WorldCity Business Magazine

Hot commodity

by Mary Dempsey

Sports marketers arealways looking forthe next big thing. They’re gambling that it may be found with young, articulate globe trotters like Nelson Philippe.

Ask Nelson Philippe to describe an off day at work. “On a bad day, I catch on fire,” he says, without missing a beat. Fifteen times a year, the 19-year-old Frenchborn race-car driver, now living in Key Biscayne, climbs into his single-seat high-performance Ford Lola and pushes the vehicle’s speedometer past the 200-mile-an-hour mark on oval tracks and street courses in Las Vegas, Toronto, Mexico City, Australia and South Korea.

Not only does he treat his racing career as a business, Philippe knows that to make it grow he needs to catch the eye of corporate sponsors. And he’s on the track to make that happen. He’s trying to master the intricacies of the multibillion-dollar world of sports marketing.

“Sports marketing in the United States is twice the size of the auto industry and seven times the size of the movie industry,” says Jason Teitler, director of sports marketing at the New York office of public relations firm Porter Novelli. “Eighty-seven of the top 100 U.S. companies dedicate a portion of their budget to sports marketing.”

A recent study released by PricewaterhouseCoopers calculates sports marketing in the United States as a $42.1 billion industry and projects that it will grow to $57.4 billion by 2009.

Sports marketing is not new. In the 1930s, baseball great Babe Ruth appeared in everything from print ads for Wheaties breakfast cereal to baseball-signing sessions for Goodyear Tires. By some estimates, he earned as much as $500,000 in his lifetime apart from his baseball salary in marketing-related income.

But it’s just been in the past generation that athletes have become global brands. Think Michael Jordan, David Beckham, Lance Armstrong and sisters Venus and Serena Williams. Furthermore, as the sports marketing world has become bigger, it has also become more sophisticated.

Refining strategies

Part of that sophistication is the targeting of particular demographics. Where once a single athlete could sell anything to the mass market, corporations are now fine-tuning their approach to connect directly with the sub-group of consumers they want most. Sometimes the products have nothing at all to do with sports or even sports equipment. Athletes are now associated with pharmaceuticals, with social causes, with computer games.

On paper, Philippe, a member of the Mi-Jack Conquest Racing team, doesn’t sound like a magnet for endorsements. He’s not a precocious racer at the apex of the motorsports world, Formula 1 racing. Rather, Philippe races a level lower in the Champ Car series, the Indy-style competition known until 2004 as CART, or Championship Auto Racing Teams. And he’s won no races. Yet.

For another thing, while it sounds impressive to hear that he entered his first race at age 12, that actually makes him a late bloomer in the car-racing world. Spaniard Fernando Alonso Daz, who in late September at age 24 became the youngest Formula 1 champ, began driving a go-kart when he was 3. Famed Brazilian racer Ayrton Senna, who died in a fiery crash in 1994, was zipping around in a go-kart at age 4 and allegedly piloted the family car by age 8.

But today’s endorsements are no longer reserved for well-known athletes, the winners with an already established following. Instead, companies are working to see if they can hook up with potential winners the sports celebrities of tomorrow. In the process they’re trying to build relationships with niche audiences. That’s where Philippe has the edge.

“My stock as a driver is rising,” the racer says. “I’m not winning yet but I’m doing very well. And people are willing to sponsor me because of that.” For the current eight-month racing season, his principal sponsors include Wellbox sports-training equipment and corporate vehicle-leasing company LeasePlan.

“I really do think he would be worth an investment by anyone,” says sports editor Kate Shaw, who has been covering Philippe for the publication RaceFamily Motorsports, better known as RFMSports. “Because he’s young, he has a long development curve. And he’ll work with you. He’ll stand up for what he thinks, but he won’t insist on having his own way if things are explained to him and they make sense.

“That makes him different. Regular drivers just have an attitude of give me the money,’” says Shaw, whose publication is based in Toronto.

Shaw first interviewed Philippe at the Molson Indy in Montreal, not long after he joined the Champ Car circuit. “Last year when I met him, he was your basic 18-year-old. He was quite upset that no one would take him seriously. People figured he was young, that he didn’t know anything,” she recalls. “He has matured a lot in the last year. He understands this is not an easy road and he’s willing to work for what he gets. His team is very high on him. They say he picks up every single thing he’s told and goes with it.”

Shaw says Philippe has extricated himself from on-track predicaments that have stumped racers twice his age. And he rarely blames anyone but himself when he doesn’t race as well as he should.

It’s not just that an increasing number of insiders are predicting good things for Philippe on the race track. Or even that he’s well educated, well spoken and polished where many of his tough-talking race colleagues are not. Or that he’s involved in motorsports, one of the big-money segments of the sports marketing industry. NASCAR racing alone brought in more than $1.5 billion last year in sponsorship revenues.

It’s that he appeals to a prime demographic: males between the ages of 18 and 34. And even more, his marketing sphere is not limited to U.S. corporations or U.S. venues. Philippe speaks French, English, Italian and Spanish. In addition to France and the United States, he has lived in Argentina. He’s used to traveling and he’s polished. He’s already proven that he can handle himself in front of audiences on five continents.

The sports market worldwide is growing 6.1 percent annually and, measured by sales, will surpass the

$111 billion mark by 2009, according to the PricewaterhouseCoopers research.

Following the money

Race fans that follow Champ Cars are three times more likely to spend $35,000 or more on a new car in the next year. They are 84 percent more likely to carry PDAs than the population at large. And a third of them make more than $75,000 a year, according to George Desvignes, who serves as Philippe’s marketing representative in Miami.

Furthermore, they own computers, spend three-figures on their monthly cell-phone bills and more than half are college educated.

But why would a company endorse Philippe over one of his teammates? Maybe because he understands the sports marketing game. Just as he travels to California once a month to see celebrity fitness trainer Gunnar Peterson, works out every day by mountain biking, running, canoeing or jet skiing and calls his mental trainer in England when he has trouble focusing before a race, Philippe also invests time in grooming himself for his corporate backers. Between races, he methodically sets aside part of every morning for meetings with sponsors and potential sponsors, for radio and phone interviews and for paperwork.

“Of course we’re looking for major sponsors, but we’re also building events to have partnerships,” says Desvigne. Beyond Philippe’s Web site, the racer has an official marketing package that offers companies a list of services in exchange for their backing. Philippe is willing to show up at groundbreakings and receptions, he’ll wear a company’s logo on his jumpsuit when he competes or he’ll give sponsoring executives and their guests VIP treatment at a race.

The sponsors “will bring either potential clients or good clients of theirs and show them what racing is all about,” Philippe says. “They get to see the race. They get into the pits to meet other drivers and the owners of other teams. They sit in the cars. Then it’s a big party.

“There are pretty girls and fast cars and these guys are hanging out with the people who are really part of it,” Philippe says. “It’s a great experience.”

Both racers on Philippe’s Mi-Jack team look for individual sponsorship. The team itself courts sponsors. But Philippe offers his backers an unusual combination of business savvy and racing skill. He’s willing to play real-time video games online with fans, if that’s what a sponsor wants. He’ll speak at company events. He’ll take a team car to corporate headquarters. A well-known clothing label recently did a practice fashion shoot with Philippe as it considered whether to add its endorsement to his lineup of sponsors. “If I have to model for my career, I will,” he says. “I’m not opposed to new experiences.”

Added bonus

There’s something else he brings to the table. And that’s a personal style. Most of the Mi-Jack racers have short hair or shaved heads. At the racetrack, Philippe’s long blond hair is the subject of jokes and there are rumors the team may ask him to cut it. At recent races, the team’s handlers only allowed photographers to shoot Philippe with his cap on, his hair hidden under it.

He may also be the only member of his team who immerses himself in literature and books on philosophy. He avoids night clubs and claims to go to bed early. When he competes, he wears a sponsor’s T-shirt and his jumpsuit for racing. But closer to home, he’s dresses more like a Miami Beach fashion-setter than a fearless motor-man whose first love is a race car.

“The typical way for a young racer to behave is buying yachts and auditioning girlfriends. They’ll talk big, even if they haven’t won any races,” says Shaw at RFMsports. “You don’t get that from Nelson.

“He’s showing that once he gets another year or so under his belt, he’ll be someone to watch. He’s no flash in the pan.”