Financing a Race team

[AU N EGL]

From Speed TV

Financial Inequalities

Written by: Robin Miller [B]Indianapolis, Ind. – 2/8/2007
Source: http://www.speedtv.com/commentary/35227/

EDIT: Full article removed.

[old man]

Fascinating stuff AU n EGL, European racing simply does not pay any prize money as a rule, the recent Citation cup is the exception that proves the rule and from Porsche their season measure Posrche Cup for drivers of customer cars pays out about 150,00Euro at the season end. Unless I am mistaken that is it!

[FIRE]

Originally Posted by old man

Fascinating stuff AU n EGL, European racing simply does not pay any prize money as a rule, the recent Citation cup is the exception that proves the rule and from Porsche their season measure Posrche Cup for drivers of customer cars pays out about 150,00Euro at the season end. Unless I am mistaken that is it!

Top 6 privateers in World Touring Car Championship (WTCC) get also money:

The prize money will be awarded to the drivers entered in the Yokohama Independents' Trophy. At each race meeting, a total of 32,000 euro will be awarded to the top six Independent drivers, classified by adding together the points obtained in the two races:
€12,000 to the first driver
€8,000 to the second driver
€5,000 to the third driver
€3,000 to the fourth driver
€2,000 to the fifth driver
€2,000 to the sixth driver
...

Source: http://www.fiawtcc.com/fiawtcc/sport_sto1069611.shtml

[JohnMiller]

Spanish F3 also pays good prize money.

[AU N EGL]

Last year I made $900 in contigancy money, 4 sets of brake pads, and TWO tires. and lots of discounts on things I dont use.

Dont think I will quite my day job.

Rember guys, Most prize money is assigned back to the team. Drivers are under contract and dont always keep prize money, the team does.

Still costs a fortune to run a team or race car.

[dj4monie]

AU N EGL -

Great post and great job by Robin to really make it hit home...

People want to knock Sport Compact Drag racing, but in light of some of the numbers put up by Robin Miller, you might be better served doing that.

http://www.nhrasportcompact.com/2005/info/payout.html

That's just NHRA...

There's also NOPI's NDRA series (for those familar with the NOPI Show on Speed), Battle of the Imports (The orginators) and IDRC (run by a Magazine editor/owner and former editor for Turbo Magazine)

You could build a Chevy Cobalt for around $50,000 turnkey

Specs would look something like this - 1200hp, 0-60 in 3 seconds, 1/4 mile at 7.80@180mph.

More often than not, you don't touch the thing between rounds, you check the plugs, maybe change the oil, put fuel back into it and wait for you to be called to the line again.

Your car would look something like this -

http://www.garygardella.com/cars/racecar

If you dominate like Gary did in '05, then you win everything in site, championships in NHRA and NDRA.

While NDRA doesn't publish payouts all the time, most racers BREAK EVEN, even in the Sportsman ranks, though cost to build really means you don't spend more money than you make per season and that's if you don't wreck it or blow it up too many times.

The average cost of a Sport FWD car is around $15K-30K depending if you started with the same car you got in high school or not.

Anyway, I have said it before, you can start your motor racing empire with drag racing. There's nothing WRONG with that. Nobody said you couldnt run karts or SCCA/NASA sports in between...

I wonder what the stats looked like for the series when it was -

NASCAR (Winston title sponsor)
IMSA (Camel title sponsor and no Grand Am)
CART (PPG and no IRL)

And your middling series were -

SCCA Pro with Trans Am, Club Racing at the Semi-Pro level with Playboy Magazine Showroom Stock series, & Sears Auto Center Truck Racing

IMSA with their own version of Showroom Stock & the Luk Clutch (what was the Champion Spark Plug Challenge) Challenge.

My goodness, you had alot of racing in the 80's and early 90's, what the hell happen???

Cup Happen and everything was left in its wake. I don't know if you can fix it now. Both open wheel are further apart than ever and so is sportscars.

None the less good find...

[AU N EGL]

a freind of mine posted this on another forum I visit:

"What else is new? It is the golden rule, he who has the gold ...

I've known a lot of great drivers who didn't have the gold and never got anywhere as a result. And I've known ones who have had the gold, went a long way, until their inability finally caught up to them.

But they were racing and the poor good drivers weren't.

Dorsey Schroeder is a good example. Good driver, almost quit, because he didn't have the money. By luck, he managed to jump into a spec SCCA series at the right time and was "discovered".

There are many professional instructors who fit this. They were great drivers, but couldn't afford the cost of a championship or continuing. Instead of being the champs and the great drivers, they coach lessor guys who have the money to do it.

Part of this is that there is no ladder of success in road racing in the US. You can't start in like FV and be discovered or gain by being good so as to make a jump to say FF or FA. Instead, you make a jump if you have $50,000 or $100,000 laying around that you dont know what to do with.

Don't ever equate a driver who has the newest car, big rig, and huge team as being the greatest. He is simply the one with the most money."

[class4v]

For the LMS it's simple : zero, zero, zero. It's even difficult to make them (the LMS board) pay for transport to go to Brasil. As TV figures of that series is very poor you'll understand that most teams have to rely on drivers bringing money/sponsors.

[old man]

Originally Posted by class4v

For the LMS it's simple : zero, zero, zero. It's even difficult to make them (the LMS board) pay for transport to go to Brasil. As TV figures of that series is very poor you'll understand that most teams have to rely on drivers bringing money/sponsors.

FIA too, the prospect of a le Mans entry is dangled and the new Citation awards as I said earlier but I am reliably informed that there is not a team in the FIA that has not had to take paying drivers. This and some where the tyre company is paying mean that we may well have some close races but is that what the series that lays claim to World Championship status should be all about?

[AU N EGL]

From the Grand Am Board:

"I think you first need to understand some of the business of this sport before you can write off the "Gentlemen Drivers". Many teams are actually funded by these gentlemen drivers. Without them a lot of teams would not be participating at this level or would struggle more to do so. If those guys spend millions of dollars to race and pay top dollar to have famous names drivers with them in their cars I think they deserve an opportunity to qualify just as everyone else. Now, of course I'm not suggesting that everyone that has enough money to do this should, but if you are a qualified driver and you can run with the best of them then you have every right to be there.
Don't get me wrong, this isn't the case every time, but without many gentlemen drivers many teams would not exist."


and
"7 of the top 10 finishing cars in this year's Rolex 24 would NOT have been on the grid without "Gentleman Drivers". I might add highly competent and qualified "Gentleman Drivers".


Finally,


"Hey guys, let's not be so sexist round here, aren't we forgetiing the "gentlewomen driver" AKA Milka,"


Funded Drivers allow teams to succeed. Without Funded drivers there many not be sports car racing to the degre we do have it now.

[AU N EGL]

" If you think you can survive on prize money , you are crazy. Here is a nice example:
The company I work for has some minor sponsorship in the Toyota F1 car, like $2.5 million. The Toyota budget is $546 million per year to manufacture and run the two cars. F1 prize money is about $1 million per race plus TV money based upon points scored for the season. So maybe Toyota collects $100 million per year from F1 and some amount from the other sponsors on the car, but they are spending at least $350 million per year of their own money."

From an other forum.

[class4v]

So you understand why the big teams are also fighting each other for the big sponsors in F1 ( McLaren vs Ferrari, Renault vs Honda,...). For F1 sponsoring is huge as is in Nascar (although e.i. Procter & Gamble in nascar is not paying what vodafone is paying in F1) but this is thanks the very good TV rating and the crowds + press attention between events. Most of the other series have a long way to go (mission impossible) before getting these kinds of figures

[TWK]

Scraps
Taking some information from a fine column by Robin Miller at speedtv.com Murphy discussed the topic of money in motorsports in his Paddock Poop today, with the following as one observation among several.

"Let’s put that another way. The real difference between racing markets in North America and racing markets in Europe might be NASCAR."

http://murphythebear.com/blog/

[dj4monie]

Well in reality NASCAR is just reaping the misguided attitudes of the "rich men" in Sportscars and Open Wheel.

It was divide and conqure and the powers that were at CART/IRL and IMSA/USRRC made it that much EASIER for a southern based sport to get a foothold in areas unknown before to them.

With the super-stupid money that NBC and Fox paid them to show the races, put it on normal TV when everybody was used to tuning in on ESPN to watch the races. That new access to the media at large gave NASCAR the boost it needed to become a mainstream playa in American Sports.

Scraps? What scraps? More like food-stamps...

I hope this was the writing on the wall for everybody else in motorsport to pull their resources together if they want to share in the pie. You just cannot have divisions in Sportscar and Open Wheel if they want to thrive its that simple. We lost Open Wheel's next big star to NASCAR, who's next? Nobody that talented is running ALMS or Grand Am IMHO as they would have been invited to at least TRY a Busch series car.

Stéphane Ratel has been bold and made it work. He's worked with OEM's when needed (read: Saleen and Maserati) and been FIRM when the series need it the most. While Ferrari's and later MC12's have won the championship, it has been none the less very competitive with 4 different makes getting to victory lane last 2 seasons.

I know all you Prototype lovers will moan, but LMP's are a playgound for the OEM's and you know it. Unless companies like Lola have a "Technical" partner on the level of an Ford, GM or whatever, they are hopeless to compete.

On the other hand, OEM's can build cars for everybody else ala Porsche, Ferrari, Aston Martin, Maserati, Saleen and Panoz currently.

Just right there, you have 3 GT1 cars and 3 GT2 cars available to anybody with half a million or more burning a hole in their pocket.

I say build a series around these cars and forget Prototypes. It was fun while it lasted, but all it causes now is performance gaps too large for non-factory supported teams to overcome on a regular basis.

Take away the R10, Audi runs the R8r Street Car, Intersports buys a Ferrari, Autocon buys a Panoz, Penske runs Aston Martin factory blessed team, Acura runs GT2 with a modified TL, Mazda a RX8 and you have a complete series...

I doubt you would miss the prototypes much at all...

The series as a whole would be stronger, much stronger than it is now with only 2 classes to support. If LMS did the same thing, then prototypes would simply disapear...

Something has to be done, maybe not this season, maybe not next season, but within the next 3 years for sure.

[davyboy]

Originally Posted by dj4monie

Well in reality NASCAR is just reaping the misguided attitudes of the "rich men" in Sportscars and Open Wheel.

It was divide and conqure and the powers that were at CART/IRL and IMSA/USRRC made it that much EASIER for a southern based sport to get a foothold in areas unknown before to them.

That's precisely what happened. While I found the original SpeedTV article interesting, nothing in it surprised me at all and why should it. In the US NASCAR has relentlessly pursued its target audience, expanding beyond the specialist interest of motorsport and into mainstream life. Instead of complaining about them, their counterparts in every other racing series worldwide should sit down and analyze NASCAR as a case study on how it should be done. Nobody but NASCAR created the platform on which to make such huge payouts... and do you know what, nobody outside NASCAR had any barrier to doing the same with their series... other than themselves.

[cptkablamo]

Yes financing a race team is hugely expensive and no the financial rewards are not particularly great.

But sportscars can work where other series seem to fail. Most of the entrants in LMS/ALMS/Grand Am are enthusiasts. Rich ones at that. A lot of the people who own and race teams in this series are not in it for the money. They are in it for the love of competition and motorsport. And they have the money and networks to indulge that love. That is one of the reasons why Le Mans is so successful - while it has always had manufacturer support, it has never relied on it and it has a large part of the spirit of competition and racing.

And this also makes sense to keep prototypes in competition. A purely manufacture based series would leave it open to huge risks of going out of business when the car companies lost interest. But to have the backup or in the case of the Le Mans Series, a the main show, to be private entries and those not connected by to a manufacturer, is a wise way to keep this market stable.

The rule makers always will have to ensure that these cars stay competitive and affordable to those rich enough to even think about going racing.
In Australia the GT series is not trying to be a world beater with all the greatest drivers and greatest teams. They know what is achieveable at this point in time. And I suspect the same is true of the Le Mans Series.
ALMS and Grand Am have inherited the stigma of the open wheel split and the TV that NASCAR takes up. Yes it is expensive to compete and yes you need gentlemen drivers (which I also think is vital to the competitive success of the series, if it were all professional drivers, would the racing lack a certain something?) and yes, more prize money would be nice, but it is also stupid to think that sportscar owners got into the series for the money...cause there never was any to begin with (and they knew that)

[old man]

In the FIA and possibly other series we are seeing a heavy involvement of Pirelli in financing teams this year, Jamie Davies acknowledges their support in placing him with BMS and the Porsche from the same team is also running Pirelli, I suspect against Mr Collard's wishes given his experience last year with Ebimotors. Now we have Scuderia Ecoss switching from Michelin to Pirelli and getting some star drivers for their trouble with cash back as well according to comments on another thread here. Is this level of financial inducement from tyre companies growing at the moment or was it always there? I recall the Yokohama deal with a Porsche driven by Mike Rockenfeller two (three?) years ago in ALMS that I always thought was financed by them.

What are we seeing here? Nothing new really but it seems more obvious this year. Tyre companies have always followed top drivers but now they seem to be leading them

[AU N EGL]

Originally Posted by old man

I Is this level of financial inducement from tyre companies growing at the moment or was it always there? I recall the Yokohama deal with a Porsche driven by Mike Rockenfeller two (three?) years ago in ALMS that I always thought was financed by them.

What are we seeing here? Nothing new really but it seems more obvious this year. Tyre companies have always followed top drivers but now they seem to be leading them

This is new. Mich clad teams had to pay Mich for the use of their tires. Goodyear, sold tires to teams. Even in NASCAR, teams had to purchase tires. Now in 2007 NASACR Teams lease tires from Goodyear, but it is still $400 a tire from Goodyear.

Now with Pirelli paying teams to use their tires, and the Pirelli tire quality has gone up significalty teams what these tires.

Pirelli will be the offical tire of Grand AM in 2008.