IndyCar oval track race fans are learning a hard-yet-beautiful truth lately: Here in America, The Market is a mercurial thing. Mercurial as in "characterized by rapid and unpredictable changeableness of mood."
The Market is also a honey badger, because at the end of the day it doesn't give a shit what you say or think, it's only interested in what you buy. And finally, The Market is like gravity. It's invisible, yet it exists, and you deny its existence (by, say, jumping off a building) at your own peril.
Which brings us to the approaching IndyCar schedule. Staging an IndyCar race is a sales transaction at its root. Plain and simple. The "buyer" is the track. The "seller" is IndyCar. Like the vast vast vast majority of transactions in The Market, this IndyCar/track transaction is based on everyone's free will. Target corporation, for example, really wants me to buy stuff from their stores. But they can't force me to go there. I have many choices (like Wal-Mart just down the road). But they can (and do) convince me to go there of my own free will though via advertising, brand experience and the like.
So it is with IndyCar and race tracks. IndyCar cannot just show up and force any track (save the Indianapolis Motor Speedway) to host an IndyCar race. It's a sales transaction. So IndyCar shows up at, say, New Hampshire Motor Speedway or Road America and says "Hey, we'd like to stage a race here. We'd like " and RA or NHMS says, "OK, how much will you charge?" and IndyCar says "$1.5 million."
Then NHMS has to do the math. If they pay $1.5 million to stage the race, and it costs another $500,000 in expenses (marketing the event, paying employees, etc. etc.) [note to the anal, I totally guessed at the expense and marekting number. Please don't get bogged down in the details and miss thepoint] then they have to generage AT LEAST $2 million in revenue to make it worth their while.
So RA/NHMS runs all their numbers and either buys what IndyCar is selling or walks away. That's exactly how it works, albeit in much more complexity of mathmetics than presented here. Still, it ALWAYS comes down to how much profit, if any, the track can make (short or long-term) after expenses, including sanctioning fee. ALWAYS. No track is in business to operate at loss. There has to be something (profit) in it for them. Even if they take a loss in the first year, it's got to be for the sake of making a profit in the long term.
So here comes the real New Hamphire Motor Speedway and the track president says in an article posted today on the UnionLeader.com that the track likely won't host an IndyCar race in 2012.
Why? Because they needed 40,000 fans to break even and 28,000 showed up. President Jerry Gappens says "it was a significant loss." Meanwhile, more than 100,000 are predicted to show up for the upcoming NASCAR race. That will most likely be a sigificant profit. (Read the article here.)
The common response is "the IndyCar race wasn't marketed well enough!" Nah. I don't think so. That was always the excuse for crappy attendance at Chicagoland and Kansas, along with undertones of NASCAR-owned Internatonal Speedway Corporation, which owns Chicagoland and Kansas Speedways, not trying very hard to sell the race.
I gotta say it: bullshit.
End of the day, the IndyCar brand is not making oval fans want to spend at least $100 per (when you include tickets and food etc.) to attend. So don't blame the oval fans. Don't shrug it off and say "if the fans would just put their money where their mouths are, all would be well." True in the abstract, but never blame the customer. If the customer is not buying, it's not his or her fault. The customers ARE always right when it comes to how they choose to spend their money. This is business, not charity, and expecting fans to donate their disposable income to a business to keep that business running is, well, unAmerican.
It keeps coming back to the product. Right on cue I received an email from a disaffected fan this morning, that says, in part that his extended family used to go to the Indy 500 every year with him, but have now bailed..
"Can't afford to go to races (airfare, cars, etc.) so I tried to make do with TV. We all know how exciting the product has been for the last several years. I guess I'm an old dinosaur, but I think the current product sucks. Big time. They have lost me."
Now before everyone goes into a grand mal froth and we start the decades-old road/street vs. oval spewing, that is NOT NOT NOT NOT what this is about. Recall The Market doesn't give a shit what we all say or post or argue. Which is why I no longer argue oval vs. twisty. It's a waste of time, really. The Market only gives a shit about what we do with our TV viewership and money. And that is entirely product/brand driven.
As Gappens told the UnionLeader.com, “I can't figure out why there weren't more advanced ticket sales. As I've said before, we're in a business where people vote by buying tickets whether they like it or not, or want to support it.”
Too few people are voting with their money to support oval races. Why? IndyCar oval races are flunking the personal cost/benefit mathematics. It's always good to also remind ourselves that the super-vast majority of IndyCar fans are NOT bloggers, do NOT read blogs, are NOT fixated day-to-day on racing. In fact, if every single blogger and Tweeter who said they want oval racing bought tickets to the Kentucky race, they'd sell maybe 3000. Maybe. The vast majority of fans are consumers with many options, IndyCar racing being but one. Don't confuse the vocal super minority for the less-personally-invested super majority.
If a product doesn't sell here in America, it's not the customers' fault for not buying it. Ever. It's the product's fault for not selling. Blaming the customer is 1) a bullshit excuse and 2) the most expedient possible way to go out of business.
This has all created a buyers' market for oval tracks. In other words, oval tracks looking to buy races (through paying sanctioning fees) have a strong advantage when it comes to indyCar. IndyCar, which is looking to sell oval sanctionings, is experiencing decreased demand. If IndyCar is low on ovals, maybe the sanctioning fee is negotiable. Maybe IndyCar will work a little harder to sell to ovals if they only have four on their schedule. Maybe not. A track like Iowa Speedway, for example, is in a good position. Two NASCAR Nationwide races that each sell more tickets than IndyCar, two NASCAR truck races that will probably sell 25,000 tickets each and working hard to get a NASCAR Cup race. IndyCar will be back at Iowa in 2012, but, honestly, if I'm the track owner there, I'm feeling really good about my negotiating position with IndyCar in 2013, especially if my two Nationwide races in 2012 draw a total of 85,000 again.
So I guess we heap salvation of ovals onto the already monumental hopes for The 2012 IndyCar. That seems to be the default response lately. "The new car will fix/help with that." The Market will decide that too. IndyCar has to race somewhere, and if ovals aren't buying they're certainly at liberty to sell races to road and street courses, which are often (but not always) helped by infusion of government tax dollars.
I confess my attachment to IndyCar has loosened recently. I no longer see it as a duty to watch whatever IndyCar puts on the tube. I no longer have a "watch no matter what" attitude. I no longer ignore other forms of racing strictly out of loyalty to IndyCar. I continue to pay $150 for two tickets plus more for beverages, etc. to attend the IndyCar race at Iowa Speedway every year, but primarily because the race there is so good it makes my face sweat, not out of a sense of duty. Life is short and I have many many other things that want my time and energy, so more and more I weigh IndyCar on it's entertainment merits.
Ultimately, IndyCar gets to create their product line (race schedule) and we all get to say yes or no to buying it (by attending or watching on TV). That's what makes America beautiful.