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How complex is the search for sponsors and what percentage of a manager's time is devoted to this activity (both during the season and in the off-season)?The search for sponsors is fundamental, very important: to give you the revenues of a stable basically are divided IN 3 big items: television rights/race premiums, sponsorship and licensing (the exploitation of the brand). Actually we are not a soccer team where licensing and merchandising alone make millions of euros in revenue so this item for us is really insignificant. The 2 main sources remain precisely television rights (and race prizes) and sponsorships: the former are provided through IRTA (International Road Racing Teams Association) and IRTA takes the funds directly from DORNA (Dorna Sports S.L.). Sponsorships constitute, as far as we are concerned, between 2/3 and 70% of the budget: consequently they are extremely important. The time I spend managing sponsors and taking care of the business side-and when I say taking care of the business side I mean both the search for sponsors but especially the maintenance of relations with current sponsors-occupies probably a good 80% of my time off the circuit, because for the other 20% I take care of the legal and administrative side. I tend to be more - or almost solely - concerned with maintaining relationships with our customers while for the search for sponsors I must say that, with success, we rely on external agencies in addition to an internal sales team of 3 people who work almost on a time basis on this activity. When I'm on the circuit, I'm only concerned with following the drivers and, let's say, trying to stay updated on what's going on inside the pit.
- Okay. Which is a nice part for you.The most beautiful and most enjoyable part. For those who have the passion like us, it is the most beautiful part.
- Right. But come on there's also customer contact, having that contact is also very important professionally, I think it's fun.Absolutely, absolutely. I always say one thing: we have-and I have-a great fortune, which is that for almost 3 decades almost daily I have been interacting (interacting) with entrepreneurs, executives, directors, and so we have the opportunity to enrich ourselves professionally and culturally by dealing with really good people every day.
Right, good. Here's one thing: In a period marked by the major obstacles represented by the Covid19 pandemic, how difficult is it to maintain existing business relationships and find new entities willing to support involvement in motorsports at the highest level?Um, in general it's becoming more and more difficult, that's the reality. We shouldn't hide the fact that we had some golden years-I don't know if you remember the 1980s and the 1990s when there was basically booming industrial activity, steadily growing GDP in all the countries of Europe, the "boom" in Spain (let's remember that when you went to Spain in the 1980s many highways didn't exist, to go to Jerez you did the last 1000 kilometers on normal roads and now you arrive with 4-lane highways...so let's say that motorcycling as well as the world of sports in general has experienced much rosier years. Things have been complicated in our environment, as far as my experience goes, in 3 blows and setbacks that we have suffered: the first one was the exclusion of tobacconists from the world of motorcycling sponsorship. And there we lost something like -- I say -- 80,90..100 million euros that came out between what they were spending in the MotoGP teams (of the 500), what they were spending with the organizers and what they were spending with the agencies to do the activations. The average contracts of each team were around 10 million euros a year, so... I remember that Camel, with whom I had contact in late 2005 for 2006 had told me to prepare an offer of $9 million for 2 pilots. It was Carmelo Ezpeleta who told me that Camel was going to break off relations with Sito Pons and was looking for a replacement. Parallel to my offer came Yamaha's offer, which eventually turned out to be the winning one. The second blow was the crisis of 2009 with the collapse of Lehman Brothers, which dragged the financial world into collapse and clearly created quite a few problems for industries, the economy and consequently also the sponsorships that were all revised downward. The third big blow now we have taken with Covid, which we are unfortunately not out of yet...and now it is difficult. Companies obviously can't get a clear perspective on when the economy is going to recover and so the executives of the various companies, of the various companies are all a little bit more reluctant to spend money on communication, on sponsorship...because you see sponsorship is a phenomenon that is within communication but whose commercial return is only abstractly conceivable and is mainly linked to the sports result. Let me explain: I invest in advertising, I buy this newspaper page, I buy an advertising space, I know that newspaper is sold in tot copies, I know that good or bad I have tot contacts and therefore I manage to have a clear cost per contact. And I can justify my investment because I say, "I spent x but I got a chance to be seen by y people." The return of investment. In sponsorship there is also clearly an additional effect: because it is true that we have an audience of viewers, it is true that we have an audience of followers but the visibility that we can offer the sponsor is also linked to the sporting result that we can guarantee because if you fight in the top 5 of MotoGP you are always filmed on television-and therefore you have a very high ROI-if you are instead among the last places in MotoGP you are rarely filmed and you have a much lower ROI. Although I understand that DORNA does a lot to help you and help the teams get a little bit more visibility even for those who are not really in the top positions..with some more framing than in years past, with more cameras placed on the bike. DORNA realized over the years that clearly TV production that was too vertical, so too much aimed at the top, the big guys, was creating a problem for everyone else. And they are able to create the show in the moment when everyone else is there. Yes yes. One thing Lucio, but about what you're saying about the difficulties in these pandemic moments, did you have to modify the offer and the type of activities to ensure the return of image? That is, did you have to modify from before by intervening with more social, more communication activities...we know that the whole part of hospitality, paddock entrances...how did you make up for that? Look I have to say that we have had a different reaction from different categories of sponsors. Let me explain: we have clients, such as Castrol or Givi, who need and have an interest in getting to promote their brand to spectators, people who are in front of the television and those who are in front of the stands. In this case, corporate hospitality activity is important but not essential. There are companies, on the other hand, that do not have a product that is aimed at motorcyclists but have a more b2b product to be clear, a more industrial product. I'll give you an example: one of our sponsors is a company called Viar Meccanica that produces parts for oil rigs; their customers are: the Repsol, BP, Total, Agip..so they sponsor LCR because in the paddock they know that there are regular guests from all these oil companies and consequently they organize the paddock to do relationship marketing.
- They create that network where they can start some business and not so much for advertising and communication to the consumer-having no product going to retail.Exactly. So to answer your question about how the sponsors reacted: thank goodness most of our sponsors are companies in the motoaccessory-motorcycle industry so Givi, Castrol, Arrow, Carpi Moto, Frentubo, PBR, Rizoma...all companies in the industry. These reacted by revising the contract, reproportioning it according to the smaller number of races (14 instead of 20). With other companies that don't have a product that goes to retail but is more of a b2b product..there then we suffered a bit more. We have had companies that have cut their investment by 50% by not being able to have hospitality. Passes-that is, unused benefits-were deferred to the following year, and then we tried to do social media activities. But you have to be careful because when you do social media activity dedicated to promoting a product you are penalized by social. When you do social media activity dedicated in general to doing something nice then social media promotes you. However, it's clear that I can't just do the tip with a can of Castrol oil in my hand and say "look this here is Castrol oil..." and then put it on social understand? I have to do an activity where I say "today I'm going to teach you how to change the oil on your scooter!"
- That is, it must be done intelligently.Product placement a bit "branding" however clearly that it is not too obvious that it is advertising because then Instagram or Facebook or even your own fans will "dick" you!
- Listen, how complex and tiring was it to get to the world championship with only 2 staff and having to take care of all the steps instead of "simply" thinking about driving?So my story I always say it is different than many others....I started late, my parents didn't agree, I really had to sweat but like you did so many, like we did so many of our era...Let's just say that I've done the hard work! I started with a 238 CNG van I bought from the wrecker and there it was the beginning of an adventure. You think that when I won the European Championship in 1995 that I was 25 years old - I was going for 26 - and decided to go back to the world championship - I had already done it 2 years before with Gazzaniga and then with Cecchini and Bronciani with a private Hondina - I was hoping to be able to go to a new team. Not being able to find a good placement that would let me race then I said, "well I'll make my own team." The problem is that without money and it was not easy: I had some money from some sponsors but..One of the first sponsors was Renato Dalla Grana, poor Renato Dalla Grana from Spidi. And it was a beautiful story with him because he really helped me a lot and I have to say that at the beginning it was hard and even my mechanic, Paolo Cordioli, lent me some money.
- Go figure. Great technician, remember he also followed you throughout your career in 125 but also with your team. Listen but how different is the relationship between rider and sponsor and between team manager and sponsor? Speaking of just that.Look: the pilot needs to establish a very intimate relationship with the sponsor because if he wants to renew he needs to really get into the heart of the customer. But at the end of the day, this kind of attitude we have also carried on over the years because all the sponsors we have are companies with whom we have established wonderful relationships and with whom it is very difficult to imagine breaking off collaboration. Things clearly change because the sponsor in relation to the rider wants the result while in relation to the team instead wants visibility (which is brought by the result).
- But in your opinion would Lucio still be sustainable in the current logics for a young driver to lead a world championship campaign by having to divide between his role on the track and as manager of his team?It took a lot of energy out of me but I'll tell you more Fabio: I was probably the last one from an era where the rider could still afford to be his own manager, to be manager and team owner. I was inspired by Dirk Raudies, Aspar Martinez, Sito Pons, Juan Garriga..I mean these people had their own sponsors (they were the HB, the Cepsa, the Ducados)
- Cardús also if I remember correctlyCarlos Cardús! Bravo I couldn't think of the name. Here these had their own team. And I was inspired by them. Clearly, however, I realized that the world of motorcycling was already undergoing a change because riders were becoming more and more professional and athletic training was more and more necessary-let's not forget that the riders of the 1980s (70s-80s) went to the starting line with a cigarette and didn't even know what it was to go racing on foot or go to the gym to train.
- And having had little sleep at night -.Whereas the era in which I took over was already an era where you had to be physically already much more performing almost like an athlete doing the Olympics. So I found myself having to spend a lot of time at the commercial/sponsor level which took away my psychophysical energy but also my concentration in being a pilot. It's a different story mine, it's a different story but it still gave me a great opportunity: maybe I didn't achieve at the sporting level what I wanted to achieve, that's for sure, but on the other hand I achieved at the managerial level some things that...
- It certainly gave you a lot..on a personal level. Well, listen the choice to focus only on the top category and MotoE (we talked about this at times, I remember I also made you a proposal of a 250 or a CRT, once you had one bike even in MotoGp) is the result of a very specific choice? Do other private teams maintain a presence in the propaedeutic classes in order to diversify investments and grow young riders but that would make the structure too big and expensive for LCR? Too challenging? What was your decision and choice to be only in MotoGp?An absolutely strategic choice because of an economic theme: if we want to also operationally I realized that if you want to be strong, competitive in MotoGP you have to dedicate yourself 100%. You can't afford to follow (at least I don't have the time) other categories because from morning to night on MotoGP I'm always there inside the box with the riders, with the managers, with the teams, with the tecnical managers, with the engineers...and to imagine having to race in other categories -- I did it because I did 250 and MotoGP in 2007 with Eugene Laverty and with Carlos Checa -- and I tell you it was very stressful.
- Yes there is an expenditure of forces, physical forces, economic forces..there is a big investment, better to concentrate and do things right also because a team in MotoGP I think is much more demanding than a team in Moto2.Yes yes, then you can also succeed however you have to have maybe very important economic resources and then you have to hire more staff and then let's say that we already with MotoGP and MotoE are already quite busy.
- Sorry for the many questions but you are a really interesting character who has also done some new, often let's say revolutionary things in this environment so if you have a few more minutes it deserves especially this question I want to ask you because it is a bit of a peculiarity of yours: the fact that your team has often distinguished itself by the characteristic of sporting different specific liveries for certain periods or races in different geographical areas during the same year. This strategy has been customary for a long time in the U.S. championships but it represents a peculiarity of yours in MotoGP. What advantages does it bring and what features at the management level? Issues included.Look, we ended up getting into MotoGP with Casey Stoner and it was a difficult time because the increase in the budget of participation in the category from 250 to MotoGP was really very important and it coincided with the decrease in the commitment with us from Safilo Group with the Carrera sponsorship. This was because Safilo Group was making a change of ownership, it was in a very particular phase so they, despite ourselves, decided to decrease the economic commitment. We found ourselves in a situation where we didn't have a title sponsor to go to MotoGP : several opportunities to have one came up but without being able to materialize them. We said "okay, we can't find a 3 million sponsor-because that was more or less the money it took to be a title sponsor at that time on a motorcycle-well then however we can find a lot of 150 thousand sponsors" because it's easier to find a 150 thousand sponsor than a 3 million sponsor. So we went into the market and tried to set up a format of sponsorship on a race-by-race, event-by-event basis.
- So is this kind of activity difficult, is it complicated? Because almost no one does it.It's complicated because you clearly have to redesign the graphics, the image of the pit, the trucks, the hospitality, the riders' suits...we set up a working format where the graphics changed only in certain parts - the side ones of the fairing - and then we would work with adhesive applications in other areas..we didn't completely paint the whole bike. So we worked, we set up a system to be flexible enough to give a strong image in selected markets for the companies we wanted to sponsor with relatively low investments. Eventually we were able in 2006 to start this kind of title sponsor-to-race activity that allowed us then afterwards to activate this sales format for all the following years that I must say helped us a lot. Now next year we will start with a new format for which in almost every race we will have the same image and the bike will be divided into 3 big bands.
- A scoop this one!Yes, a scoop!
- Well well, for us at Fastback and OnSports you have given us this news in preview. Good! So you're going to start this new one with 3 bands so it's going to be 3 title sponsors that you're going to wear all season long.Yes, 3 primary sponsors
- Well well but LCR is one of the few teams to bring to the track 2 bikes distinguished by completely different liveries so this is also a peculiarity.But I think I was the only team in history to work with 2 different oil companies
- Eh exactly, how did you do that!It is like for a man to have two women and make them both happy!
- Good example!!!It was fun...
- But does it complicate the logistical management, the overall image perception of the team? or does it represent an advantage in being able to "sew" the best solution for each investor?Then the advantage Fabio sincerely is that the more business relationships you have, the more you reduce your business risk.
- Of course, so if one goes away, the main one-.Right. And so having one lubricant sponsor or having 2..it's better to have 2 than 1. But on the other hand it's clear that in terms of image it means 2 websites, 2 boxes with 2 different graphics, clothing..2 different clothing lines, 2 differently decorated trucks, different promotion activities...
- Hospitality? One?The 'hospitality remains one however divided into upstairs - downstairs for guests of one sponsor and guests of another...it definitely complicates the management however I always say "problems must be solved" and therefore one must always invent the solution and it can be said that - if I may say so - we Italians are brilliant at always finding solutions "in the corner".
- Of course! So the Japanese in Honda will be amazed, they who are very schematic, very planned 1 year or 2 years in advance in planning things...they see that you do all these things in a short time so.it's a nice combination let's say and that's important. One more thing and then I'll leave you: do you take inspiration from what you see in other leagues or other sports/commercial experiences in defining your business plans?Um..we do benchmarking activities: think that especially in the winter period we get together with my sales people and we sit in the office, often with a big screen, and we do d activities to check what Red Bull Formula 1 does rather than what Mercedes does or we analyze the way other MotoGP teams communicate and we always try to gather ideas, to brainstorm. Ideas always come up within the team to improve our work: then the ideas are not always implementable because many times ideas mean budgets and budgets unfortunately in this period are to be kept well calculated and centered for the primary activities that are clearly participation in racing.
- Sure, especially if you go fishing on Formula 1 where they have these kinds of programs. Well, Lucio you were really accurate, as always, on time, you answered all the questions..we wish you the best of luck for 2021Thank you and see you next time!
- And see you next time for sure. Thank you and see you soon. Best of luckSame to you!