One million dollars per year. That’s roughly the budget you’ll need to race in the auto racing circuit. This is not even a Formula 1-tier race. Add another $400,000 for the replacement race car, plus other expenses, from firesuits to portable fuel transfer pumps and other tools; you’ll be getting closer to $2 million. Unless you’re Elon Musk, you might not readily have this kind of money.
The question is, how do you raise this money if you want to be a race car driver? The answer: sponsorship. So how do you get the Red Bull or Panasonic, or UPS logo plastered all over your race car? The following discussion can provide a few insights.
Breaking Down the Cost
So we now know about the $1 million or so budget. You need to drill it down further to have a better understanding of the costs. The major components of the car will cost as follows:
- Engine and gearbox – $108,500
- Gasoline – $40,000 to $50,000
- Tire – $225,000
You will then add the entry fees of about $100,000 per year. The logistical costs—air travel, hotels, food, and others, are estimated at $10,000 per race. This is like the “cheap race.” If you’re talking about NASCAR, auto-racing insiders suggest that teams spend around $1.4 million. Teams also spend about $400,000 on firesuits, dry cleaning not included.
In other words, an obscene amount of money is required to participate in auto-racing.
How does the conversation start? Are companies willing to sponsor race car drivers and his team? A former racer and auto racing insider revealed that companies aren’t actively looking to sponsor.
- It’s your proposal. To protect yourself and your racing interests, it should be you who should come up with a plan and present it to potential sponsors. Often, sponsors look into their interest first and hidden beneath the fine prints are clauses that might not be beneficial to you. Experts warn that a reduced price on their items in exchange for brand exposure on your vehicle is not “sponsorship.” It’s merely a discounted sale. Remember, a 30-seconds Superbowl commercial is worth more than $5 million to advertisers. Although the Superbowl market is more significant, still, a NASCAR race can last for three to four hours.
- Understand marketing. Sponsors don’t know what you need, and their marketing budget is already plugged-in in so many channels, digital mostly, that yields millions of eyeballs and clicks. So why will they spend money on you only for their brand to be seen by a select niche of sports enthusiasts? You need to do the work and convince them that your channel is a viable alternative. If you’re racing in Doha where the climate is warm, convince a cold beverage company, that there’s potential to convert viewers into customers.
- Research and phone calls. You’re going to have to spend plenty of time researching before you get a sponsorship. Understand how your schedule will fit with the brand that you’re targeting. You might need to come up with a long and shortlist of potential sponsors and see if they can be a match. Make phone calls and talk to people who might introduce you to a contact inside the company.
A crucial step in all of this is, of course, to have a lawyer review the contract before you sign. Remember, you need to protect your interests even though you’re looking for sponsorships.