nearly every race team is seeking additional sponsorship to take the stress off of the big-spending primary sponsors, who pay in the range of $20 million a season.
The partnership between Gibbs Racing and IMG also highlights the evolving nature of talks between agencies and race teams.
Connexions Sports and Entertainment, a Radiate agency with offices in San Marcos, Calif., and Charlotte, had similar conversations with NASCAR teams last year. It was on the verge of locking down a deal with Dale Earnhardt Inc. before DEI merged racing operations with Chip Ganassi Racing late in 2008.
John Story, the former vice president of motorsports at DEI, said Connexions essentially would have supplemented DEI’s own sales staff.
“What you hope, through Connexions and the whole Omnicom network, is that our world could have expanded greatly,” Story said. “We could have reached many more companies looking to spend money in the sport.”
Such a relationship between an agency and a team does raise some questions, though, and DEI was just starting to work through those with Connexions. What happens if the agency brings in a sponsor that is not a good brand fit for the team? Can that business be placed with a competing team?
Those are questions that JGR and IMG are similarly working through.
“We just haven’t had a chance to discuss everything,” Gibbs said. “What we have basically is a commitment to help each other, with a big focus on the ROI piece.”
Roush Fenway Racing and its satellite team at Yates Racing receive sales and marketing support from Fenway Sports Group, but Fenway’s ownership stake in Roush keeps that relationship exclusive.
The Gibbs Racing partnership marks a significant leap for IMG, which has enjoyed limited NASCAR business in recent years. While IMG has struck deals to represent the NHRA and John Force Racing’s dragsters, its action in NASCAR has mostly been limited to representing Allstate and Coca-Cola for corporate consulting, as well as handling Jeff Gordon’s endorsements. JGR is IMG’s only team deal in NASCAR.
Pyne said IMG has purposely taken a methodical approach to NASCAR since he took over leadership of the agency in 2006.
“If you look at the brands we’re associated with in motorsports — the Forces, Danica Patrick, Jeff Gordon, the NHRA — they’re premium brands,” Pyne said. “Joe Gibbs Racing has won championships and they are an iconic team in NASCAR. We think this puts us in as good a position as you can be in for 2009, but also 2010, 2015, 2020.”