Greg Zyla 2012-12-21 01:27:01
Belonging to one of motorsports’ legendary families, Cary Agajanian has transformed his passion for the sport into a successful career as he helps a variety of participants in a quest to see auto racing thrive. This month, we visit once again with famed motorsports attorney, promoter and race car owner Cary Agajanian, who we last spoke with in January 1989. Agajanian is the founder and principal of Motorsports Management International, LLC (MMI), a full-service sports management company representing professional race car drivers. His law firm has offices in Los Angeles, California (Agajanian, McFall, Weiss, Tetreault & Crist LLP), and Charlotte, North Carolina (Agajanian & Anthony, PC). In 1932, Agajanian’s father, the legendary, JC “Aggie” Agajanian, entered Southern California’s fledgling motorsports industry as a car owner and coined the term “sprint car.” As a race team owner known for helping talented drivers and always wearing his signature Stetson cowboy hat, JC was a popular figure at the Indianapolis 500 for over 30 years. He earned two Indy 500 wins, one in 1952 with driver Troy Ruttman, and the second in 1963 with Parnelli Jones. During that period, young Cary Agajanian worked as a pit crew member on the famed No. 98 Agajanian Special, and later honored his family’s Indy tradition by entering the No. 98 in several Indianapolis 500 events following JC’s passing in 1984. Agajanian, along with brothers JC Jr. And Chris, have also been recognized as motorsports pioneers in the areas of track ownership, event promotion, media/TV production and legal consultation. They are known for operating the famed Ascot Park dirt track near Los Angeles. Over the past 50 years, the Agajanians promoted some 4000 auto and motorcycle racing events, including the annual Turkey Night Grand Prix. They’ve also been advocates of legal protection for track owners, sanctioning bodies and drivers. Currently, MMI provides marketing and consulting services in the motorsports industry. (For more information about MMI, visit www.motorsportsmanagement.com.) After its creation, MMI grew to become one of the largest motorsports representation firms in the United States, with an impressive client roster and client management team. In the following interview, Agajanian discusses how things have changed since our initial 1989 interview, why motorsports is still a best buy for companies large and small, the success of our still-growing aftermarket, how sponsorship has changed, marketing in a crowded business arena and much more. PRI: Cary, let’s begin with how marketing and sponsorship has changed since we last spoke in 1989. It seems that many professional racers now have NFL type agent representation. Agajanian: Yes, and things have changed over the years. Today, the sponsorship side of motorsports has become more difficult, as there are many more non-racing venues for sponsors to put their money. Currently, the stick-and-ball sports are sucking up a lot of the monies, even though racing still has the best value, ROI (return on investment) and billboard impact, even more so than the NFL. Pro baseball, basketball and soccer, too, all do professional marketing jobs, so we’re competing for sports dollars in an economy that, not surprisingly, becomes an additional issue. This results in difficulties for the ‘little guy’ because of what goes on in the upper levels of racing. PRI: OK, let’s define the “little guy” and explain what exactly is going on at the upper levels. Agajanian: Glad to. As for the “little guy,” I could define that as ARCA or K&N East or West, which, in reality, isn’t really a “little guy” situation compared to the real “little guys,” which are the short track Saturday night racers. The sponsorship concern is what is happening in the upper levels, as the bigger teams are now inking smaller sponsorship deals and piecing them together. When we spoke in 1989, a team usually had the same sponsor in Cup or IndyCar for the full season. Today, you see a major sponsor for three or six races, then a different one and so on.These “three and six race” sponsors may have been on a short track or “little guy” car prior, but they’ve moved up because there are now good deals at the higher levels, where exposure is much greater.So it’s tougher for the short track teams to find sponsorship. PRI: With that said, I’m sure neither you nor I want to give the impression of dimming chances for smaller teams to secure sponsorship. I’ve said before at sponsor seminars that the best offense for a small, local team at a short track is to reduce the cost of racing via several, small, area-based sponsors that can give $500 to $1000 a season to lower the cost of competing. Agajanian: Well noted, and that’s the whole point. The smaller sponsors like area restaurants and garages that are (geographically) close to the race track are fertile ground for all small race teams. These sponsors will never be able to reach a Cup-type budget, or even a Camping World Truck, but they sure can get great exposure at the local race track.So, there are great opportunities at the short track level, it just takes a well put together program put in front of a prospective sponsor to deliver value. PRI: What about the mid-level racers? Agajanian: I think it’s probably more of a problem for the mid-level “little guy,” if you will, who is running in ARCA, Indy Lights and K&N. That’s probably the bigger challenge (because the money has moved up to Nationwide, IndyCar and Cup). PRI: We talked of the tremendous growth racing was experiencing back in 1989, thanks to more television and so on. What about today? Can you share your feelings about overbuilt race stadiums and the cost of going to a professional race? Agajanian: The overbuilt stadium question is easy to answer in one respect, but no one seems to focus in on it. In the NFL, a stadium may be shown on game day with no empty seats, but it’s only a 55,000-seat stadium. The media doesn’t point that out enough, or the fans themselves don’t point it out. In IndyCar as well as NASCAR, if the current stadium race tracks were 55,000 people capacity, you’d have long lines with people trying to get in. Thus, motorsports still attracts tremendous crowds, although some in overbuilt stadiums. The operators and promoters were trying to accommodate fans by overbuilding, but once you learn, you adjust. Today, you see stadiums contracting all the time, but I don’t see it as big a problem as it is depicted. PRI: And the cost of attending a race? Agajanian: I’ll admit the economy has hurt the fan base, as it is expensive to travel with fuel costs and hotel rates. I think on the NASCAR side, although I don’t have a solution, you see the various support systems like hotels charging extreme rates to stay, which is a contributing factor to the crowd turnout. I understand it is a supply and demand issue with hotels, but the promoters have made it easier for fans and families to camp, so they are coming up with clever ways to address this high cost of lodging. PRI: Litigation is still a top-of-mind concern for all promoters in the country.Have race operators and sanctioning bodies done a better job with the release and waiver aspect of motorsports, both sportsman and professional? Agajanian: When I look back over the last 20 years, there are two important issues in the liability and litigation side of racing. The waiver and release I was so concerned about many years ago has continued to improve and get stronger. On the other hand, there have been some suits across the country in which the courts have, even though the waiver and release were written properly, decided that there are certain instances that make the waiver ineffective. This came about in the Doug Wolfgang case (famed World of Outlaws driver), where the lawyer in that case found a way around that waiver and release, and his method and strategy of beating the release, so to speak, has been picked up in several other states. Although we continue to battle that, it is an issue. But overall, the waiver and release and the defenses in motor racing have continued to protect the associations, car owners and virtually everybody, as they should, unless there was some truly egregious malfeasance, you might say. PRI: Let’s touch on driver safety. Agajanian: Well, this question and your prior one on litigation are connected, no question about it. Driver safety has greatly improved thanks to the HANS device, better helmets and the construction of the cars. The race tracks have become safer for the competitors thanks to SAFER barriers, and there is now much better safety for crewmen, people conducting business in the restricted areas and so on. The short track industry and insurance folks that take the risk have built more and more barriers in the restricted areas, so we don’t have as many incidents with people getting injured in garages or pits.Those safety factors have contributed to a lessening of liability. PRI: When Bobby Allison nearly went into the grandstands at Talladega in 1987, the other side of that very scary coin is that it was almost a blessing in that it let us know what could happen if we didn’t address the incident. Since then, efforts involving race car containment and development in further lessening impact forces, overall, have proven very positive for our sport. Agajanian: Well put and absolutely true. To the credit of IndyCar on the SAFER barriers and fencing and everything that NASCAR, ISC and Bruton Smith’s Speedway Motorsports have accomplished, they all saw the potential of what happened with the Bobby Allison accident, and made tremendous strides.Now, with that said, we must continue to be vigilant because a lot of the really strong safety features as far as the drivers go also came from the Dale Earnhardt tragedy in 2001, and other drivers during that time that we lost. PRI: Speaking of IndyCar, I’d like to ask your opinion of the Randy Bernard exit as CEO, and even more importantly, Roger Penske’s response, in that Penske feels it hurts a business whenever you replace a CEO every two or three years, as it doesn’t allow the creation of a strong business foundation. Do you agree with Mr. Penske? Agajanian: I agree 100 percent with Mr. Penske’s statement. The issue we face today with Randy Bernard leaving is the organization he leaves behind, and how he was able to bring people around him and build a support system to keep the operation going in the proper direction.Does a new CEO change the direction or have the time to build the support staff around him immediately? Or, does it take more time? It is a disappointment as I feel Randy brought some very good attributes and worked extremely hard. It was also interesting to me because one of the advantages, with full regard that there are disadvantages, was bringing someone in with no knowledge of the sport. I saw it as an advantage overall because he came in with a clean sheet of paper with no agenda other than to make the series more successful. I feel everything he did was an attempt at that. I hope we don’t face another vacuum in leadership. In that regard, maybe there is an overall plan to improve because Jeff Belskus (interim CEO of IndyCar and president of Hulman & Company) is a very, very smart businessman. So, it’s too early to predict how this will all end. PRI: What about the aftermarket? In 1989, we were both surprised by its overall business strength and expansion.Here we are in 2013, and even with a mediocre economy, aftermarket hardcore companies are thriving. Agajanian: It’s easy today to say the success of the aftermarket doesn’t surprise me. But four years ago, when the economy took a major downturn, the area I watched was the short track business, because that’s where I grew up. So, while lecturing at a Promoter’s Workshop (RPM) a few years ago, I noted that the interesting thing I saw that was similar to 1989 was that we again were experiencing short track contraction, just as we did in 2012 again. However, I don’t see this as an economically negative situation.I see this as a basic correction in the excess of tracks, similar to the number of grandstand seats we spoke of. Instead of 1000 race tracks, we now have 900, but the quality of the promoter continues to improve. Thus, the short track industry has not suffered a serious hit by any means. There are many short tracks that are still doing as well as they were, which is amazing when you look at the economy. The success of short tracks, drag strips, road courses, nostalgia racers and now even drifters, which we haven’t touched on, automatically carries the aftermarket along with it. This means the aftermarket will continue to grow as grassroots motorsports grows, resulting in a very resilient industry tied directly to it. PRI: And what about when the economy comes back? Agajanian: There will be an even greater resurgence. PRI: How about your association with Mike Curb? I understand you and Mike are on to something new in race driver investment and marketing. Agajanian: Yes, we are. Glad you asked. Right now, Mike and I are putting parts of our operation together, meaning some of Curb merges with some of MMI resulting in Curb Agajanian Performance Group. Curb and I have continued to support a lot of different teams, but what we are developing now is a support system with young drivers with Curb Records as a major sponsor. We’ll assist young drivers with support, which will allow them to make deals with various race teams in either IndyCar or stock car racing. PRI: Isn’t this “ride buying?” Agajanian: That’s what it’s called. It was a concern in 1989 and is a bigger concern now. PRI: OK, so how do you and Mike Curb specifically address this? Agajanian: I believe talent should always win out, but so many talented kids now can’t find their way up through the short tracks to the higher levels because of the driver with a pocket full of money or a sponsor to bring along. That’s a way of life. Mike and I sat down, and decided to do something to help the grassroots driver, like a Kevin Swindell, who won an ARCA race with us in the Venturini car.You’ll also see Chad Boat (Billy Boat’s son) and five or six other kids in 2013 that Mike and I will help and mentor. We’re changing our business model to include this new wave of young great drivers coming along like, and these drivers aren’t necessarily clients, Bryan Clauson, Kyle Larson, Ryan Blaney, Michael Lewis,Chase Elliott and so on. The Stewarts, Johnsons and Gordons are not yet ready to retire, but their replacements are starting to show up to supplant them. We’re hoping to help them along. PRI: And the return on investment? Agajanian: The drivers will bring exposure for our company and then, because of the financial benefits to and from Curb Agajanian Motorsports, we’ll be paid on a commission basis if our drivers make it to the top. Then all of the monies we’ve invested through the years through our support system will come back.
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