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consider whether the amount of Menards’s expenditures was
reasonably related to the amount of the benefit that Menards
derived.
Petitioners contend that the TMI expenses were “in the range
of what a sponsor/independent-third-party would pay to be a
sponsor of successful cars like those owned by TMI in exchange
for the benefits received by Menards.” In support of their
assertion, at trial, petitioners introduced expert testimony
regarding the value of a race car sponsorship. Respondent
offered a sponsorship valuation expert, but the Court did not
recognize him as an expert for purposes of this case.
a. Petitioners’ Experts
Petitioners’ first expert was John P. Caponigro, president
of Sports Management Network, Inc. (SMN).62 SMN represents
champion race car drivers, among other sports and entertainment
industry personalities, and specializes “in the business side” of
motor sports. SMN’s motor sports marketing and consultation
division, called SMN Motorsports, analyzes, structures, and
negotiates sponsorship programs for the IRL. When valuing
sponsorships, Mr. Caponigro considers factors such as the league
schedule, television coverage and ratings, onsite attendance,
62Mr. Caponigro has been the president of SMN since the
company’s inception in 1989.
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