Death of the wildcard?

[GTRMagic]

Interesting to read mr Fogarty's article in AA this week regarding TEGA's intention to apparently buy back 2 L2 franchise licence slots.

The article discusses how the #7 Rod Nash Racing (RNR) franchise licence slot is apparently agreed to be purchased by Paul Cruickshank Racing (PCR) to run Mr Sci Fleet in the ex-888 BA.

Note that the article quotes Mr O'Reilly stating that TEGA wants to buy back 2 L2 franchise licence slots if they come onto the open market.

Imagine for a minute a theory.... where Mr Nash wants to buy a L1 franchise licence slot from somewhere, and needs to flog off his L2 franchise licence slot to do it.

Why upgrade to an L1? Well the income generation potential from the Team's Agreement suggests an L1 provides the teams with probably two and a bit times more income than an L2.. and a seat on the board if you can garner enough votes.. and indeed more votes in TEGA licence holder decisions.

So Mr Nash has discussions with an L1 franchise owner... and agrees to buy an L1 franchise licence slot for the well-known going rate of $1.5m per slot.

Mr Nash has to sell off his L2 franchise to fund the L1 franchise purchase. So he agrees to terms with PCR to do just that, for the alleged going rate of $900k per slot.

Uncle Kelvin gets into the mix... and with the power vested in him by the state of TEGA-dom, makes notice of TEGA's intention of reclaiming this particular RNR L2 franchise licence slot.... for the $900k mentioned.

Under the rules of the Supercar game, TEGA can reclaim licences if it sees fit... quite how it would stand up in the courts of the land I am not so sure.

So PCR has been gazumped out of a licence. They have a sponsor, a car, and a team... and want to go racing.....

There is another option.... Mr Tratt has announced to the world that his Toll backing is off to HSVDT, and that his L2 Paul Little Racing-owned (PLR) franchise licence slot is for sale... reportedly (in AA ) wanting $900k for the thing.

PCR wanders up to Mr Tratt, and agrees to terms to buy the PLR franchise licence slot from Mr Tratt.... for the $900k, same as on offer to Mr Nash. It costs no more, is arguably as good a franchise (albeit at the Winton end of pitlane)

Uncle Kelvin gets into the mix again... continuing the use of the power vested in him by the state of TEGA-dom, makes notice of TEGA's intention of reclaiming this particular PLR L2 franchise licence slot.... for the $900k mentioned.

So PCR has been gazumped out of a licence. Again! They have a sponsor, a car, and a team... and want to go racing..... but cannot do so. A lesser team may figure that TEGA is out to get them....

There is funding in the budget for a $900k buy of an L2 franchise licence slot, but it is a big jump up the road to $1.5m to buy the other L1 franchise licence slot still around.

So what do they do... find someone to stump up the extra $600k... take TEGA to court for the double gazumping... or indeed end up back where the rumour started many months ago, with a Dynamik franchise being used to operate the PCR car next season...

The AA article suffers a critical failure in understanding what franchise values are likely to do.... Imagine if the 2 lazy L2s on the market are taken out by TEGA.... that leaves only the single aforementioned L1 around available to buy. Mr Fogarty thinks this L1 franchise licence slot will be worth less because it is unable to participate at the grid restricted rounds....

.... except... the TEGA manoeuvres of taking out the RNR & PLR franchise licence slots from the market have meant that every other franchise holder has a place on the grid at every round in season 2006!

Lets say that again... every other franchise holder has a place on the grid at every round in season 2006!

This means Britek will be able to field 2 cars at every event (and may give Mr Seton another shot at the title....) and Dynamik may be able to continue at every round as well.....

Quite what this does to the 6 remaining L2 franchise licence slot holders is a little scary. PMM, TKR, Britek (2), Romano & Perkins Engineering own the 6 L2 franchise licence slots left after the repurchase.

What will TEGA do?
- Take into account the considered arguments into mediation PMM have had thus far regarding the complimentary upgrade to L1 status?
- Hold the gap in the franchise income between an L2 and an L1 as a payment towards an upgrade of a licence of ~$600k over 3 years
- Automatically convert the L2s to L1 status because TEGA doesnt need the surpluses of the last 2 seasons to buy out any more franchises?
- Sit on its hands and retaun the '2-class' franchise arrangement
- Keep buying L2s till there are no more left

Decisions, Decisions, Decisions.... all convoluted, and all arguably unenforceable at common law.....

Presuming any of this actually happened of course

[Just Do It!]

A very, very well-rounded and well-written piece there, GTRMagic.

There is one fundamental issue with the L2 to L1 franchise upgrade. To make this process happen requires a majority voting decision.

Now assuming the field was cut to 32 cars, then there would be 26 L1 licences with 104 votes voting largely against 6 L2 licences holding only 6 votes. Based on this, it would be hard to see it happen.

Currently, what does an L2 earn and what does an L1 earn? What will 2 L2 incomes divided up amongst 32 cars do to each L1 and L2 income?

[Onlooker]

We seem to be living in a bit of a fantasy world , in that the championship is made up of the fastest and most professional teams, cars and drivers in the country. Sorry to burst your bubble folks, but the landscape has changed somewhat.
Back in the days when you could turn up and qualify for the race ( children may have to consult there parents to verify this) you had the chance to compete if you were worthy, however those that were too slow did not like this , as they had a god given right to race, so all kicked up a stink and made it a private club, and that is what it is. PCR has no right to compete, all it can provide is a funded car, and a eager team, with a hungry driver..... not what we are looking for is it folks, we want people who understand the class sytem, and are part of it by the simple fact that they have been in it for a while......

What is happening is that TV is being restricted and all class's are moving to this sort of "buy in" sort of a deal.. you all best get used to it. the only thing you can race with TV and not buy in now is Formula Ford

[Just Do It!]

Can you quantify the statement that PCR have no right to compete? Hasn't motorsport always been about access to funds? So Paul has access to the funds. Now he can compete. What might have stopped him competing sooner is the restrictive entry that you disdain. Having said that, that very restrictive entry is the very thing that provides value to his sponsor and driver as all know they will get a start at every single round.

Its all to everyone's benefit really, as you know that all that money tied up in infrastructure is being utilised so that the whole package isn't sitting around for half the year twiddling its proverbial thumbs

[thirty4]

Can someone tell me why is it so hard to accomadate the extra cars? Why cant they (avesco) use their money to help the track owners fit them in?

[mmciau]

Originally Posted by thirty4

Can someone tell me why is it so hard to accomadate the extra cars? Why cant they (avesco) use their money to help the track owners fit them in?

I'd suggest one of the driving reasons is the length of pit row and the associated facilities.

I think Adelaide is 34 bays but two are taken up by the "No1 race day feature (safetycar)" and another by track amenities. And the limitation of track box booms, etc

All these "fit in the TV picture!!!


Mike

[Spunky]

I heard only in the last couple of days that Tega have already approved the sale from Nash to PCR.

[Onlooker]

Originally Posted by Just Do It!

Can you quantify the statement that PCR have no right to compete? Hasn't motorsport always been about access to funds? So Paul has access to the funds. Now he can compete. What might have stopped him competing sooner is the restrictive entry that you disdain. Having said that, that very restrictive entry is the very thing that provides value to his sponsor and driver as all know they will get a start at every single round.

Its all to everyone's benefit really, as you know that all that money tied up in infrastructure is being utilised so that the whole package isn't sitting around for half the year twiddling its proverbial thumbs

The PCR thing was a sarcastic remark , sorry to not have included a


The restrictive entry provides a haven for under performers, as it stands any half smart team with almost any driver can get within 1.5 seconds of the front row. So what you are lining up and paying for is 10 cars that are on it, and 20 that are just there because the rules make it impossible to be any slower

Providing value for his sponsor , I think not. If he wasn't providing value, by hireing the right staff, getting the right drivers, the sponsor would go elsewhere to some one who is, ala NASCAR . you think about it, and I bet you can name 10 drivers that have had a fair chance in good equipment to win the championship, or at least challenge for it. Time to move em on.