Iron Dog snowmachine race loses primary sponsor Tesoro

Tesoro has been the race's title sponsor since 2000, providing cash and fuel to the 2,000-mile race that last year went from Big Lake to Nome to Fairbanks.

"We are disappointed," said Iron Dog executive director Laura Bedard. "We have had a great, long partnership."

Neither race officials nor Tesoro would say exactly how much the company has contributed. But Kip Knutson, external affairs manager at Tesoro Alaska, said the cost of title sponsorship for the upcoming 2010 race was $500,000, which he characterized as "a big increase.

"That's out of our range," Knutson said. "It wasn't much of a discussion once the number was put out there.

"The race has grown beyond our capabilities. Perhaps our title sponsorship was holding them back from gaining more corporate sponsorships. They want to grow."

A significant part of Tesoro's contribution was providing racers with fuel at race checkpoints across Alaska. Tesoro operates 31 company-owned 2Go Tesoro retail stores throughout Alaska and has branding agreements with 60 independently owned Tesoro Alaska stations. The company refines most of the gasoline sold in Southcentral Alaska at its Nikiski plant.

"That's a huge deal, and it's going to put a real bind on the Iron Dog," said five-time race champion Dan Zipay. "They'd buy all the gas and fly it out to the villages. It was awesome; they did a tremendous job.

"It's going to be a big deal."

The link between Tesoro and Iron Dog was longstanding, dating back years before the company became the title sponsor in 2000, changing the name of the race from Iron Dog Gold Rush Classic. On Monday afternoon after a press release on Tesoro's decision was issued, the name Tesoro Iron Dog could still be found on the race Web site.

"Losing your title sponsor four to five months before the race begins means it's going to be difficult to find one for this year," Iron Dog treasurer Jim Wilke said. "But we weren't totally surprised by this."

Bedard said losing Tesoro wouldn't stop this year's Iron Dog, the 27th, from starting Feb. 21. Already, 20 teams of two racers each have signed up and Bedard said the purse had reached $123,000.

Last year, the purse was $135,000, with the winning team of Wasilla racers Todd Minnick and Nick Olstad taking home $25,000.

Bedard said the Iron Dog may now follow the lead of the Iditarod Trail Sled Dog Race, with several principal partners topping a list that also includes "Lead Dog" sponsors, "Team Dog" sponsors and "Wheel Dog" sponsors. No single firm dominates the way Tesoro once did the Iron Dog.

The days of finding one company to write a huge check may be numbered.

"It's a bummer, but they've (Tesoro) been taking a beating here," said 2008 champion Marc McKenna of Anchorage. "I'm in the asphalt business and I know it's tough right now. It's difficult for anybody to throw down $100,000 to $150,000."

Tesoro Corp. reported a second quarter loss of $45 million in late July, with income of $11 million, down $63 million from the previous year. In 2008, earnings were $278 million, down $288 million from the previous year.

"I still sit on the board of the Iron Dog," Knutson said. "It's a great Alaska event. Being associated with it was useful for Tesoro."

McKenna doesn't think racers will shy away from the race despite Tesoro's departure.

"If any of us were racing the Iron Dog for the money," he acknowledges, "it would be tough."

But most racers are prepared to lose money for the chance to compete.

"These guys will race for free," Wilke said. "Entries are based on no guarantees of prize money. Racers, to some extent, really don't care. The sponsorships will come in at a certain level, and the sun will rise tomorrow morning."