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What do those decals cost?

An Indy 500 car owner gets a new sponsor. What a deal--$50,000 in exchange for a decal on the car. Maybe it used to be that way but it's not as simple today.

So says Thom Burns, president of the Indianapolis-based Burns Racing Team, whose sponsors have included Coors and Kroger.

Decals are important to sponsors, but they want privileges as well. Often they expect entertainment, race tickets, continental breakfasts and champagne brunches. Sponsorship perks become a way to reward employees and good clients. Giveaways to sponsors range in value from T-shirts and hats to chauffeuring people to the Speedway; the latter may cost $2,000 a day for 30 people. Other prizes are full-page ads in race programs and 500-parade tickets.

An average presentation to woo a sponsor costs teams like Burns $5,000 to $10,000. This sum includes graphic-design expenses for logo preparation. If the potential sponsor doesn't come aboard, the money can't be recouped. Time lost on a failed plan can be expensive as well; the average sponsor relationship takes three years to develop, with a minimum lead time of 18 months.

Sponsorship prices vary for decals on race cars. The premier position, side pods, may command $250,000 to $300,000. Following that is the $100,000 rear cowl. The area just under the driver brings $50,000 to $75,000, and the rear wings $15,000 to $25,000. In last year's 500, says Burns, "there wasn't a car that didn't have $500,000 to $750,000 in sponsors." Primary sponsors have a chance to buy an "appearance package." For an extra $25,000 to $100,000 they can choose the car's color and the way it's painted, and select uniforms.

"Sponsorship deals," says Burns, "are the only way we can survive."
COPYRIGHT 1992 Curtis Magazine Group, Inc.
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Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Publication:Indiana Business Magazine
Date:May 1, 1992
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