Dario slightly opens door to IRL return

[NickFalzone]

As of last week it seemed like there was no interest at all in going back to IndyCar, but on Thurs it sounds like he's at least leaving it as an option. From the full article:

http://www.nascar.com/2008/news/headlines/cup/07/10/dfranchitti.shocked.disappointed/index.html


Someone asked Franchitti if this was the most difficult season he ever has experienced in his career. Forcing a smile, he replied: "Well, right now it's half a season, isn't it?"

He obviously hopes for it to become more than that, but did not sound optimistic.

"I said to a friend of mine the other day, if it could go wrong this year, it has gone wrong this year," Franchitti said. "There were times when we've been running well in the Nationwide car and then we've had problems; same with the Cup car. Then I break my ankle; we can't find a sponsor.

"I had so much luck last year in IndyCar that I really felt at times I couldn't do anything wrong. I guess luck has a way of balancing out."
Franchitti also was asked if he is considering a return to the IndyCar Series, where he won the championship last season. He didn't rule it out.

"I'll have to have a long, hard thought process about getting back in an Indy car because, like I've said, I loved my time there," Franchitti said. "I really enjoyed it, but I was ready at the end of last year to do something else. But never say never. I might decide I want to do it again, but I really don't know right now.

"It would be a shame to waste everything that I've learned in six months and the progress that I've made. It'd be a shame to waste that."

http://www.nascar.com/.element/img/2.0/story/flag_checkered.gif

[DavePI2]

let him rot in **** before anyone takes him back.


david

[call_me_andrew]

Karma is a bitch.

Please don't tell her I said that.

[garyshell]

let him rot in **** before anyone takes him back.


david


Karma is a bitch.

Pretty sad state when one of the most likable racers CART or the ICS has ever seen is treated this way because of the bigotry toward the tin top roundy round series. I am no fan of NASCAR (other than the two road course races), but I sure as hell am not going to let that give me a case of the red mist regarding Dario.

Gary

[jarrambide]

Pretty sad state when one of the most likable racers CART or the ICS has ever seen is treated this way because of the bigotry toward the tin top roundy round series. I am no fan of NASCAR (other than the two road course races), but I sure as hell am not going to let that give me a case of the red mist regarding Dario.

Gary
The split may be over, but the "you are either with us or against us", "you go, you are my enemy" attitude of fans is still alive and kicking.

Why is it that people don´t get that is just a sport, that for the drivers is their work, this is not about a higher calling, allegiances, betrayal or love, it is a sport, they work as drivers, they take business decisions.


If he comes back, he comes back, if he doesn´t, he doesn´t, if it is in the ineterest of any teams and in his interest, he wil come back.

[Jag_Warrior]

What makes anyone think that he WANTS to be taken back? Every article that I've read states that his preference is to stay in a NASCAR series and work his way back up to Cup.

His mistake was in choosing to go with a (known) weak NASCAR operation that was losing its primary sponsor. But even with that, he's said not one word (that I've read) that suggets he's sorry that he left the IRL for NASCAR. Actually, quite the contrary. He accomplished all that he wanted to accomplish there, and he wanted to go do something else.

[NickFalzone]

Dario left for a number of reasons, it wasn't just the $$. Yes, the paycheck is better in NASCAR, but as the highest-paid IRL driver last year, the jump in money was not as big as you might think. Under the current circumstances, it may even pay better to come back to the IRL for a season or two. NASCAR is experiencing severe sponsor issues that so far the IRL has not been hit nearly as bad on. I like Dario, he's a very talented open-wheel driver and I would like to see him back in the series. And I even respect his primary reason for leaving besides $$, the safety of NASCAR vs IndyCars. He still has a good 3 seasons or so left as an IndyCar driver, so hopefully this works out for the best. Unfortunately, I see him retiring into ALMS as much a more likely scenario.

[call_me_andrew]

Pretty sad state when one of the most likable racers CART or the ICS has ever seen is treated this way because of the bigotry toward the tin top roundy round series. I am no fan of NASCAR (other than the two road course races), but I sure as hell am not going to let that give me a case of the red mist regarding Dario.

Gary

When someone wins a championship and decides he'd rather race in another series than defend it, there's a degree of rejection involved. Just ask Bernie about Nigel in 1993.

With the weak U.S. economy, advertising in NASCAR has become too expensive. Think about it in terms of risk verses reward. NASCAR requires the largest investment (i.e. the most risk), while investment in IndyCar is much cheaper (low risk). While NASCAR's bigger audience offers a big reward, a lot of companies don't want to go for the big reward. The IRL gives them a place to play it safe. The slow economy seems to be working in the IRL's favor.

[bravefish]

Come on back Dario - the more quality in the series the better I say

[Jag_Warrior]

With the weak U.S. economy, advertising in NASCAR has become too expensive. Think about it in terms of risk verses reward. NASCAR requires the largest investment (i.e. the most risk), while investment in IndyCar is much cheaper (low risk). While NASCAR's bigger audience offers a big reward, a lot of companies don't want to go for the big reward. The IRL gives them a place to play it safe. The slow economy seems to be working in the IRL's favor.

Risk, in this case, is the probability or possibility that the investment will not perform as expected. "Cheaper" does not equate to the risk being lower. It just means that the investment required would be smaller. The risk could be greater. Think about buying 100 shares of GM right now vs. 100 shares of Apple. Think about buying a row house in East Baltimore vs. a condo in Georgetown. You wouldn't assess the risk of those choices based simply on the GM shares and the row house being cheaper. According to Forbes, the typical returns seen by NASCAR sponsors in 2007 was in the 3:1/300% range. The last data I saw on the IRL was a couple of years ago and it was closer to 1:1.

I'm not saying that some prospective sponsors aren't giving the relatively high cost of NASCAR sponsorship a second look. And maybe they will look at the IRL. But to say that the risk of IRL sponsorships is lower because it is cheaper isn't accurate. Dollar for dollar, the returns in NASCAR have been higher than in the IRL. How you'd assess the risk, I'm not really sure.

[icehammer97]

Risk, in this case, is the probability or possibility that the investment will not perform as expected. "Cheaper" does not equate to the risk being lower. It just means that the investment required would be smaller. The risk could be greater. Think about buying 100 shares of GM right now vs. 100 shares of Apple. Think about buying a row house in East Baltimore vs. a condo in Georgetown. You wouldn't assess the risk of those choices based simply on the GM shares and the row house being cheaper. According to Forbes, the typical returns seen by NASCAR sponsors in 2007 was in the 3:1/300% range. The last data I saw on the IRL was a couple of years ago and it was closer to 1:1.

I'm not saying that some prospective sponsors aren't giving the relatively high cost of NASCAR sponsorship a second look. And maybe they will look at the IRL. But to say that the risk of IRL sponsorships is lower because it is cheaper isn't accurate. Dollar for dollar, the returns in NASCAR have been higher than in the IRL. How you'd assess the risk, I'm not really sure.

Risk actually does mean how much spent. The more capital (money, time, ect.) spent the more risk involved. It is risk vs. reward that you are talking about. Also with your numbers I would be willing to bet the IRL's numbers are much better now after the merger and will probably be even better next year. For the NASCAR number I would ask what were the numbers in 2006, 2005, ect.? If they were higher then 3:1, which with all the lower TV ratings stories I have seen I would assume that the numbers were better in the past, then with the multi year deals that sponsors sign in NASCAR they could not want to take the risk of the numbers getting even worse and possibly losing their investment. Think about it this way which would you rather have a stock that just merged with it's biggest competitor or one that is established and is starting to take a down turn at least for now (even if you could buy it for less then it is worth)? Maybe this year you make a higher percentage in NASCAR but over a three or more year period of a contract Indycar could give the better return. Don't forget the fact that many companies are lowering their advertising budget so they may not be able to afford NASCAR sponsorship.

[NickFalzone]

Risk actually does mean how much spent. The more capital (money, time, ect.) spent the more risk involved. It is risk vs. reward that you are talking about. Also with your numbers I would be willing to bet the IRL's numbers are much better now after the merger and will probably be even better next year. For the NASCAR number I would ask what were the numbers in 2006, 2005, ect.? If they were higher then 3:1, which with all the lower TV ratings stories I have seen I would assume that the numbers were better in the past, then with the multi year deals that sponsors sign in NASCAR they could not want to take the risk of the numbers getting even worse and possibly losing their investment. Think about it this way which would you rather have a stock that just merged with it's biggest competitor or one that is established and is starting to take a down turn at least for now (even if you could buy it for less then it is worth)? Maybe this year you make a higher percentage in NASCAR but over a three or more year period of a contract Indycar could give the better return. Don't forget the fact that many companies are lowering their advertising budget so they may not be able to afford NASCAR sponsorship.

I agree that 1:1 is not likely in 2008. Every month or so there's been a new sponsor added to the league, including Subway today (Currently Tracy, and I heard as a possible league sponsor?), Izod a week ago. It's also worth noting that the IndyCar demographic is not identical to the NASCAR demo. With NASCAR you have such a sponsor overload that it's easy to get lost, whereas in the current IRL a brand as simple as Peak Antifreeze or Izod gets a good name for itself. Anyone watch the Nasvhille race? I saw Izod all over the place, and I tend to instinctively avert my eyes whenever I see branding. Of course, this lack of brand competition means there's room to grow and the funding/branding is nowhere near as strong as NASCAR. But if the on-track product is good and the ratings/attendance continue to make moderate gains, then one would think further sponsorship would be inevitable.

[Jag_Warrior]

Risk actually does mean how much spent. The more capital (money, time, ect.) spent the more risk involved. It is risk vs. reward that you are talking about.

You don't seem to grasp the concept of investment risk. Whether from a corporate or personal investment standpoint, investment risk is as I definded it. Given your definition, do you believe that there is more risk in buying $100,000 in Treasury securities than $10 worth of a pink sheet stock? Again, the amount is not key. Simply think of risk in terms of probability of loss. The probability that the Treasury will suffer a principal loss (if held to maturity) does not increase with the amount of money invested. The amount that you have at risk will increase (or decrease) with the amount invested, but the risk is the same... because the risk probability is the same.

I listed the "typical" or average return on investment that Forbes reported in NASCAR Nextel/Sprint Cup for last year. If you'd read my last statement, you'd have seen that I made no correlation between ROI and risk. As I said, how you'd assess the actual investment risk, I'm not sure. I'm just pointing out how investment risk is not assessed or defined: by going with whatever is cheaper.


Also with your numbers I would be willing to bet the IRL's numbers are much better now after the merger and will probably be even better next year.

As I understand it, the data was gathered and tabulated by Joyce Julius & Associates, and reported by Forbes. "Sponsor exposure value" is just a primary metric that most companies use in calculating the ROI of a sponsorship program. It's anyone's guess what affect the combination of series will have on the sponsor exposure values. Are there more clear, in focus views and verbal references to the average sponsor now than before? Have advertising ad rates recently risen? Knowing the answers to those questions would give some indication of where things now stand, with respect to sponsor exposure values. When you say "the IRL's numbers", I assume that you actually mean Nielsen ratings and not sponsor values. Sponsors also track the Nielsens. Higher Nielsen ratings may lead to higher ad rates, which may lead to higher sponsor exposure values... assuming the number of clear, in focus views remains constant or increases. But as Joyce Julius calculates the metric, sponsor exposure value is not ratings dependent. People often confuse Nielsen ratings with Joyce Julius data. There may be a correlation, but they are not the same thing.



For the NASCAR number I would ask what were the numbers in 2006, 2005, ect.? If they were higher then 3:1, which with all the lower TV ratings stories I have seen I would assume that the numbers were better in the past, then with the multi year deals that sponsors sign in NASCAR they could not want to take the risk of the numbers getting even worse and possibly losing their investment.

I'm not sure what the mean ROI (calculated using "sponsor exposure value" and total cost of sponsorship) was in years past. But you mention ratings. Again, that's not a sponsor exposure value component. If the average ad rate has fallen and/or if the average number of clear, in focus views has decreased, or if the cost of sponsorship has increased, while the other components have remained constant or fallen, then the average ROI % might have decreased over that time period. But I don't have that data, so I don't know one way or the other



Think about it this way which would you rather have a stock that just merged with it's biggest competitor or one that is established and is starting to take a down turn at least for now (even if you could buy it for less then it is worth)?

I don't buy stocks based simply on whether one company combines with another. That tells me nothing. If it's an investment, I'd look at the fundamentals of both concerns involved, and then try to form rational expectations about the fundamentals of the combination. What benefits might be seen from the combination? What cost savings might be gained from eliminating redundancies? If I'm trading, I look strictly at the technicals - I won't be staying for dinner anyway. :) In short: not enough data.

As for NASCAR (truly) turning down, I've been hearing that for 5 or 6 years now. It may have reached a plateau. I don't know. Usually what I see are anecdotal offerings when rough sailing is predicted for NASCAR or ISC. I've followed NASCAR for 35+ years and I haven't seen it take many steps backwards yet. We'll see how things go based on what the data shows. That's true of both NASCAR and the IRL.



Maybe this year you make a higher percentage in NASCAR but over a three or more year period of a contract Indycar could give the better return. Don't forget the fact that many companies are lowering their advertising budget so they may not be able to afford NASCAR sponsorship.

Yes, maybe. Maybe usually assumes a possibility. Rational expectations are most often based on historical data and probabilities. Especially in manufacturing and the financial sector, things are going from bad to worse. What that will mean to sponsorship programs, I don't know.

[VkmSpouge]

I would quite like Dario Franchitti to come back into Indycar, he's a quality racer.