Last week, Sports Business Report examined the Baltimore city Board of Estimates’ approval of the contract for Race On LLC and Andretti Sports Marketing to organize the Grand Prix of Baltimore. This week, the focus is on how Andretti Sports Marketing became involved, as well as its plan for 2012.
Can the Andretti name and reputation make it possible for cars again to race the streets of downtown Baltimore during Labor Day weekend? City officials and Race On LLC are hoping it will do just that.
"This has been a difficult process," Mayor Stephanie Rawlings-Blake said, "but Race On and Andretti Sports Marketing have what it takes to move forward and make this world-class sporting event successful for Baltimore."
Race On is a Maryland-based company led by J.P. Grant and Greg O'Neill. They retained Andretti Sports Marketing, a firm led by retired race car driver Michael Andretti, to run all commercial and operational aspects of the Grand Prix.
John Lopes, president of Andretti Sports Marketing, said negotiation with Baltimore city officials was an eye-opener, because talks were much more involved than city officials in other races the group has organized. Lopes said he thought city officials had gradually developed a comfort level with his team once they learned how Andretti Sports Marketing had successfully turned other races around.
"Everyone involved had to make compromises to make this best for the city," Lopes said. "We spent many sleepless nights reviewing budgets, agreements, etc. J.P. and Greg have invested a lot of money and our job is to get a return on their investment."
Lopes said O'Neill initially contacted Andretti Motor Sports in January, but he opted not to get involved at that time because of the confusion surrounding the race. A few months later, someone recommended Andretti Sports Marketing to Grant when he was seeking the contract from the city. According to Lopes, Grant's first conversation with Andretti wasn't until the last week of April.
"After several conversations, the two finally met and spent a great deal of time looking at the event before deciding to work together," Lopes said. "We then connected Grant and O'Neill, bringing together the two principals in Race On."
Lopes said Andretti Motor Sports had a lot riding on the Grand Prix because of its brand, but he thought it could work. Street races are a distinguishing coup for IndyCar and Baltimore is a key market.
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"The biggest positive we noticed in evaluating last year's event is that this place sells tickets like no other race I've seen," Lopes said. "So this could be even bigger and better, especially as Baltimore offers a unique location for this type of event."
The Andretti Motor Sports résumé includes resurrecting race events in Toronto, Milwaukee and St. Petersburg, Fla. Unlike other race organizers, Andretti Motor Sports brings a wealth of racing knowledge to the event, starting with racing royalty in Andretti.
The group also hired Kevin Healy as the event's managing director. Healy, a former AirTran Airways senior vice president of marketing and planning, is also managing director of the Milwaukee IndyFest.
Terry Hasseltine, executive director of the Maryland Office of Sports Marketing, said he saw the strengths that Andretti and his team would bring to the event.
"I think the Andretti name is synonymous with IRL racing and brings instant credibility and management leadership to the Grand Prix of Baltimore," Hasseltine said. "In addition, the Andretti team has hit the ground running with a strategy to put tickets on sale by month's end while engaging key event stakeholders locally as well as around the U.S. to help position the event for success this Labor Day."
Although it may have been a long process for city officials, who terminated contracts with two different companies within a five-month span, it has been a fast-paced process for Andretti Sports Marketing and Race On.
During just 10 days, they accomplished what couldn't be achieved during a period of several months. The new organizers:
• Secured a city agreement
• Put together stable financing with Race On
• Reached sanctioning agreements with both the IZOD IndyCar and American Le Mans Series
• Introduced a new name, logo and Web site
• Established a date for tickets to go on sale.
In addition, Lopes and his team spent two days walking the circuit. They have hired NZR Consulting to build the 2012 track and have held discussions with municipal engineers about improvements to the course.
"We wanted to see how we could improve sight lines," Lopes said, "and make any other adjustments to help maximize the customer experience."
According to Mike Frenz, executive director of the Maryland Stadium Authority, the group also has met with his office about leasing areas of the Camden Yard Sports Complex.
"We thought last year's event was successful as it provided a lot of economic development opportunities and tax revenue for both the city and the state," Frenz said. "We believe this event is worth pursuing and are here to help support the new organizers in respect to what they need from us."
Although there isn't a significant amount of risk for the MSA, financial issues with last year's organizers will require Race On to pay the MSA in advance for the use of property at Camden Yards.
The new organizers have adopted "Race On Baltimore" as their mantra and are building a campaign around that slogan. In addition to its Web site, RaceOnBaltimore.com, the group purchased about 40 different URLs that will direct people to that Web site. It also plans to activate an advertising plan in late July or early August after researching the inventory in the market.
"We will have an outdoor, digital, radio, TV and print media purchasing plan that will be back-loaded for the last three weeks leading up to the event," Lopes said. "All of this will complement our ongoing PR efforts."
Andretti Sports Marketing works in collaboration with agencies from MDC Partners and will use those resources for marketing, PR, hospitality and other services. Lopes said the company's eventual goal was to have a local staff running the race, but timing required bringing his team in for year one.
Segments of the downtown business sector felt alienated by last year's event. Therefore, it's important to the new organizers to get input from the community.
"Ultimately, the way you make a fan is one at a time," Lopes said. "We need to meet the local people and show them that we want them to be a part of this event and benefit from the race."
Tickets for the 2012 Grand Prix of Baltimore go on sale May 28. Visit RaceOnBaltimore.com for details.
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