The IndyCar Series has begun searching for a potential replacement for its title sponsor, Izod, three years before the sponsorship is set to end.
IndyCar executives have approached current series sponsors and brands about becoming the presenting sponsor of the series in a deal that would make them title sponsor at an undetermined date. The series’ top executives have approached Verizon and Firestone, two of its existing partners, and one company outside its collection of sponsors with the proposal.
|IndyCar's international ambitions have lined up with Izod's efforts to increase its sales outside the United States.
Bernard said that the series still has a long-term deal with Izod that runs through at least 2015 and added that the sales effort is designed to prepare the series for the future by helping IndyCar secure long-term sponsorships in the technology and tire categories and the funding it needs to expand the number of races it holds.
“IndyCar and Izod have and have had a great relationship,” Bernard said. “I look forward to working with their senior management in the future.”
Izod executives were not available for comment.
IndyCar’s search follows an executive change at Izod parent company Phillips-Van Heusen Corp. Longtime President and Chief Operating Officer Allen Sirkin, who championed the IndyCar deal, is retiring. Sources familiar with the company say his replacement as chief operating officer, PVH Chief Financial Officer Michael Shaffer, has been less enthusiastic about the more than $60 million deal Izod signed in 2009.
The change in executives has coincided with a general decrease in Izod’s marketing support of the IndyCar Series.
It is still doing autograph sessions at Macy’s stores in race markets and running a marketing campaign on Facebook that asks fans to vote for their favorite IndyCar T-shirt. But Izod has curtailed some of the more elaborate marketing initiatives it undertook in 2010 when it shut down Hollywood Boulevard for a pre-race party and installed Indy 500-winning cars at Macy’s in New York, Chicago and Indianapolis. This year, Izod also eliminated the Indy 500 kickoff party that it hosted with GQ in 2010 and with Spin magazine in 2011.
Izod is in the third year of a six-year agreement that included two options for two-year extensions that would take the deal through 2020. Sources familiar with the deal said the company pays approximately $6 million to the series annually in rights fees and spends an additional $5 million annually on media and activation.
The company has a minimum of three years left on its deal. Bernard would not say whether Izod would fulfill that obligation.
IndyCar currently is pitching a multiyear, presenting sponsorship deal priced in the high seven figures plus an advertising commitment to its broadcast partners, ABC and NBC Sports Network. If Verizon or another company bought the presenting sponsorship, the series would be known as the “Izod IndyCar Series presented by Verizon” or whatever the company’s name is, Bernard said. He added that Izod is aware of the pitch but declined to say whether or not Izod’s financial commitment to IndyCar would change if the series finds a presenting sponsor.
“That’s between us and Izod,” Bernard said.
The series’ search for a new potential title sponsor comes at a difficult time for Bernard. Just days after this year’s Indianapolis 500, he tweeted that an owner was pushing to get him fired. Later that week, the series’ race in Michigan required a two-hour delay to repair a crumbling track surface.
Before landing Izod in 2009, IndyCar had been without a series title sponsor since 2001. The series pitched Izod’s parent company, PVH, on the deal for almost a year before the brand agreed to the sponsorship. PVH executives Sirkin and Mike Kelly, executive vice president for corporate marketing, liked the fact that the series had fewer sponsors than other sports and ambitions for expanding internationally into Brazil, China and possibly India. Izod was looking to increase its sales overseas at the time.
In the first year, Kelly and his team at Izod viewed the title deal differently from a typical sports sponsorship. In their eyes, it gave them ownership of the sport and made them as invested in growing the series as Bernard.
Kelly touted the series’ addition of 14 sponsors in Izod’s first year and double-digit increases in brand awareness as evidence the sponsorship was working.
Izod expanded to China last year, and Kelly pushed Bernard to take IndyCar there as a way to raise the brand’s awareness. IndyCar signed an agreement with a race promoter in Qingdao. Now that race, set for Aug. 19, is in doubt (see related story), much like the future of Izod’s sponsorship of IndyCar.