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Backmarker: Win Sunday, Sell Monday

Thursday, August 15, 2013
2013 BMW Motorrad GoldBet SBK Team riders Chaz Davies  left  and Marco Melandri  right .

Marco Melandri (right) and past Daytona 200 winner Chaz Davies (left) are currently fourth and fifth in the Superbike World Championship standings. The standing of the BMW factory team, however, is shakier. 

Whatever happened to “Win on Sunday, sell on Monday?”

Last month, World Superbike fans were surprised to read that BMW Motorrad would no longer have a factory presence in the series after 2013.

The announcement landed with a thud in a season when, commercially speaking, motorcycle road racing could stand a little more good news. Rossi’s return to winning ways, the emergence of Marc Marquez as another alien and the written-in-Hollywood storyline of Lorenzo and Pedrosa’s synchronized collarbone fractures all boosted fan interest, which is good. But here in the U.S., television coverage is sketchy—AMA teams panicked when they were told their Laguna Seca races wouldn’t be televised at all. Grids are sparse, and attendance is down in key European markets. Spain, Portugal, and Italy are in economic freefall. Unemployment among the young men who make up the audience for motorcycle racing is ridiculous.

In that context, BMW’s announcement sounded like really bad news.

“At the end of the 2013 season, BMW Motorrad Motorsport will terminate its factory involvement in the FIM Superbike World Championship. The main focus and some of the resources of BMW Motorrad’s commitment to sport will switch to other motorsport activities like the successful international customer sports programme from 2014 on.”

Racing industry insiders may have been more sanguine than fans. We’ve heard this all before, for starters. They were going to withdraw before the 2012 season, too. And BMW’s existing factory SBK team blurs the definition of “factory” anyway. Although the factory continues to handle motor development, BMW doesn’t administer the team. The team’s actually Feel Racing, doing business as BMW GoldBet Italia. Feel Racing is based 10 kilometers outside Bologna, and was previously the Ducati ‘factory’ race shop.

BMW’s press release seemed to suggest they’d be working with privateer teams in 2014, although it was shy on details. Meanwhile, new SBK rules are being formulated by (new owners) Dorna, who just dropped this cryptic release:

Following various meetings between the FIM, Dorna and the MSMA, a new framework has been put in place for the progressive application of the new Superbike rules. The new rules are aimed at reducing costs for the motorcycle and its components.

1. The rules changes for the 2014 FIM Superbike World Championship season will be as follows:
• A limited number of engines (eight) per rider/per season.
• A limited number of gear ratios.
• A price cap on the brakes.
• A price cap on the suspensions.

2. In order to ensure that there are a sufficient number of riders with competitive motorcycles on the grid, the MSMA has agreed to provide, on request, a complete motorcycle package at a fixed price, for the years 2014, 2015 and 2016.
The motorcycle packages supplied will be the same as those used by the manufacturer and will receive certain updates and maintenance from the manufacturers during the season.

3. Under the new rules, there will be a sub-category known as the EVO class. This class will follow the FIM Superbike technical regulations for all chassis, suspension and brake components. On the engine and electronics side, however, these motorcycles will follow the present FIM Superstock rules. The price cap on brakes and suspensions will be the same as Superbike.

More details about the EVO technical rules will be available on the FIM Website shortly.

A draft of the new technical rules will be published on the FIM website by 26 August.


So, I guess we’ll know more in a week or two. For those of you who don’t study the Byzantine structure of World Championship racing, ‘MSMA’ stands for Motorcycle Sports Manufacturers’ Association. It is the group that looks after the factories’ interests in MotoGP and SBK.

Eugene Laverty  58  was able to keep a slight advantage over Tom Sykes  66  in Race 2 at Assen for the win.
Is Dorna trying to squeeze factory teams out of the Superbike World Championship with its new rules for 2014?
One reading of this release is, the factories will be obliged to sell private teams bikes like the ones they race, at a predetermined price. Another reading is, Dorna doesn’t want factory teams in the Superbike World Championship at all.

Sorry, Aprilia.

I think there’s another reading of BMW’s decision, and it bodes even worse for organized, sponsor-driven, high-level racing. I think that manufacturers have stopped believing in the old dictum, ‘Win on Sunday, sell on Monday.’

Honestly, it may never have been true. A lot of factory race teams have been engineering vanity projects. Repeating the mantra Win on Sunday, sell on Monday over and over was something engineers did to convince bean counters that they should be allowed to blow millions building special, one-off bikes and spend more millions paying lunatics with no sense of self-preservation to ride them.

Winning the Daytona 200 in 1970 is certainly not what established the Honda 750-Four as the definitive superbike of its day. It was totally dominant in the marketplace from Day 1. Honda didn’t need to race it.

Then there’s the old saw, “Racing improves the breed.”

With spec ECUs coming into racing, the single most important development area—electronics—has been taken off the table. Rules in MotoGP and SBK continue to be restricted in the interest of reducing cost. Meanwhile, advancements in engine management, traction control, electronic suspension adjustment, and anti-lock brakes proceed apace on street bikes which will soon, in some ways, be more advanced than their world championship counterparts.

BMW launched the S1000RR in 2008. It was instantly acknowledged as the best machine in its class, redefining BMW’s whole Motorrad division in the process. It was also an immediate commercial success. It’s lackluster early years in the Superbike World Championship definitely did not contribute to that success.

Valentino Rossi on the grid at Brno.
Even though Valentino Rossi couldn't win a MotoGP race with his Ducati, the Italian brand was one of the quickest to bounce back after the recession.
Meanwhile, Ducati’s long period in the MotoGP wilderness—when even The Greatest Living Racer could not win on their machine—did not hurt the company’s commercial prospects. BMW and Ducati have emerged from the recession far quicker than Honda, Yamaha, Kawasaki, and Suzuki have, even though the Japanese companies have done far better in MotoGP, SBK, and AMA Superbike championship racing.

So much for ‘Win on Sunday, sell on Monday’, eh?

If it was ever true, that aphorism was coined back in the days when fans actually sat in grandstands. Back then, every fan saw every bike in the field for about the same amount of time. But eventually, a cycle of increased television viewership bringing increased sponsorship drove the cost of participation so high that only an enormous broadcast audience justified the investment. One problem with that was, TV audiences pretty much only see the top three guys. Paying a fortune to just participate, and languish in mid-pack, is a terrible investment from a bean counter’s perspective.

Here in the U.S., the proliferation of cable channels further dilutes the potential value of TV exposure. AMA Superbike racing is broadcast on the CBS Sports cable channel. CBS just sent out a breathless press release about the really great audience they had for coverage of the final round of the PGA (golf) Championship.

What’s great, from CBS’ perspective? According to Nielsen, the show had an overnight rating of 4.4/10. Less than 5% of all households tuned in—and that’s for golf, a sport with a vastly larger fan base. I work in the ad industry and even I can’t find audience data for AMA Superbike broadcasts. Maybe it’s not measurable.

To make matters worse, television itself is threatened by the internet, which has already severely eroded audiences.

Sure, you can watch MotoGP races live, online, if you want to subscribe to motogp.com’s VideoPass. Right now, you can pick up a half-season pass for 50 Euros. On the face of it, it would seem that MotoGP’s embraced the internet, and they’re surely pulling a few million in from web subscription fees. But by charging for the feed—or at least, by charging that much—they’re greatly reducing the size of the web audience. That makes competing in MotoGP a lot less attractive for manufacturers and sponsors.

As race promoters increasingly seek to offset falling ticket sales with sponsorship, and broadcasters use sponsorship to offset ad revenue (which they’ve lost to internet advertising) there’s less and less sponsorship available to the teams (and riders) that provide the spectacle.

But wait, it gets worse.

The enormous audience that watched the Stratos Jump will surely encourage a shift from racing sponsorship  in which theres only a return on investment when your team wins  towards branded content.
The enormous audience that watched the Stratos Jump will surely encourage a shift from racing sponsorship, in which there’s only a return on investment when your team wins, towards branded content. See video of the jump below.
About 10 months ago, Felix Baumgartner parachuted to Earth from the edge of space. 8,000,000 people watched it live on YouTube. The most-watched YouTube movie of his jump has been seen 35,000,000 times, and it’s been watched countless other times in various spinoff versions and on other media. The icing on the cake (froth on the Red Bull?) was that it also completely dominated the conventional media news cycle for about 24 hours. Ad agency WPP said that the media value was measured in the tens of millions of dollars, and it’s still accruing.

Baumgartner’s stunt—dubbed the Red Bull Stratos Mission—took ‘branded content’ to a new level. Precisely 128,100 feet. It should have struck terror into the heart of anyone in an expensive, sponsor-driven sport like professional motorcycle racing.

Red Bull is still pumping a ton of money into racing. But I can guarantee you that branded content exercises like the space jump will, in the future, take money out of race sponsorship budgets.

Only slightly closer to earth, Greg Tracy, who has won Pikes Peak on two wheels, has starred in a bunch of Hot Wheels videos. The Hot Wheels YouTube channel has garnered over 130 million views.

The Hot Wheels videos have big production budgets, and a lot of that money did come at the expense of race sponsorship. Hot Wheels was the primary sponsor of Danica Patrick’s 2010 Nascar season, but although she attracted lots of media attention off the track, her performances were lackluster. No sponsor can be assured of running at the front in a high-profile series. But on your own YouTube channel, you’re guaranteed to be the star. And if things go wrong, there’s always another take. (OK, not in the case of that space jump, but you get my drift.)

Speaking of drift... Jorian Ponomareff’s most-viewed motorcycle drift video has been seen over 20 million times. I’m not even sure what he’s riding; he obviously doesn’t have a primary motorcycle sponsor. His main sponsor seems to be Freegun Underwear. Again, for now, Freegun sponsors MX racer Ashley Fiolek, but I can guarantee you that her exposure—even as media-savvy as she is—doesn’t compare to the drifter’s.

There is no question that in the future sponsorship investment will shift from racing towards branded content. As a slogan, “Skip the race on Sunday, sell some other way on Monday” is not too catchy. But it’s the new reality. 



Ex-Pikes Peak motorcycle record holder Greg Tracy gave Mattel a lot more for their money than Danica Patrick.



I’m not even sure what bike he’s riding. But considering that this video’s been watched over 20 million times, some manufacturer should be awfully angry at the marketing genius that rejected Jorian Ponomareff’s sponsorship pitch.

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Comments
KrispyKokoPuffz   August 16, 2013 08:15 PM
Try looking at it from the other side. Professional racers are losing sponsorship money to Internet sensations because viewers are tired of looking at professional racing. They want to see something different and sensational. Doesn't hurt if the show is produced in a way that allows the stars themselves to interact more clearly, in a way that is easier for the audience to see and enjoy. Compare it to walking along the beach at Lake Havasu with a video camera, vs partying with a single boatfull of babes. The cream is rising to the top and leaving the milk thin in the process. Think of it as another type of winning.
philthy_utah   August 15, 2013 09:04 PM
I can't believe Dorna's creating a WSBK subclass. It's crappy enough in MotoGP. Ever try explaining the sub-class/race within a race to other motorsport fans? It's a joke.
Piglet2010   August 15, 2013 08:38 PM
"Jorian Ponomareff’s most-viewed motorcycle drift video has been seen over 20 million times. I’m not even sure what he’s riding..." - modified Honda CBR600RR (from what I have read; I could not identify it either).
Backmarker   August 15, 2013 03:21 PM
Good point, Jorgy82. Although the size of that "gray market" viewing audience is a.) hard to quantify, and thus doesn't figure as easily into sponsors' calculations and b.) it's actually funded by other advertisers who have nothing to do with the official events or broadcasters. It's worth highlighting that videos like the ones on the Hot Wheels channel are available free to viewers, and viewership there is easily quantifiable.
Jorgy82   August 15, 2013 02:30 PM
"But by charging for the feed—or at least, by charging that much—they’re greatly reducing the size of the web audience." You got that mostly correct. However, there is a large fan base that will stream it from the hundreds of sites on the web or wait until we can download a torrent, for free, of the race and watch it then. The broadcasts of MotoGP races are few and far between in the US. When they are televised, they are basically unwatchable due to the horrible commentary and commercials.