IndyCar's next TV deal key to series survival

Mark Miles

The current IndyCar TV deal that delivers small TV ratings for 2/3rds of its races has made the series economically unsustainable. While it's not time to order the flowers and plan the funeral just yet, that day is in the foreseeable future if something isn't done soon.

Mark Miles is in the midst of negotiating a new TV deal for IndyCar because the current one expires at the end of 2018. Nothing will be more important during his reign as IndyCar CEO than this deal. It will define his legacy.

It remains unknown if Verizon "will return as the IndyCar Series' title sponsor when its contract expires" after the '18 season, but Hulman & Co. CEO Mark Miles' "primary concern right now is securing the circuit's television future." Once a TV deal is completed, Miles can "present Verizon — and any other potential title sponsor — with an enhanced understanding of the benefits of doing business with IndyCar." Miles said, "It’s not beyond the pale to think that we might be able to integrate sponsorship with television. And that conversation is further along."

But it's what that TV deal looks like that matters

As we have stated on numerous occasions, if your sport isn't pulling in one million viewers per event, large consumer product focused sponsors are not even going to look at you.

One can talk all they want about social media and the number of tweets and FaceBook friends they have, but social media only helps to engage fans you already have. High TV ratings are what drive real sponsorship deals, and we don't mean the B2B deals so prevalent in motorsports today.

Let's examine the consequences the low TV ratings have had on IndyCar:

They have tried to get a third engine manufacturer into the series, but have repeatedly failed, and will continue to fail unless a 100% network TV deal is done
They have tried to land lucrative international races but no one will pay the price IndyCar wants because, to the rest of the world, IndyCar is inconsequential due to international TV distribution neglect.
IZOD left early and now series title sponsor Verizon is having second thoughts about renewing – due to low TV ratings
3 of the 4 Andretti cars have no sponsor for most of the races, particularly the NBCSN races
But Andretti Autosport isn't alone. Other cars have blank sidepods, the seat paid for by a ride-buyer
Roger Penske cannot sustain a 4-car team anymore due to lack of sponsors
The #9 Scott Dixon car is rumored to carry NTT sponsorship for free, thrown in by Chip Ganassi as a goodwill gesture from the #10 Tony Kanaan car
The live broadcast of the Toronto IndyCar race pulled in only a 0.16 rating on CNBC. The rebroadcast on NBCSN was a bit higher but where were all the 'true' IndyCar fans when the race was live? The fan base has shrunk significantly since Tony George decided to destroy CART. And why did so-called TV 'partner' NBCSN pawn off the live broadcast to CNBC in favor of the NASCAR race? When NBCSN took on NASCAR, IndyCar became the neglected stepchild. With 'partners' like that who needs enemies?
99.9999% of the people on the street have no idea what IndyCar is because it's nearly invisible to the general public buried on NBCSN
99.9999% of the people on the street could not even name a single IndyCar driver – the result of the sport being buried on NBCSN
IndyCar's second biggest race, the Long Beach GP might switch back to F1 because the city feels the exposure IndyCar delivers for the city on NBCSN is horrible —
0.5 million viewers vs. 50 million if the race were F1. What would you do?

Bernie Ecclestone knew the secret to making F1 a true global sport – proper TV deals in almost every country. Painstaking work to negotiate those deals, country-by-country, year-in and year-out. But it worked, the number of eyeballs watching every F1 race around the globe is estimated to be over 50 million.

[adinserter name="GOOGLE AD"]IndyCar on the other hand does not think global. It's almost total focus is the Indy 500, the bread and butter for the Hulman George family. The rest of the races on the schedule are there only to ensure there is a series and at least 33 cars each year for the 500. Only the Indy 500 gets proper global TV focus – the majority of the races on the schedule are relegated to invisible status on NBCSN.

Just how invisible IndyCar and its drivers are on the world stage, because of the focus on only the 500, was magnified in April when it was announced that two-time Formula 1 world champion Fernando Alonso would race in the 2017 Indy 500 in conjunction with Andretti Autosport. That announcement got more media attention globally than IndyCar will get for the entire season.

It underscores how small inward thinking, with no global initiative, makes one small and inconsequential. Think small, and you will be small.

The 0.21 final TV rating on NBCSN for the 2nd biggest race on the IndyCar calendar – the Long Beach GP – with only 83,000 18-49 year olds watching – highlights just how much the IndyCar fanbase has shrunk because of the years of focus on one race only – the Indy 500 – and the disservice management has done to the rest of the races, its drivers, its sponsors, and its teams with races broadcast on a cable network very few watch.

The teams, the sponsors, and the drivers deserve so much more. The racing is great, the costs have been kept in check and the drivers are some of the best in the world.

But for Mark Miles and IndyCar — if they are capable of learning anything from this — it should teach them that a star athlete with a global following (because of F1's global TV reach) can ignite new flames of interest on a scale that surpasses anything IndyCar's full-time drivers offer. Drivers made invisible by a TV contract that a 5th grader could negotiate better.

Make the egg before the chicken

All races in the USA must be on network TV, not cable. Cable channels like ESPN and NBCSN should be used for qualifying and special shows. Cable TV has resulted in minuscule ratings for IndyCar and a 50% drop in even NASCAR. And you wonder why sponsorship is getting so hard to come by?

TV deals must be reached in key countries that IndyCar thinks it wants to someday race in. There is no better way for IndyCar to fail overseas than to go into a new market where the fans have zero clue what your product is and who the 'stars' are. A TV deal must proceed by at least five years IndyCar's entry into a new market. Of course TV is not the only component to success in a new market, but it's a key seed that needs to be planted that will bear much fruit later.

If Miles and IndyCar don't put a bigger emphasis on structuring a solid global TV deal for IndyCar when the current contract ends in 2018, they would do everyone involved in the series that stake their livelihoods on it a big favor by selling it to someone who can.

At the end of the day, "it's the TV ratings stupid!"

Mark C. reporting for AR1.com