SBJ/September 24-30, 2012/Leagues and Governing Bodies

Tough year for IndyCar starts with TV drop

If IndyCar CEO Randy Bernard were grading his series’ business performance this year, he would give it a solid “C” on its report card.

CEO Randy Bernard was pleased that attendance was up for most IndyCar races.
Photo by: ICON SMI
In his eyes, disappointments like a double-digit decrease in TV viewership, the cancellation of an August race in China, a reduction in title sponsor Izod’s activation and owner criticism of his leadership were offset by the successful introduction of a new car, which helped drive more lead changes during races, the addition of new manufacturers Chevrolet and Lotus, and an increase in average attendance.

“Was it a challenging year?” Bernard asked. “Very much so. … There were some disappointments but [there were] a lot of positives. The most important positive is we have the nucleus of the sport, the car and the driver. We have an exceptional car and exceptional drivers. With that, we will grow.”

IndyCar pulled its lowest viewership to date on NBC Sports Network. The series, which moved from ESPN to NBC Sports Network (then Versus) in 2009, averaged 292,000 viewers over nine races in 2012, down 27 percent from 402,000 in 2011 and 62 percent from the 778,000 viewers it averaged its last year on ESPN in 2008.

The series’ broadcast ratings suffered similar declines. ABC, which this year started a new six-year deal worth more than $6 million annually, averaged 2.5 million viewers over five races, down 17 percent from five races in 2011. The decrease occurred despite the Indianapolis 500 drawing its largest audience since 2008, earning a 4.3 Nielsen rating and 6.8 million viewers, up 8 percent and 1 percent, respectively, from last year. Two ABC races were moved to ESPNews, one because of track issues and another because of weather.

Before the season Bernard predicted that ratings would increase by 15 percent this year despite the sport losing its most visible mainstream star, Danica Patrick, who left to drive in NASCAR full time. He criticized NBC Sports intermittently during the course of the season for not promoting the sport better. Drivers added to the criticism in recent weeks and Scott Dixon told the Associated Press that NBC had done a “crappy job” of promotion. But Bernard intervened on Sept. 15 during the drivers meeting prior to the last race of the season and asked drivers to stop their criticism of the network.

“On television, the positives I’ve seen is that the quality of the broadcast continues to get better,” Bernard said. “Our negative is our ratings. We’re trying to make changes in the future to address that. I hope to roll that out in the next 45 to 60 days.”

Jon Miller, NBC Sports and NBC Sports Network president of programming, said in an email: “Our marketing and promotional efforts were consistent with or greater than the previous two seasons when we grew viewership by double digits each year. We even introduced a new series, ‘IndyCar36,’ which provided behind-the-scenes access to drivers each week we televised a race. This season was simply an anomaly, the victim of scheduling and weather challenges. IndyCar and open-wheel racing is a quality long-term product for us, and we’ve already begun planning for next season.”

While ratings were a setback to the series, the cancellation of its race in China delivered an immediate blow to its bottom line. Sources familiar with terms of the race said it was worth more than $8 million to the series. It was canceled because of a mayoral change in the city of Qingdao, which was hosting the race. Bernard said he doesn’t believe the IndyCar Series will try to return to China any time soon.

Around the same time IndyCar officials learned they were losing the China race, they began searching for a presenting sponsor. Izod, which signed a six-year, $60 million deal in 2009, is still committed to the series, but the brand reduced its activation this year, and IndyCar’s sales team was pitching a presenting sponsorship that eventually could become the series title sponsor if and when Izod exited its deal.

Bernard wanted to find a presenting sponsor for the series by the start of next season, but he said that IndyCar is “nowhere near signing anyone” at this point. He said Izod will be back in 2013.

“I don’t want to rush it,” Bernard said. “We know it’s a valuable asset and has significant worth to it.”

The headwinds IndyCar faced in 2012 led a group of owners to quietly seek Bernard’s ouster. Bernard confirmed the effort with a controversial tweet in June. He said he had no regrets about publicizing the effort to have him ousted and reiterated that he answers to IndyCar’s board of directors, not to team owners.

“When you read about the ancillary noise, not about the series and not about the drivers and competition, it doesn’t help,” said Steve Lauletta, president of Chip Ganassi Racing. “Everyone needs to be pushing in the same direction. All too often there is a diversion done internally from the real business at hand. We’re all collaborating on making IndyCar better. If we can do that, it could be phenomenal.”

Despite those setbacks, IndyCar managed to increase its average attendance in 2012. Average attendance rose 2.6 percent to 100,140 over 15 races. It was less than the 15 percent Bernard predicted at the start of the season, but he was pleased that the only two races in which attendance fell were the Grand Prix of Baltimore, which reduced its seating capacity, and the Honda Indy Grand Prix of Alabama, which saw a 2 percent decrease.

Bernard wants to announce the 2013 IndyCar schedule by Oct. 1. He is trying to expand the number of races from 15 to 19 next season. He also is looking at doing doubleheaders in some race markets, holding a race on a Saturday and another on Sunday. IndyCar would change the course or do a standing start for one of the two races to make each one different.

“It would add great value to the promoters because they have an extra event,” Bernard said. “You’ll find the fans who travel for two races instead of one increase. From a team owners’ standpoint, all of their costs will have been incurred. From a driver standpoint, they create that exposure and the drama will go into the next race.”

Lauletta added, “The thought process of needing to approach things differently is right. If IndyCar continues to run a similar schedule year in, year out on the same TV network with the same sponsor activation, we’re going to get the same results. The more important thing is how we can change. … I applaud them for what they’re trying.”

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