Boston Consulting Group Study regarding IMS and IndyCar …

Posted: March 1, 2013 in Uncategorized

STORY

The long awaited study by the Boston Consulting Group regarding the potential future of the Indianapolis Motor Speedway and the IndyCar Racing Series has surfaced.  The Associated Press‘ Jenna Fryer reports details of the study here … 

Highlights of the BSG Study are  …

BCG said IndyCar was “the best pure racing motorsports league in the U.S. … but the series suffers from lack of awareness.” Part of its problem is that a significant amount of the 14 million fans who watch the Indianapolis 500 don’t watch another race during the season.

Focus groups suggested that marketing strategies should be geared to “positioning IndyCar as having the most skilled, daredevil drivers and not theatrical off-track personalities.” They indicated they valued fast cars over science and engineering; winning over points challenges; suspense through lead changes over entertainment through crashes; and the diversity of track types rather than ovals.

“Focus on excitement of real racing; daredevil drivers defined by winning, racing at thrilling speeds,” the report said, as a way to distinguish IndyCar from NASCAR’s “amusing entertainment: off-track drama and partying.”

The report also suggested:

— IndyCar should split the schedule into two seasons — a 15-race U.S. calendar from April to August and an international series during the offseason. The championship would be decided during the U.S. season, and the hypothetical schedule proposed by BCG included seven cities not currently visited by IndyCar. It opened at Houston, then Phoenix, the Indy 500, Miami, Atlanta, Boston, Chicago, Pocono, Toronto, Seattle, Sonoma and Fontana. The “playoffs” portion included Texas, Long Beach and the Indy road course. BCG argued for a playoff because “the current IndyCar schedule lacks consequence and the television ratings are at the lowest at the end of the season because the series does not have a mechanism to create suspense.”

— One television partner, preferably ABC/ESPN, or placing as many races as possible on ABC. The report also suggested the NBC Sports Network may be in violation of its contract with IndyCar if it promotes any other motorsports series more than IndyCar. NBCSN will broadcast Formula One this year, but the promotional clause in the contract pertains only to the cable channel and not network television. The report said NBCSN has indicated it would “release the series from the deal” because the rights fees increase from $5.5 million this year to $10 million in 2018 when the contract expires. But NBCSN has indicated it’s happy with the IndyCar deal and wasn’t interested in ending the relationship early.

— IndyCar should reduce the Leaders’ Circle subsidy payments to teams and redirect the funds into a weekly purse based on performance. Under the current model, the league is giving teams a $1.1 million subsidy and race winners are earning just $35,000 per victory. BCG offered several different models, including one that shifted half of Leader’s Circle money into prize money and upped the race winner payout to a minimum $240,000 per victory.

— Using Indianapolis Motor Speedway more. BCG Found that of the 132 days the track was used in 2012, only 21 were considered major revenue-generating events. By using the speedway for an IndyCar race on the road course, BCG found IMS had the potential to generate a $4.3 million profit.

— Resetting ticket price tiers: BCG found that IMS didn’t really differentiate between high-end and low-end ticket pricing. The report targets Indy 500 ticketing, suggesting penthouse and deck tickets should be raised from $150 to $200, paddock seats from $90 to $150. Other seats should drop anywhere from $5-$20 and sometimes more.

19679419_BG1

Comments are closed.