Toyota ends title sponsorship with Grand Prix of Long Beach
Alexander Rossi takes the green flag to start the 44th annual Toyota Grand Prix of Long Beach in Long Beach, Calif. Sunday April 15, 2018. (Photo by, Will Lester- Inland Valley Daily Bulletin/SCNG)
Toyota has ended its 44-year partnership with the Grand Prix of Long Beach, officials announced Thursday, Aug. 16.
Toyota Motor North America, which had been part of the races since it began in 1975, told organizers it would not renew its latest three-year contract shortly after this year’s event ended in April, said Jim Michaelian, the president and CEO of the Grand Prix Association of Long Beach.
The association must now find a new title sponsor – and automotive sponsor, which Toyota has also dropped – which helps cover some of the expenses of the three-day Grand Prix.
“This is the longest entitlement package, not just in racing, but in sports,” Michaelian said Thursday morning. “They were a substantial partner all these years, not just financially. They were true partners.”
The Japanese automaker’s North American division began its relationship with the Grand Prix during the event’s inaugural year, 1975, when it began providing a pace car. The next year, Toyota created a charity match race and, in 1980, became the title sponsor. Since then, the race has been known as the Toyota Grand Prix of Long Beach.
But no more.
“It was a very difficult decision,” said Laura Pierce, the general manager of motorsports for Toyota. “It’s been a partnership. We’re very sad and sorry to see it end.”
But for some, including Mayor Robert Garcia, Toyota’s departure wasn’t much of a shock.
“Once they made the decision to move most of their operations out of Southern California and over to Texas, I think a lot of us wondered if that relationship would continue,” Garcia said. “So it’s unfortunate, but we’re very grateful to them. They were here for a very long time, and I’m confident the Grand Prix will find another great sponsor.”
Pierce denied that moving the headquarters from Torrance to El Paso played a role in the company ending the partnership, noting that it still sponsors a NASCAR race in Sonoma County, the Toyota/SaveMart 350.
“While Toyota did move its North American headquarters, it didn’t impact this decision,” Pierce said. “California and Southern California continue to be a major market for us.”
Garcia said he did not expect the news to hurt next year’s race, and he declined to speculate who that “great sponsor” might be.
“We haven’t done this in 39 years,” Michaelian added, regarding trying to find a new title sponsor. “We’re looking at the marketplace and moving rapidly.”
Michaelian said the association has had meetings with some potential sponsors, both vehicle manufacturers and non-automakers, but would not disclose the names of those companies.
Michaelian and Pierce declined to say how much Toyota paid for its sponsorship.
The man who founded the Grand Prix, Chris Pook, said in a Thursday interview that he agreed with Garcia’s assessment that Toyota’s relocation probably played a role. But he also said things like TV ratings and “general media coverage” were likely considered as well.
Pook, who waged an unsuccessful campaign last year to return the Grand Prix to its Formula One roots, said the event’s IndyCar format “has slipped to a point where it’s not relevant anymore.”
Pook declined to speculate on whether Toyota would have pulled out if the Grand Prix had switched over, but he said Formula One “has grown to be by far the most powerful racing motor series in the world today. It would have been a good match for the city to continue to have that level of international promotion, but it is what it is.”
Still, the event seems to be successful, at least as described by Michaelian: In 2018, for example, the Grand Prix brought in $33 million to Long Beach and $63 million to the region. It drew a record 185,000 people.
“They were aware of the success of the event,” Michaelian said of Toyota. “They were a part of it. Coming out of the recession, we’ve had five good years.”
Toyota Grand Prix of Long Beach fans gather on balconies of a downtown Long Beach high-rise overlooking the race circuit. Photo: Scott Varley
But the Grand Prix also costs a lot to put on. Long Beach charges the Grand Prix association a $91,757 permit fee and a $47,524 reimbursement fee for administrative costs, according to a staff report from December, when the City Council approved a new agreement with the association, which runs through 2023. The association must also reimburse the city for police, fire, refuse, traffic, sweeping, sewer, inspections and other services. It was not immediately know how much the association paid to Long Beach for the 2018 race.
Pierce said the decision to break away from the Grand Prix was made before the success of the 2018 event was known, but that it didn’t cause Toyota to waiver.
“This wasn’t solely a financial decision,” she said. “we are always evaluating what sponsorships are next.”
Pierce said that a lot of Toyota’s news sponsorships are based on its new mobility campaign; the company now sponsors the Olympics and the Paralympics.
She also added that the company has not evaluated whether to eventually provide a smaller scale sponsorship to the Grand Prix in the future, and she said she did not know of any other grand prix races Toyota sponsors in the United States.
As for the decision to announce the partnership’s end now, Michaelian said the association is about to send out ticket renewal notices to customers and didn’t want them surprised by the race having a new title sponsor.
“The sooner we get this done, the better for everyone, Michaelian said. “But the event in and of itself is three days of entertainment that people have come to for years. That won’t change.”
The 2019 Grand Prix is set for April 12-14.