Like many team owners, Bobby Rahal knows the feeling of digging into your own personal wealth to help fund the operation.
Rahal has seen those days since leaving a successful driving career 25 years ago to become a car owner. He’s now co-owner of Verizon IndyCar Series team Rahal Letterman Lanigan Racing alongside David Letterman and Michael Lanigan.
Rahal said he won’t need to answer a cash call this year, with new sponsors like Hyatt and Fifth Third Bank joining
primary sponsor Steak ’n Shake and keeping the team fully funded.
“It’s a passion for people like me and Roger [Penske] and others; that’s why they’re in racing,” Rahal said. “But you wouldn’t do that if you thought that the series wasn’t progressing and that there wasn’t the opportunity to bring in outside money at such a level that you wouldn’t have to use any personal money to support it. I think we’re getting there.”
One inexorable trend Rahal has noticed over the years in motorsports is, no matter how much revenue is brought in by a team, it always seems to get plowed into research and development to gain the next on-track edge.
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“The nature of any ownership, at least in my experience, is whatever you bring in, you spend, because there’s always something you can invest in that might make a difference either immediately or down the line,” Rahal said.
“You operate it like a business; I’m not sure if you’d be considered a normal business because oftentimes you don’t make any money out of it. Most businesses, if you don’t make money, it doesn’t exist for very long. So it’s a little different, I think.”
One thing that has changed during his ownership tenure is the sport’s increasing focus toward business-to-business-oriented sponsorships as opposed to those focused on reaching consumers. Rahal has enjoyed the transition if for no other reason than it makes it easier to show sponsors their return on investment.
“When we brought in Steak ’n Shake a year ago, that was one of the first new [business-to-consumer] sponsors to
come into IndyCar racing in a long time,” Rahal said. “But the B2B — I’m not saying it’s easier to justify, but any sponsor is looking to quantify the value of their investment. And when you do the B2B, it’s pretty easy to be able to do that because there’s a transaction that takes place.
“I want as many sponsors as we can get; I don’t care if they’re B2B or B2C. But B2B is almost a bit of an easier sell, frankly, because you’re bringing two parties together with one wanting something the other has. … That’s pretty hard to beat.”
