The SX/MX Deal of the Century
or, What's Bubba really worth and what it means...
You have heard the rumors, here's the real story:
Bubba is looking at a blockbuster deal that is so big, it makes an OEM's racing budget look irrelevant!
If things go his way, he could be looking at a $50-70 mil five-year deal with Boost Mobile, Coke, Visa and Nike. This bikes do not have to be Yamahas either. With that kind of money, the sponsors can make the call, and of course the rider worth that much will get his way. The $30 mil rumor that was kicking around was just the initial Boost part, but the rest together make it much larger.
Is an rider worth that much? Absolutely! Who cares if you can't sell enough dirt bikes to make that up? This is the big-time NASCAR-esque marketing the sport has waited for and just dreamed about.
Sponsors and industry types are excited about what news of this kind of deal means. Other sponsors with similar cash will want to compete, so the top riders now may benefit from more coming in. Will this turn the SX/MX pits into mainstream marketing? Will the pits look like NASCAR pits? MC wanted his team to do that, but it just didn't happen. Bubba's just 17 and his widespread appeal and bright future can make it possible, at least for him.
What's really happening:
Bubba turns 18 in December. There is a rush to put some new mega-deal together before then. His current contracts made in his behalf before then will be binding when he is 18. If something changes before that, well, that's different. If Kawasaki, for example, goes along with the Boost Mobile, Coke, Visa and Nike deal, they can do it. News has already spread about the possibilities, and you can bet the other teams are working overtime trying to either attract the Boost Mobile, Coke, Visa and Nike combination (which started out assuming it would be Yamahas), or put together something better if they want to and know how.
The money is way too big for a factory to dig deep and even try a bidding war for Bubba. This is more like an exercise in marketing. More specifically, bringing in the right outside the sport dollars to get the best guy is what the OEMs need to be thinking about and doing.
What happens to factory teams:
Of course it is too early to announce the end of factory team domination of the sport, but when outside interest is as loaded as this deal, it makes you wonder. Right now, the sport's politics seems like a little banana republic run by 5 powerful families that get what they want and don't need to change anything. They use the AMA as political/marketing utility and for legitimate sanctioning, and everyone's happy-at least the people in charge are. If mega-deals take over, the factories and AMA both can become less relevant, except for the sanctioning-that is crucial. In NASCAR you don't need millions from the car makers, so you would think the motorcycle OEM's would be thinking "heck yea, let's just hand over some bitchin factory bikes and support, an let someone else pay the bills." The other side of that is they loose some control, and the little banana republic becomes a scary democracy with even richer families in the mix.
Maybe the factories will need to learn how to go to the outside for big team money, or the Boost Mobile, Coke, Visa and Nike competitors will come looking for their own riders and teams, no one really knows.
What happens to suppliers:
Right now, suppliers have to put a lot of money into racing to get their product on the track or on the rider's body. The non-factory teams rely on getting cash from each supplier to cover the operating budget-so much from the gear people, the boot people, the bar people, etc. A team funded by a mega-deal could just use what they want and not have to charge the suppliers to use the gadget or wear something.
What happens to the AMA (AMA Pro):
AMA race sanctioning would remain important, but AMA Pro may not be able to use the OEMs as their trump card if another fuss like the failed Jam Sports deal comes up. CCE is the dominant promoter and when AMA Pro wanted to fire them, the battle came down to CCE owning "events." and AMA Pro owning the "series." AMA Pro contracts the series back to CCE and charges a "rights fee" for each event. AMA Pro counted on having the OEMs support when things got rough because they invest their racing money to get AMA #1 plates. The OEMs really held the cards, so they pulled AMA Pro's strings. If teams were mega-funded like this Boost Mobile, Coke, Visa and Nike thing, why do they care what AMA Pro's agenda is besides keeping score? They could buy AMA Pro with their lunch money.
Will the sport be better off?
Absolutely. You won't find too many people who say this is a bad thing. The more Bubba is worth, the more everyone benefits. The OEMs may not have the same lock on everything as they do now, but at the same time they may see some relief from the huge salaries and bidding wars they get into if more mega-deals pop up.
Bottom line: Where is Bubba racing in 2004?
Who knows? It looks like this is not going to be a contest over who can dig the deepest into their own pocket. It's all sports marketing after this (someone else's pocket). Kawasaki and Yamaha have a head start, but anything can happen. The deadline is in mid December for the long-awaited deal that may start to change everything.
or, What's Bubba really worth and what it means...
You have heard the rumors, here's the real story:
Bubba is looking at a blockbuster deal that is so big, it makes an OEM's racing budget look irrelevant!
If things go his way, he could be looking at a $50-70 mil five-year deal with Boost Mobile, Coke, Visa and Nike. This bikes do not have to be Yamahas either. With that kind of money, the sponsors can make the call, and of course the rider worth that much will get his way. The $30 mil rumor that was kicking around was just the initial Boost part, but the rest together make it much larger.
Is an rider worth that much? Absolutely! Who cares if you can't sell enough dirt bikes to make that up? This is the big-time NASCAR-esque marketing the sport has waited for and just dreamed about.
Sponsors and industry types are excited about what news of this kind of deal means. Other sponsors with similar cash will want to compete, so the top riders now may benefit from more coming in. Will this turn the SX/MX pits into mainstream marketing? Will the pits look like NASCAR pits? MC wanted his team to do that, but it just didn't happen. Bubba's just 17 and his widespread appeal and bright future can make it possible, at least for him.
What's really happening:
Bubba turns 18 in December. There is a rush to put some new mega-deal together before then. His current contracts made in his behalf before then will be binding when he is 18. If something changes before that, well, that's different. If Kawasaki, for example, goes along with the Boost Mobile, Coke, Visa and Nike deal, they can do it. News has already spread about the possibilities, and you can bet the other teams are working overtime trying to either attract the Boost Mobile, Coke, Visa and Nike combination (which started out assuming it would be Yamahas), or put together something better if they want to and know how.
The money is way too big for a factory to dig deep and even try a bidding war for Bubba. This is more like an exercise in marketing. More specifically, bringing in the right outside the sport dollars to get the best guy is what the OEMs need to be thinking about and doing.
What happens to factory teams:
Of course it is too early to announce the end of factory team domination of the sport, but when outside interest is as loaded as this deal, it makes you wonder. Right now, the sport's politics seems like a little banana republic run by 5 powerful families that get what they want and don't need to change anything. They use the AMA as political/marketing utility and for legitimate sanctioning, and everyone's happy-at least the people in charge are. If mega-deals take over, the factories and AMA both can become less relevant, except for the sanctioning-that is crucial. In NASCAR you don't need millions from the car makers, so you would think the motorcycle OEM's would be thinking "heck yea, let's just hand over some bitchin factory bikes and support, an let someone else pay the bills." The other side of that is they loose some control, and the little banana republic becomes a scary democracy with even richer families in the mix.
Maybe the factories will need to learn how to go to the outside for big team money, or the Boost Mobile, Coke, Visa and Nike competitors will come looking for their own riders and teams, no one really knows.
What happens to suppliers:
Right now, suppliers have to put a lot of money into racing to get their product on the track or on the rider's body. The non-factory teams rely on getting cash from each supplier to cover the operating budget-so much from the gear people, the boot people, the bar people, etc. A team funded by a mega-deal could just use what they want and not have to charge the suppliers to use the gadget or wear something.
What happens to the AMA (AMA Pro):
AMA race sanctioning would remain important, but AMA Pro may not be able to use the OEMs as their trump card if another fuss like the failed Jam Sports deal comes up. CCE is the dominant promoter and when AMA Pro wanted to fire them, the battle came down to CCE owning "events." and AMA Pro owning the "series." AMA Pro contracts the series back to CCE and charges a "rights fee" for each event. AMA Pro counted on having the OEMs support when things got rough because they invest their racing money to get AMA #1 plates. The OEMs really held the cards, so they pulled AMA Pro's strings. If teams were mega-funded like this Boost Mobile, Coke, Visa and Nike thing, why do they care what AMA Pro's agenda is besides keeping score? They could buy AMA Pro with their lunch money.
Will the sport be better off?
Absolutely. You won't find too many people who say this is a bad thing. The more Bubba is worth, the more everyone benefits. The OEMs may not have the same lock on everything as they do now, but at the same time they may see some relief from the huge salaries and bidding wars they get into if more mega-deals pop up.
Bottom line: Where is Bubba racing in 2004?
Who knows? It looks like this is not going to be a contest over who can dig the deepest into their own pocket. It's all sports marketing after this (someone else's pocket). Kawasaki and Yamaha have a head start, but anything can happen. The deadline is in mid December for the long-awaited deal that may start to change everything.
