Race On rescued the second Grand Prix of Baltimore because it hired Andretti Sports Marketing, a world-class firm carrying a legendary name that specializes in race operations.
Andretti brought instant credibility and organization to the event, but it did little to resuscitate ties with a local business community left skeptical by all the problems in the first year.
Next year, the firm will take a lesser role in the Labor Day weekend event, focusing mostly on race-day operations.
A deal signed Tuesday between the companies puts the onus on Race On to rebuild relationships and generate much-needed revenue from local sponsors and advertisers. Financial terms were not disclosed.
"For the last race, we really were the facilitators," said J.P. Grant of Race On. "This time, we're taking more active roles and making sure that local companies are getting the benefit."
The second Grand Prix of Baltimore drew about 30,000 fewer spectators than the first and brought in one-third the sponorship revenue — about $800,000 — according to an economic impact study released last month. But racegoers praised the event, and no vendors have complained about unpaid bills this time around.
Andretti Sports Marketing essentially ran the entire operation after Race On hired the company three months before the race. The company, owned by former driver Michael Andretti, will once again handle national sponsorship and advertising and also employ race general manager Tim Mayer. It will focus on race-day operations but serve in an advisory role on other issues.
Race On will handle ticket sales, local ad sales, marketing and public relations.
Grant said Race On is looking for a permanent downtown office and could make its first hire this week. It already has negotiated deals with CBS Baltimore to sell local sponsorships and Sandy Hillman Communications to handle public relations. Both did work on the race last year but will have expanded responsibilities. Another local company, MissionTix, will handle ticket sales. Race On is planning to hire Tim Conder to construct the course.
"The goal is to have local people doing local things," Grant said.
It is not unusual for Andretti to begin working on an auto racing event and end up forming a long-term relationship with the host city.
"We've had plenty of people end up staying in the market where they worked, and we've become a part of the community there, the fabric of the event, and we handle a lot of facets," said John Lopes, president of Andretti. "With Baltimore, we all sort of figured out that it was going to have to be different."
Lopes and Race On founders Grant and Greg O'Neill decided after this year's race that wooing reticent local businesses would best be accomplished by hiring local companies to handle much of the work.
Lopes said negative feelings toward the first Grand Prix of Baltimore lingered even after Grant and Andretti, respected names in the business community, took over.
"We'd walk out of meetings and think that everything went well and that a relationship had formed, only to have nothing happen," Lopes said. "There was deep skepticism after hearing so much negative feedback about the first race. People were nervous to affiliate. That surprised us."
The first Grand Prix was a success — until organizers failed to pay millions in bills, taxes and loans on time. Then a new company failed to make progress and lost its contract with the city, leaving Grant to step in about 100 days before the Labor Day event.
Donald C. Fry, president of the Greater Baltimore Committee, said local business owners would be pleased with the new arrangement.
"Andretti brought a lot of credibility, and it's important that they're still around," he said. "But any time you can turn over some of the business to locals and create opportunity, we've got to embrace that."
Grant has begun approaching companies about sponsorship and advertising deals, and has found a more receptive audience, Fry said.
"I think there's more trust there," he said. "But these relationships can take a long time to build. I think J.P. was smart to not push last year, and now there's more time to get deals in place."
The areas now under Race On's purview will be critical to the race's long-term success, Lopes said. If the fledgling company can put the infrastructure in place to generate money from the local market, the "cement will dry and the race could find a home," he said.
"The areas of local marketing, public relations, advertising and tickets sales, that's really the revenue generation side of it," Lopes said. "That's going to determine the future of the race."
Lopes had previously told The Sun the company would prefer to have a more narrowly defined role in 2013. The company expended an unusual amount of energy and resources to help stabilize the race in 2012, believing it is vital to the future of IndyCar, he said.
Baltimore Business Journal first reported the finished contract.