Jim Helton's company makes universal CNC gear inspection systems for parallel axis, spiral bevel and hypoid gears. It makes pitch diameter measuring systems. It makes three-jaw expanding arbors. It makes linear actuators.
Helton says his company, which develops high-tech measuring equipment, sells more of all of those pricey doohickeys because it sponsors an Indy Racing League team.
"The reason we're in racing is that we make more money from being involved in the IRL than we would if we weren't involved," said Helton, president of M&M Precision Systems Corp., an Ohio company that has been around since 1951. "It's that simple. We sell more equipment than we did before we got involved."
Helton's M&M company doesn't get the same sort of exposure that the other M&M — the candy brand — reaps from its sponsorship on the NASCAR Winston Cup series. His associate sponsorship with Treadway Racing buys him a slice of the car that's barely visible on television in a series with TV ratings that are barely a blip.
Though the Indianapolis 500 was again to showcase itself Sunday as one of the more glamorous race properties in the nation, the IRL typically draws 30,000 to 50,000 for its other dates, a far cry from the 100,000 to 200,000 that flock to most Winston Cup superspeedway events.
Sponsorship participation in the IRL — projected at $105 million for the year by IEG Inc. of Chicago, but a figure disputed by the IRL — pales in comparison to Winston Cup and CART's FedEx Championship Series, which each collect more than $450 million.
Yet Helton has found a happy home in the series that consistently gets pounded in the arena of public perception by those who compare it with the other two major U.S. series. The IRL gave M&M Precision a platform to entertain clients at the prestigious Indy 500, as well as in several other markets that it values, including Charlotte, Las Vegas and Phoenix.
Helton says he doesn't care how many people see his company's logo. He cares who sees it. The IRL offers access to techies who control millions of dollars' worth of business. But with the bulk of its more competitive teams running on budgets that range from $3 million to $5 million a year — less than half the cost of competitive teams in the other series — that access comes at a bargain rate.
"I couldn't do this in CART; I'm not General Motors," Helton said. "This is an affordable series that begets affordable sponsorships. As a sponsor, you can't convince me there isn't a place for that."
The IRL is an acorn alongside oak trees when compared with CART and NASCAR, but its backers and boosters say such comparisons are unfair, since the IRL is in only its fourth season. The league is quick to point out that since 1996, when it ran five races, to this year, when it is scheduled to run 11, sponsorship revenue has increased by 65 percent, viewership has gone up by 17 percent and attendance has risen by 13 percent.
By all credible indicators, the league has grown. And like other racing series, it can line up a solid contingent of sponsors to tout its effectiveness. MCI WorldCom Inc., which sponsors a car for Kelley Racing, says its return on investment last year was an astonishing 1,640 percent when you consider benefits from business-to-business contacts, exposure and hospitality.
But because the IRL's early days have been marked by teams and sponsors entering and then leaving the series, the mass perception often has been that the league has been unable to gain traction.
"I don't think many people realize how much of a whale this is to move to shore," said John Barnes, the racing brains behind the partnership that owns Panther Racing, which thanks to primary sponsor Pennzoil Co. likely is the best-funded team on the IRL circuit. "It's a huge entity."
The IRL made a major stride in terms of perception two weeks before this year's Indy 500, when it announced a five-year contract with ABC and ESPN that was built around the marquee race but also included the rest of the IRL schedule.
That perception was undermined, though, as it became apparent that momentum was building toward a reunification with CART. Tony George, the IRL founder and kingpin of Indianapolis Motor Speedway, confirmed that he had met recently with CART CEO Andrew Craig and NASCAR patriarch Bill France Jr., the latter of whom has said he'd like to facilitate a merger.
Whether that will happen is unclear, but the IRL is obviously trying to enhance its image, one way or the other.
A new $8 million advertising campaign, coupled with a more aggressive approach to sponsor recruitment, gives the IRL its first integrated imaging effort.
"The marketing needs to be improved, and it has improved in the last few months," said Eddie Cheever Jr., the IRL owner/driver who won last year's Indy 500. "It takes time but it can be done."
NASCAR has "captivated the attention, the interest and the passion of a certain segment of the American population," he said. "We have yet to find that segment of the American population that will be our fans."
Though it frequently is taken apart for its shortcomings, the IRL rarely is recognized for a core strength: its relative affordability for race teams and sponsors.
By turning away from the expensive turbocharged engines used in CART and fixing the prices on cars and engines, the IRL has created a series in which teams can be competitive for about $3 million a year and run up front intermittently for about half that. Owners pay $280,000 for a chassis that doesn't change every year, as can happen in CART and Formula One. Engines are $83,000, with another $30,000 allowed for update kits each year.
The teams near the top of the funding ladder, like Panther Racing, with sponsor Pennzoil and driver Scott Goodyear, run for about $5 million a year.
"But for $1.7 to $2 million, other teams have beaten us before," Barnes said.
The series does not cap the amount teams can spend. It simply limits the impact of that spending.
"You can spend whatever you want to spend," Cheever said. "But try to spend $50 million redesigning a fork. You probably are going to waste your money because it's still going to come out to be a fork."
The low start-up cost allowed Cheever, a driver who ran the Formula One circuit for 12 years, to enter the series as a car owner for an initial layout of $1 million. Three years and one Indy 500 victory later, he says the business has amassed about $4 million in equity.
"At this moment in time, this is the best value for anyone who wants to invest in motor racing," Cheever said.
