Companies sold on network they can build as sponsors

Executives gain access to others because of their relationships with CART.

By ALICIA CALDWELL, Times Staff Writer
© St. Petersburg Times
published February 23, 2003

ST. PETERSBURG -- Don't be fooled. Even though it weighs 12 pounds and looks like a traffic cone with wings, the race car body piece that sat on pit road Saturday was a highly engineered $35,000 part.

And that's only a small portion of the $5-million to $10-million it costs to run a Champ Car in the CART series that continues today in St. Petersburg.

Unlike NASCAR, which depends on television exposure to sell the sponsor product painted on the car's hood, CART teams have developed sophisticated sponsorship webs to raise money.

The people who persuade company executives to lay out $4-million for a title sponsorship, the dominant naming position on the car, often are promising them access to top executives of other companies with whom they hope to do business. They're working what is called the business-to-business marketing platform.

"It's a big departure from the days of beer and cigarettes," said Ralph Howard Hansen, who raises sponsorship money for the Newman/Haas Racing team.

Recently, Hansen created such a relationship when he got Eli Lilly & Co., a pharmaceutical company, to sponsor one of the Newman/Haas cars and PacificCare Health systems, a major health care insurer, to sponsor another. The sponsors, he said, already do business with each other but are finding ways to improve those relationships and create others as they schmooze in the elaborate hospitality areas.

Johnson Controls, which sells $20-billion annually in car components among other things, has its name on Rocketsports Racing's car not because it sells directly to consumers but to maintain contacts with executives of Ford, a series sponsor, and other automotive companies, said Jeffrey Telman, Johnson's motorsports manager.

"In this sport, what we offer them is access to the back door," said Henry Rischitelli, who represents Patrick Racing. "We arrange meetings between senior executives."

Frequently, the big sponsors convince their suppliers to become associate sponsors, which defrays the big-ticket cost of being a title sponsor, Rischitelli said.

CART teams depend almost exclusively on sponsorship money to cover expenses, Rischitelli said. It is common for owners, typically wealthy business executives, to dip into their own pockets to make ends meet.

Champ Car racing is an expensive venture, though CART, under new president and CEO Chris Pook, has cut team costs significantly. The engine deal, new this year, cuts the annual cost in half to $1.2-million a car, said Jim Cooke, marketing and communications director for American Spirit Team Johansson.

Teams typically fly three dozen people in for a race, Cooke said. There are three tractor trailers and six drivers who haul the gear, a hospitality rig with waiters, pit crew, engineer and driver salaries and hotel bills.

And every responsible team builds into its budget contingencies for accidents. A small accident will cost $50,000-$80,000, Cooke said. If a car is totaled, the chassis and transmission alone are more than $500,000.

"There's nothing cheap in racing," Rischitelli said.