Thursday, June 10, 2010

Texas IndyCar Price & Market Value


Thanks to multiple contributors who brought the latest IndyCar television ratings data to my attention.


You know who you are.


According to Sports Media Watch, the Firestone 550K on Versus attracted 518,000 viewers. The same race in 2009 drew 467,000 viewers. Any increase is good news for the series. Adding 11% year over year is solid.


These numbers give us an opportunity to value the returns to IndyCar team sponsors that are attributable to participation in the Texas race.



Math!


We begin with our quantifiable benchmark, namely the value of sponsoring a full-time championship caliber NASCAR Cup car in 2010. As we have said, published reports and our own revisions indicate that such a team could anticipate generating approximately $18.649 million per year in sponsorship revenue.


We assume that the primary driver of sponsorship value is television ratings. Supply chain derivatives and arbitraging activities that have nothing to do with the value of the racing product are excluded from our analysis. Subsidies that are paid to teams by drivers and the league are also excluded.


The 36 NASCAR Cup events in 2009 combined to attract approximately 236,720,000 TV viewers in the United States.


$18,649,062 / 236,720,000 viewers = $0.078781098838767


Therefore, the sponsors of a typical championship caliber NASCAR Cup team pay a bit less than $0.08 per U.S. television viewer. Therefore, that number (not rounded) is the market price that sponsors can be expected to pay.



Firestone 550K: the Valuation


I remind you that the IndyCar race at Texas attracted 518,000 U.S. television viewers.


Thus, the valuation equation:


518,000 viewers * $0.078781098838767 = $40,808.61


The Texas race was worth $40,809 in advertising value to sponsors such as Penske, GoDaddy.com and Target.



Return to the Benchmark


So, how did NASCAR Cup compare? Let's take a look.


Sports Media Watch notes that the Gillette Fusion ProGlide 500 at Pocono drew its worst rating since 2007. However, it still managed to draw 5.3 million U.S. television viewers on TNT.


5,300,000 viewers * $0.078781098838767 = $417,540


Therefore, the NASCAR Cup race at Pocono was worth $417,540 in promotional value to sponsors of the top teams.



The Meaning of Market Competition


Notice that the value that accrues to sponsors can be quantified. Econometrics are far more sophisticated than anything that I have noted here, but the point is the same.


This is why I am very concerned about returning to the CART model. Yes, CART event promoters did very well. Temporary circuits tend to be very good for promoters.


However, CART was fortunate that it did not have an established market competitor that was worth nearly 10x its value every time it put a product on the track.


In addition, tobacco companies that provided ample funding to CART and many of its teams and drivers are now gone. Those firms did not care about ratings - they advertised in CART because it was the only way that they could promote their products on television.


Those funding sources are gone forever.


Sponsorship of a top team in the Texas IndyCar race is now worth approximately 9.77% of sponsorship of a top team in the NASCAR Pocono race. Even if IndyCar were to quadruple its rating, its teams would still need to sell sponsorship at a price that is more than 60% cheaper than the price of NASCAR team sponsorship in order to be competitive in the marketplace.


Roggespierre

63 comments:

  1. Roggespierre said,
    "IndyCar must attract a large television audience in the United States."

    Okay, I'll bite. How?

    I'd like to preface the discussion on the assumption that we can provide a car that can be run for $1MM-$2MM per season and not get drawn off into exactly how we'll do it.


    With IndyCar we've had:
    a) A field of all American drivers - ratings still declined.
    b) An all oval series - ratings still declined.
    c) A majority of the races on ABC - ratings still declined.

    So assuming we have a car that meets our target costs, how can we increase the ratings?

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  2. "With IndyCar we've had:
    a) A field of all American drivers - ratings still declined.
    b) An all oval series - ratings still declined.
    c) A majority of the races on ABC - ratings still declined."



    Yes, and we saw that all when we had an AOW split and everybody in the media (most paid by CART) telling folks how terrible the IRL was and how inferior their product was to CART.

    And even with that, we had MANY more folks watching, many more teams participating and many more sponsors on cars, then we see today.

    If we actually get to a point where we have a series dominated by American drivers again in consistant rides, mostly on ovals, promoted correctly and everyone pulling in one direction, we could actually see if most rational folks premises are true or not.

    Most of us DO know one thing...the current slop we have will NEVER work.

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  3. Okay, we have one vote for: build it and they will come (back).

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  4. John,

    That's a great question. You have already provided a good portion of the answer.

    If the annual cost of operating a top-flight IndyCar team were, say, $1.5 million, then I can see an almost purely economic solution to the problem.

    Prior to the split, CART paid its teams $20,000 in appearance money for each event. Taking actual inflation into account, that would be a bit less than $27,000 today. Let's round up and say that we're going to pay each team $30,000 per race in appearance money.

    Remember, we are assuming that top teams operate with budgets of $1.5 million per season. We have already figured out that they can anticipate generating $1 million in sponsorship revenue each season because that is what IndyCar team sponsorship is worth.

    If we pay $30K per race, then we are assured that each team will have secure its operating budget if we run 16 or 17 events. Note that sponsors have accessed the series very cheaply. Activation at the various local venues might just lead to increased attendance and greater sanction fees. However, we shall not make that assumption.

    We shall assume that IndyCar at present distributes $55K per team in appearance money at each event. I'm have no knowledge that this is correct - it probably is not - but it's likely somewhere in the ballpark.

    Let's further assume the following equation:

    $55K per team * 24 teams * 17 races = $22.4 million for the season

    If we were to reduce the $55K to $27K, then we would have the following equation:

    $27K per team * 24 teams * 17 races = $11.02 million for the season.

    We have saved the series $12.38 million. The teams are fully funded. They have not taken a dime from a single driver, as some undoubtedly will.

    What to do with the $12.38 million? One option would be to buy network TV time. Now that the costs have been adjusted downward so that they approach the product's market value, a network time buy makes sense.

    We're looking at $12.38 million to buy the 12 races that are not currently carried by ESPN on ABC. That should be enough money to get it done.

    This move alone would likely come close to doubling the present viewership for IndyCar racing. This raises the base upon which teams sell sponsors to corporations. Therefore, teams can charge more.

    Note that we have done nothing to promote the series or change the drivers. We have merely cut costs so that we can sell the product at its market price.

    I happen to believe that additional American drivers would now have an opportunity to compete. This would raise the marketability of the series.

    That is why I have favored a financial solution all along. There is no way that IndyCar can promote its way out of the hole that it's in.

    I recognize that this explanation is simple if not simplistic. I'm no insider and I don't have updated cost and benchmarking data.

    But the principle still stands.

    Best Regards,

    Roggespierre

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  5. Exactly RP ! Now you cut the team cost by 40 percent (and yes boys & girls say byebye to an overload of engineers) and now you have a budget that not only works, but a return for the owners. Gee.....ya think that might get some people to get back in the game???? Certainly would make it a lot more attractive!!!

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  6. Wow, a bump of 51,000 viewers to the single biggest opportunity for increased ratings on the Versus schedule.

    What did a single TV spot during the NFL Playoffs cost Izod? Is $100K a fair guess?

    That's evidence of a long term strategy producing no result.

    No telling how much of the budget is dedicated to singing to the choir, in commercials shown to the niche audience that watches other Versus programming now.

    And it didn't draw much of the 3.6 hockey crowd, did it.

    Promotions from the IRL budget are equally effective at reaching the existing customer base, and not attracting any new eyeballs.

    Elevating ratings is the only way to close the sale with potential sponsers. Elevating Series and team revenue is the only way to return to a solvent foundation that can fund the future changes that are promised.

    The whole strategy of promotion must be based around attracting new audiences, and ignoring the existing fans. They will watch anyway.

    There is a list of promotions that will produce incremental growth, posted on my blog and in many cases repeated here. If a $1M budget attracts 51,000 new viewers, you lose.

    And if a $1M budget is all you can raise to run an IndyCar team, you lose. Nobody will watch. This is a revenue problem, and the equation only changes when promotion draws new fans and the potential sponsors know it.

    Wrench, could Uncle Bobby have run a one car team in 1982 for $2M? That wasn't explained to the guys who put the Schlitz and Esso stickers on the car. You might have a better perspective from where you have been.

    Andy
    One of the Mighty 518,000

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  7. Roggespierre,

    I think you'd agree that buying television time is a pure stop-gap measure. The hope being the additional revenue would create an upward spiral, leading eventually to a point where networks were willing and eager to pay IndyCar to televise their races.

    My concern is that's basically what the NHRA is doing but on a little smaller scale. The NHRA is paying upwards of $10MM/yr. to be on ESPN and it doesn't appear to be working all that well. I mean they're getting the much-needed media exposure from the time-buy, but they're not achieving any exponential growth because of it.

    That's my problem with claim that if we just put the IndyCar Humpty Dumpty back together again all will be well. The NHRA is basically what it has always been. They're American drivers on traditional tracks, but they're not growing. They're basically flat-lined in the market and I believe, even if we made IndyCar what it was, we'd find ourselves in a similar scenario. And as they say, "if you're not growing, you're dying."

    Long story short, if IndyCar can't grow on it's own merits whether on Versus or ABC, then that's the primary marketing problem that needs addressed. And I pretty much agree with Bernard on the following point: to achieve growth, IndyCar drivers need to be perceived as the best and compelling story-lines need to be created and maintained. In today's market, you need 'the best' to sell the sport aspect and the story lines (previously on Survivor… stay tuned for scenes from next week's episode, etc…) to sell the entertainment aspect. You might be able to survive on either the sport or entertainment aspect, but I think you need both to grow.


    -John

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  8. John: Name one story line that doesn't involve a drivers teeth or his tax problems? Ok, lets take the Go Daddy person out of the equation. What have we got now? How can you create a storyline when it takes a small fortune to create on?

    Andrew: Uncle Bobby could run a team for much less than the 2 mil but....You must first understand management, both personel and financial. Would you care to explain his credentials in either. Hence why you saw what you did. Garza paid for a name...not a race team manager. Guys like Steve Horn or Tim Cendric are an investment, not a liability. Can't say the same for your friend Uncle B! Good driver and understands car setup but.......? Fill in the blank!

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  9. Ok, if you say so. Guys like Cindric and Steve Horne each bite off about 1/2 of your $1M budget in one shot. Nice teeth.

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  10. Now..would you care to add Rick Rinaman & Larry Curry to the budget???? How about we toss in Tony Cicale just so we have one good engineer/aerodynamicist? Any money left????

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  11. Hopefully, the point is made.

    Uncle Bobby was a bad example, in that the cost of his services was likely not a prudent investment.

    The question was more about the approximate budget of teams in that era, which I suspect was well above $1M per season.

    And today's cost of the technical staff you mentioned is a major line item in the budget. Yes it should be cut, but even 40% cuts across the board gets you from a low estimate of $5M down to $3M. To get to $1-$2M today, you race FA.

    It's a revenue problem. Cost reduction will be an assist, not a remedy.

    Andy
    One of the Mighty 518,000

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  12. You can't do one without doing both. To make Indy Car attractive you have to work with the current numbers. If it is worth 1.5-2.0 mil in the market, then the budget must match to get any consideration by a sponsor. It is based on a dollar for dollar value. In this current economic downturn you need to get a higher return for the investment or they won't bite!!

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  13. John,

    You touched on many difficult subjects.

    Yes, I do agree that a network time buy is a stop-gap measure. However, it can work if it is done correctly. I'll try to explain what I mean by that at another time. Please remind me if I forget.

    I totally and completely disagree with Bernard regarding his talk about "the best". To use one of my favorite lines, you can sell The Best pickled herring in the world, but it's still pickled herring and very few Americans will buy it.

    In this case, I really don't like Bernard's logic.

    Quit focusing on being Number One. Focus on becoming sustainably profitable. Only then should you worry about becoming number-one.

    For example, the ratings for ESPN Big East and ACC football on Thursday nights have been growing for years. Is college football The Best? No, the NFL is The Best.

    Are the Big East and the ACC even The Best that college football has to offer? No, it's not even close. That designation clearly belongs to the SEC. The Big Ten (12?), the Big 12 (10?) and the PAC-10 (11? 16?) are all at least as good in football as the ACC and the Big East.

    It doesn't matter. Far more Americans will watch Clemson vs. Georgia Tech than will watch Man-U and Chelsea. The latter are commonly regarded as The Best. The former are not. It doesn't matter.

    Formula One is broadly considered to be The Best. Nationwide is not considered to be The Best. Whose U.S. ratings would you rather have?

    So, no, I think that Bernard is dead wrong.

    Besides, what are IndyCar drivers The Best at, exactly? Ovals? No, because they consistently demonstrate that they can't win in NASCAR, which truly does have The Best at that particular discipline. Road courses? No, because that's where F1 drivers are The Best.

    Airport racing? Maybe, but only because there is no competition.

    Forget about being The Best. Focus on what the customers REALLY want - aggrandizement, intrigue, thrill, affirmation and community. If that's what Bernard is really talking about, then good for him. Talk of "The Best" would then make some sense.

    Best Regards,

    Roggespierre

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  14. Or change the current numbers, with promotional strategies that show cost effective results. Raise revenues.

    Back to NHRA. Every track they visit has local events, where the tuner boys come out by the hundreds. So add a class with a four round elimination bracket for the best local racers at each track, and televise it right there with the Full Throttle pro stocks and bikes.

    Think kids would want to watch? What's that cost, $20K for a total purse? A chance at $10K, and a few passes on national TV. Kids would watch.

    Andy

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  15. RP,
    It's a minor branding strategy, nothing more. If Bernard expects it to convince people, you're right and he's wishing.

    The best guys get no love now. The show on the race track has to be the best. So do the ways to get people to check it out for the first time.

    Andy
    518K
    No 401K

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  16. Obviously getting Marky Mark to ride around with Mike Andretti before Indy, got about 51,000 extra folks to tune in for Texas. IZOD's money was well spent. Hopefully we can eclipse the magic .5 barrier in TV ratings this year again. Its the gold standard that most tape delayed monster truck shows and 30 year old AWA wrestling clips on ESPN Classic, go by.

    What do you mean we have no interesting stories in Indy Car? I mean, the story of Ryan Hunter-Reay and Graham Rahal hopping from team-to-team and car-to-car the past 2 years because there is no money in the sport to run them full-time, is scentilating stuff. The kind of stuff you see in Star Mazda or Can Am (oops, they're dead aren't they?) or Champ Car (yep, gone too?) all the time.

    Its that kind of hard-hitting stability with our American heroes that I am sure is a reason we are setting records each year with Indy 500 ratings.

    "Who is driving that car?" "Hell, I don't know". As long as the racing is good (or whatever we consider good racing today) it doesn't matter. Right CART II fans?

    And these foreign drivers all have great stories to tell. Granted, they might tell them in Portugeese or Japanese or whatever language Milka speaks, but if you can get a PR man to write it out for you, its good stuff. I mean, who else gets chills hearing how Mario Moraes got into Indy Car racing? Nothing better, then a teenager from a Billionaire's family, who was mediocre in whatever series he came from, coming to America and asking Dale Coyne "how much do you need?" That's the kind of American Dream stuff that Indy Car is filled with. These are kinds of drivers that resonate with Joe and Jill Six Pack in middle America. The kinds of drivers, you never heard of or never watched race before they got here, but are here now and dammit, they are OURS! Suck it up and enjoy us, baby!

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  17. Bob White,

    Wow! Please don't hold back next time.

    I think that there is room for foreign stars in IndyCar. In fact, I think that it's good for the sport.

    Emerson Fittipaldi was very good and very popular, for example. And I don't think that anyone would say that Jimmy Clark hurt Indy when he came to the Speedway and excelled.

    But I do agree with your main point. They can't all (except two) be foreign. That's just not a product that American racing fans will buy. You might convince them to come to a party that happens to include a race, but you'll never get them to watch it consistently on television, where the vast majority of the money needs to be made.

    I don't want IndyCar to look like a Silver Crown race, not that there is anything wrong with that. But I would like to see some diversity. Right now, virtually all of the drivers, including all five drivers for the top two teams, are international road racers.

    That's why I call it an international road racing series. I don't care that Bernard wants to crown an oval champion and a road course champion. Until there is some legitimate diversity among the drivers, then it shall remain an international road racing series.

    BTW, speaking of Graham Rahal, did you notice that he was the driver that the Baltimore promoter trotted out to tout the race in the local media? What the heck is that all about? Why would anyone think that Graham Rahal will actually drive in that race?

    Sure, he might. But, as things stand right now, it's hardly a sure thing.

    Where were the "stars"? Where were Briscoe, Franchitti, Dixon, Power and Castroneves? Practice had not yet begun at Texas, so why was a part-time driver helping the Baltimore promoter?

    Might it have had something to do with his nationality, with the way he might sound on radio and television interviews?

    Nah.

    Roggespierre

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  18. Andy,

    Minor branding strategy - that's a good assessment, I think.

    You're right. He isn't going to convince anybody. But maybe it'll work with those who already want to believe it?

    Best Regards,

    Roggespierre

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  19. Roggespierre said,

    "Forget about being The Best. Focus on what the customers REALLY want - aggrandizement, intrigue, thrill, affirmation and community."

    Sounds good. To help me get on page, how would you rank/compare IndyCar, NHRA and NASCAR with the above factors of aggrandizement, intrigue, thrill, affirmation and community?

    Are we ranking on a 0-10 scale where below 5 is decay, above 5 growth and 5 representing sustainability?

    I'd imagine there's some sort of aggregate sustainability medium whereby a high ranking in say intrigue would offset a lower ranking in aggrandizement.

    Maybe some sort of strategy canvas comparing IndyCar, NHRA and NASCAR would aide in figuring out where IndyCar is lacking most.

    -John

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  20. Not only did they trot out Rahal, but Little Al has been on prominent display - trade on the Unser name, too.

    Brabham, Clark, Hill, Mansell and Fittipaldi brought World Driving Championships, i.e bonafides as among "the best" in the days of American driving titans. There was also a novelty factor involved with each, not to mention a personal fan base. I once saw Hideki Mutoh wander the Milwaukee Mile grounds competely unmolested. I'd bet Dario Franchitti could walk most places without a second glance cast his way, unless Ashley was on his arm.

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  21. John,

    Are you John Lewis?

    Bob White,

    In the words of the immortal, omniscient Robin Miller....Rant of the Week.

    Hey Izod,

    Are you the Funky Bunch?

    Andy
    Intrigued at 3.67, trending data inconclusive

    ReplyDelete
  22. John,

    I can't speak to NHRA because I don't know enough about it.

    Regarding NASCAR...

    Aggrandizement = 5
    This was particularly important when NASCAR was primarily a regional sport. Aggrandize = to make larger. They always said that the South would rise again. They just didn't tell us that it would be in motorsports. My ranking would've been greater, say, five and ten years ago.

    Intrigue = 4
    This would've been greater during the days of pretty boy Jeff Gordon vs. the Man in Black. I don't sense that kind of 1-to-1 rivalry today. The latest shenanigans of the Busch brothers add some intrigue. So far as the cars are concerned, the common template has deflated Intrigue considerably. I couldn't stand the seemingly weekly concessions to Ford, Chevy, Dodge, and then Ford again, but NASCAR fans seemed to love it.

    Thrill = 6
    Rubbin's racin'. That part still works. No, not every race is thrilling, but the banging has its appeal.

    Affirmation = 9
    This is the key to NASCAR's success, in my opinion. It reaffirms for middle class and, let's face it, white Americans that they are the stars of this country. The drivers really are just like their fans - or at least they were before they got rich. There is a reason that Sarah Palin stumps at NASCAR races. She knows that she'll find plenty of "momma grizzlies" there to flatter. NASCAR is about sociological identity.

    Community = 6
    This is linked to affirmation because so many in the NASCAR community want to have similar values affirmed. Some probably want to get away from people who aren't like them. This might not be commendable, and it certainly isn't PC, but we're not operating a liberal arts college here; this is business. If a very large audience wants to pay money to get away from others and feel good about themselves, then by all means, let's accommodate that audience. I downgraded the number here because the number of Confederate flags has declined in recent years. Say what you will about the Stars & Bars, but don't say that it wasn't a very powerful indicator of a specific community. Now, it's more of a nationalistic, Old Glory crowd. That might count as progress in the sociological sense, but it actually represents a slight weakening of what had been a very tight community.

    Please note that this is my assessment of NASCAR. I'm not saying that IndyCar should be the same. It has and needs its own assessments.

    I'll do that next.

    Best Regards,

    Roggespierre

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  23. Andy,

    There is absolutely no way that a highly respected guy like John Lewis would hang out here.

    Best Regards,

    Roggespierre

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  24. Rocketman53,

    That's right. I forgot about Little Al.

    Also, I have watched the Washington Nationals the last three nights, including the debut of a true force of nature named Stephen Strasburg.

    I am happy to report that the IndyCar Series was featured in a Honda commercial during each of the local telecasts. The IZOD 2-seater was on full display.

    It was driven by Mario Andretti, who starred in the commercial. There were no current drivers from the IZOD IndyCar Series.

    Best Regards,

    Roggespierre

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  25. Rocketman53,

    Your point is well taken. Fittipaldi and Clark are poor examples because they were already worldwide stars when they came to IndyCar racing.

    Arie Luyendyk is a better example. He was nobody when he got here. The late Jim Phillipe called him "Arnie" when interviewing him on the PA system in his rookie year.

    Arie became a star because in 1990 he beat Mears, Mario, Michael, Little Al, Big Al, Foyt, Sullivan, Rahal and other established stars, most of them American.

    Dario Franchitti never had that opportunity until he raced in NASCAR Cup. From the look of things, he won't have that opportunity in IndyCar any time soon.

    Best Regards,

    Roggespierre

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  26. I see the discussion has turned interesting here tonight...but I spent a little bit writing this, so I'll post it. Feel free to consider another day. (also, the below is probably more completely written here.)


    Anyway, here's my take: the core qualities ("aggrandizement, intrigue, thrill, affirmation and community") as provided by IndyCar all are most realized in the running of the Indianapolis 500, and always have been. As we have found discussing here over the past year, the ideal identity of IndyCar is EXCEEDINGLY difficult to pinpoint.

    Maybe "What should IndyCar be?" is the wrong question.

    Indy car has always been defined by the Indianapolis 500, and isn't that the reason we're all here? Does anyone here love the concept of "IndyCar" so much that they would do away with the 500 in exchange for a healthy series? Roggespierre, I doubt you would. I know I wouldn't.

    I argue that this relationship between 500 and series has always been the key. What is IndyCar without Indy? It's nothing. It's identity-less and nearly audience-less. The cornerstone of NASCAR is not a track - it's a region and a lifestyle and a faint history of lawlessness. The cornerstone of IndyCar is The Indianapolis Motor Speedway, period.

    So perhaps the key question is "What should the Indianapolis 500 be?"

    And we already know some of the answer: it should be what it was.

    The problem is that The 500 has become seriously disconnected from what it was, from touching the pulse of America - it no longer is a reasonable thing for a kid to dream about racing in. It no longer looms large over the American short oval culture - the only minor leagues that really grow names. It's no longer a thing that represents the forefront of some plane of human achievement, or a grueling archetypical battle of both man and machine.

    The focus should be on recapturing these things, not trying to build and market a series that will by its nature somehow elevate the 500. It works the other way around. Always has. Or am I wrong?

    Roggespierre, I appreciate the angle you've been taking - but what if the objective were to draw up a plan for the 500 as an end unto itself? To take the 500, and using all available resources, make it what it could/should be?

    With the baggage of a series not clouding the vision, would the approach still be to cut costs or would it be something different? As Danica-mania showed, significantly spiking viewership with compelling circumstances at Indianapolis is certainly possible...

    -Bill

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  27. Bill,

    Those are some BIG questions you're asking. They deserve careful consideration. That I can't answer them quickly speaks to their depth.

    Give me some time. It's too late tonight.

    I promise that I'll think about it and address the issues that you have raised.

    Best Regards,

    Roggespierre

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  28. "...a Honda commercial during each of the local telecasts. The IZOD 2-seater was on full display."

    Ugh. With funding for commercial spots available, my sweepstakes plan for the ride would have had major legs. They finally came up with the idea to do it at Sonoma...was that promoted in the commercial?

    Andy
    Lowly respected guy. Ask John Lewis.

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  29. The solution is to stop chasing the "affordable" car. It is a pipe dream. Instead settle on a formula that is expensive, will create compelling (fast and innovative) racing. Add only enough structure as would be necessary to prevent f1 style arms races.

    The trick to making expensive racing work is to implode the schedule. Reduce indycar to the 500 and a few other races that can be paid for by the 500 sponsorships.

    Only add more races to the schedule when the demand comes back. Right now every race outside Indy is a loser. You don't maximize profits by adding more money losing events to a schedule that already has trouble paying the bills do you? If the series had 7 races marginal cost would exceed marginal profit, who is the genius who said 'let's add 10 more so we can really piss the $ away!'?

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  30. R said: "Arie became a star because in 1990 he beat Mears, Mario, Michael, Little Al, Big Al, Foyt, Sullivan, Rahal and other established stars, most of them American."

    That's right, he earned a level of stardom by beating the stars. Buddy Rice...Franchitti...not so much.

    BC wrote: "Indy car has always been defined by the Indianapolis 500."

    Absolutely. Indycar really didn't come into the vernacular until the '70s, beginning as a headline shorthand for the kind of cars that race at IMS. Until CART abandoned USAC there was the National Championship. Frankly, that is the terminology that needs immediate restoration - not some substitute IZOD Cup or such nonsense.

    I have long advocated the restoration of the 500, with a compelling purse ($25 mil) and reasonably open specs. I'll go a step further - target the engine formula for top IMS lap speeds of about 200 miles per hour. That's still significantly faster than NASCAR or FI, and may improve the on-track product...then let speeds grow again. It's not unprecedented in 500 history.

    Anonymouss wrote: "The solution is to stop chasing the 'affordable' car. It is a pipe dream."

    How about this: Race what you are willing to afford. There are 33 starting positions that each pay a substantial amount, from nearly $2.7 mil for winning this year to about $270k for 33rd place. The total purse was $13,592,815. I am confident the purse could be bumped to $20-25 mil by withdrawing all series subsidies. The economics will work themselves out.

    "The trick to making expensive racing work is to implode the schedule."

    No,the trick is to get IMS out of the series business and back into promoting the 500-mile race as an event in its historical context - not as another grind in a meaningless championship series.

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  31. Anonymous,

    Cutting down the schedule is an idea that has some merit, IMO.

    I am not as excited about the expensive formula solution. Other than Penske and Ganassi, who can afford to race it?

    Best Regards,

    Roggespierre

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  32. OK, I'll play along.

    Roughly DOUBLE the purse, so double the 33rd place payout to $540K.

    So Wrench and me and an engineer and 5 young studs at a Ford dealer are going to build a car and enter. One race.

    What is a sponsor going to pay for exposure as the 33rd qualifier for the Greatest Spectacle in Sports? This is the smallest of teams, not Ganassi or even Sam Schmidt.

    That doesn't get you $500K now. We'll be generous, since the Sweepstakes is now going to attract World Wide attention. Maybe world wide entries too, which gives us even less of a shot.

    But Mr. Fungible cuts a check for $1M, and we get to work. Wrench has a shop and equipment, that's out of pocket so it's zero for the line item on the budget. The young studs are working for free at night, until testing begins. Three on the payroll.

    We're going to build the car in three months, then test in early May, and go to the Speedway and put it in line.

    3x$25K for 4 months pays the chiefs, = $75K.
    5 x $5K = $25K for the crew. We're doubling up in a cheap motel and eating burgers for the month of May, so the total lodging/expenses will be $10K. $110K total.

    The engine development work has been done on somebody else's dime. Total cost for each engine wuth every conceivable ancillary and all consumables added, $50K each. We need three: test mule, test/qualify/race engine, and one spare.

    Clutches, turbos, headers ect. all included in the $150K.

    Tires? we're testing 800 miles pre-Indy, and 800 miles at the Speedway...including the race. Bare minimum 52 sets. I'm estimating low, $1,400. per set. Tires $73K.

    We're buying old used firesuits for the crew, old fueling rig and setup pad, air guns and regulators, pit cart and tractor, old junk. Garage sale price at $50K.

    Two guys have laptops, I have a calculator and a ruler. No extra budget for telemetry, shaker/tunnel testing, nothing.

    The shop is near Indy, wrench has a pickup truck and we are using a trailer from the Ford dealer. Add $2,000. for gas money and travel expenses.

    Free stuff, old stuff, bare bones, that's $385K. Round it up to $400K for the stuff I underbid.

    We have $600K left. Now all we need is a race car. Build a scratch chassis to comply with safety regs in three months for that money? Forget it.

    We'll buy a cheap new spec chassis for $300K. Spares package, Speedway wings, gears, electronics/engine management, call the gearbox free and we're at another $100K.

    I'll stop there. We still have to hire a skilled American driver to test and race the car. Pay for track time to test pre-Indy, entry fee (now doubled) and probably for a garage at the Speedway. If the million ain't gone, we're close. Beer money for the boys for four months.

    (continued)

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  33. We got through 800 miles of testing at Chicago without blowing a motor or wadding up the car.

    We're at Indy with our new chassis, two fresh motors left, our tires are paid for, out pit is set up...

    Wrench turns to me and says "Hey genius, you didn't buy any sets of spare wheels". Sorry about that beer money, guys. I need it back.

    And now we have 80 laps to set up our chassis and track tune our new engine. Everything goes perfect: whatever shocks came with the chassis (we hope) are dialed in, a gear change or two, make a couple of wickers, a few hundred bucks for helicopter tape, we're ready to ROCK.

    So who else is there? Are the garages full of a few moguls, and some Nascar guys who came to take a shot? A few $10M prototype entries, with huge engineering staffs, here to claim the $25M?

    Most of the others have a spec chassis, same as us. Then there is a contingent of old Dallaras, with Honda engines that they bought refurbished from Ilmor.

    That's the show the people will get to see, for the slightly adjusted price of their ticket.

    Wrench, can we get in the show? If we didn't have to fight through crash damage, or reliability problems with an untested engine, or a young stud not dropping the ball along the line?

    Let's hope so, 'cause we're in line now. Pole speed is 236, and there's only 8 guys above 230. We're near the bottom of the practice sheet in the 225's. Along with the other new teams and shoe-stringers, and the experienced guys who came out of mothballs with their Dallaras.

    Too bad if people are worried about the Show, that it will be dominated by the rich guys and clogged with slow traffic. They're more concerned that the price of the beer went up. Double.

    Tony Cotman leans in as our driver prepares to take his shot....

    "Show 'em what the American Dream is all about, kid. Give me four good ones".

    And they better be. We're not even sure we have enough tires to make three attempts, and still be able to run race setups on Carb Day.

    Mr. Fungible is pacing. Wrench reaches in the cockpit and twists the boost knob. I'm taping down the leading edge of the smallest front wickers we ran all month. Stud #1 plugs in the air starter. The engineer leans in...

    "We need 226.3 kid, or we go home.

    With NOTHING".

    Light it up.

    Greatest Spectacle? Lifestyles of the Rich and Famous? Junk Formula? A fair shot at $25M?

    As if.

    Andy
    Chief wicker taper.

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  34. Ok Sport...my turn! We now come back after Attemp #1 226.335 Ok we are in but by the skin of our teeth. Here comes that pocket full of cash bunch from Texas. They send out the Texas flash who lights up the board at 227.011. Now we have a problem. If this thing isn't in the show, Andrew and I will now star our lives over agin at the local Dairy Queen serving scoops and asking ourselves what the hell happened??? So, back to the garage we go! After a brief consultation we decided to yank the motor and start tweaking the thing. Toss it back in, and head for the line. Our star youthful rocket gets the pep talk and we go for round number 2. 2 warm ups and then he stands on it. Lap one comes up to 227.500 the next 227.445 the third is a happy 227.664 and then BANG! All the tweaking just sent engine number one home in a parts box! Well, that idea didn't work! So now we take it back yank the lump and start over tommorow. To be continued.....

    oldwrench
    future custard server

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  35. The Lump is removed and a new unit installed. Again after tweaking and some chassis changes we head for the line again. But THIS TIME it is all or nothing. Zippy the wonder driver is growing old of the "pep talk" but is willing to lay it out one more time. This time he lites up the boards and we're in with 227.770 on all 4 laps. But one problem, 2.5 hours left 15 more cars, 0 chances left for us and 4 cars with a real chance. Team decideds it is Pepto Bismal all around as we wait and wait and wait.....

    After all ....we are in but now as Andrew has pointed out. Carb Day, no funds and 500 miles to go! Makes for a short life span!!!

    oldwrench
    Indy 500 participant less 30 years on my life

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  36. Dammit Wrench. I like your style.

    Can you see it in your mind? Buddy Lazier, watching Dawes take out MORE wing, so maybe he can grab the last spot like he did the year before?

    Larry Curry forging an IRL seal to put on the pop-off valve he just rigged?

    Try the thinner head gasket, Boss. I'll swirl polish the intake valves in the bench press. Have the engineer remap the ECU for all the advance this bitch can handle.

    We're getting in, or we're leaving a bigger puddle in the North Chute than Greenfield ever dreamed of!

    Andy
    Kitty litter sweeper

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  37. Uh oh.

    Bumper by Bert Baguette in a Brian Hetra Racing Dallara/Honda.

    Can I get some fries with that Smoothie?

    Andy
    Asleep by his toolbox

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  38. I agree Andrew. But for the rest of you, that is the Reader's Digest condensed version of why racers are nuts! Who in their right mind would try this ?? But I believe there is a Falcon out there with my name written on it. This is a story line and something Indy Car forgot about. A lot more interesting than someone's teeth or tax issues!!

    oldwrench
    Future out patient at the mental ward

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  39. Out-patient my ass. You broke out.

    "Two Flew Over the Cuckoo's Nest Racing"

    Whench, you got a pickup truck?

    Andy
    Adjusted gross income and teeth to match.

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  40. Question: how is this different than say, SFR's Jay Howard experience this year?

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  41. BC: I can't really say but I would say that the ending is pretty much similar. You have people to answer to and if they will re-up sponsor money will be a question. Why do you think Sarah Fisher was so upset? Lost revenues and that hurts her business. Makes for a tought year and the hopes to expand.

    Andrew: Pick up? no, but I can get many !!

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  42. It isn't. SFR sucks. So does Jay Howard.

    They had a good PR guy who was able to sell image well enough to fund their bare bones operation. Even brought in enough cash to buy a new rig and move into Roth's shop.

    Even more money comes in, despite their showing as a tail-ender in a spec series that nobody watches. The only real success story on the team, Briney the PR guy, makes money off a book deal and starts his own branding firm.

    Two new chassis, two old chassis, not enough budget to make more than half the races.

    Struggle at the back without a clue as to why your spec car won't respond to setup changes. Find out way too late, because your guys are none too smart, that the good tubs went to the big teams and you got factory thirds.

    Smile for the camera because you're an American, a woman, a spokesperson fighting to cure cancer and your PR guy is still kicking ass.

    Hire a non-American driver because he has a connection to some tire money, or is desperate enough to float his career hopes in an evil handling race car.

    So he sucks. Sarah Fisher sucks. Same for some of the other tailenders, low budget or not.

    And they race in a series that sucks, or you wouldn't want to change it.

    So the answer is to drop 16 events that sponsors will at least pay SOMETHING for? Take away the TEAM money and add it to the Sweepstakes prize?

    Open up the regs so that more teams who suck even worse, who don't have great PR guys or boobs, can clog up the field ? Until the rich guys get together and push through a rule that sends you home?

    Jay Howard got paid. Sarah and her crew got paid. That's what PR guys and sponsors are for, and why a schedule of races and Series subsidies can drag in enough money to fund an Indy effort. If you had to sleep in cheap motels and eat burgers, you wouldn't have a new rig and a spacious shop.

    For just one race? That's for Penske and Ganassi, a couple of others, maybe Ferrari flies in a one-off. No sponsor will pay big bucks to fund a small effort for two days of scant air time. If they get that much.

    The rest of the one-offs would be suck teams and shoe-stringers. Cuckoos.

    Jay Howard would have to buy a ticket to see qualifying. Serice Central didn't pay SFR $1M for an Indy-only effort for one car. Not even Briney is that good. And Sarah ain't that hot.

    You'd have to find a Mr. Fungible to take that kind of deal, and you just read what his money would get him.

    Ganassi gets the $10M for the win, Penske gets $7M, maybe they cut a deal to split it 50/50 while they're at the bar re-writing rules for next year.

    Howard leaves the stands after qualifying and drives home in his Lexus.

    I'm riding with Wrench and the boys in the pickup. We'll get 'em next year. So will Jay Howard.

    Andy
    President
    Klint Briney Fan Club

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  43. Denouement

    Through all the time I have spent here during the last year, two good things happened.

    The first was recounted on my blog in April:

    "There was a blogger I used to read named Roggespierre. Very smart dude, he opened my eyes to a thumbnail sketch on marketing strategies and cited sources which contained troves of information.

    He used them as hammers to bend everything from wishbones to wickerbills, pounding on all the things he thought were wrong with IndyCar racing today. In establishing factual repairs to the damage, I learned a few things. So I thank you, RP. Twice."

    In case that doesn't qualify, here's my third attempt. Thanks, RP.

    The other good thing is a story that sounds like a scene from Casablanca, sans lipstick.

    I came here pushing promotion as The Indy Idea, and got dogged as if I was ignoring the product. Then I wrote about improving the product until my eyes were watering, and all of yours were glazed.

    Well, except for one guy. He was a little cuckoo, but after a while it became evident that he had a clue. And he always came back here, when the ideologues were all busy with matters much more important to them than IndyCar.

    After a while, he realized that I had a clue too. So last week we trade a few emails.

    There aren't many people crazy enough to care about the Falcon, or who know what it's like to sleep next to your toolbox on the floor of a race shop.

    And there sure aren't many who sat in Mr. Traber's engine class at Lincoln Technical Institute in 1977. One of them was a bit of a loose cannon... pretty sharp, motivated. I think we butted heads a few times then, too.

    So next week, Oldwrench and I are going to have a few stories to share. About the ones we wrote here tonight, the ones we remember from 33 years ago, and all of those we have lived in between. Alot of his are better. It will be a good thing.

    And new stories? Not much chance of that, in a day when ideologies are forged from mergers of high technology and high finance. Most of that is bullshit. That's what racing is today.

    You gentlemen have your own stories to write, and I wish you the same good fortune. We will be sharing what we have learned about machines, and motivation, and what it would take to master the challenges of speed and competition.

    That's the Indy Idea.

    Andy
    Check, please

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  44. "I couldn't afford the wreck for I had everything I owned and could borrow tied up the the cars."

    Who said that?

    Lou Moore, AFTER his two Blue Crown Specials ran one-two in the 1947 race. And how often did he run his two Indianapolis cars on the "Championship Trail"? Never.

    As I've said before, historically, the series featuring Indianapolis formula racers was independent of the 500-Mile International Sweepstakes. Sanctioning bodies and owners may and have formed a racing series fully independent of the 500, while wholly dependent on the 500 for public legitimacy. It worked that way from 1910 to 1996.

    Let the owners, drivers, and sponsors deal with the economics of their sport...er, business. Free markets have a way of making things work. For $25 million you'll get sufficient entries to run a race, and it will either grow or flounder on its merits. Maintain the status quo, essentially a too-expensive spec racing benefit for two well-heeled teams, dragging with it a series hemorrhaging red ink sourced by your only profitable asset, and you've got "FINIS" encroaching on the whole shebang.

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  45. Thank you Rocketman!! That is what Andrew and I have been saying. I will decide how much I want to spend. Not some suit who's interest in Indy is to boost his bottom line. With that, buy the Falcon, shove an engine in under the cover, slap on some goodyears and shove the thing in line. Good, bad or indifferent it is MY choice. Not the suits!!

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  46. I saw on Ed Hinton's ESPN site the guesstimate that Tony George tossed $250 million directly into the IRL over the years, which eventually earned him the vote of no confidence from the family. Imagine that...

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  47. Wonder if I can interest him in a couple of good used RT-4"s ?

    oldwrench
    used car sales person

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  48. oldwrench said...
    "Wonder if I can interest him in a couple of good used RT-4"s ?"

    Maybe. Before he pretended to run a racing series, he was pretending to be a driver. I remember him showing up for the F2000 races with a full-blown CART rig. You couldn't get close to him, though. Not because he was fast, he'd inevitably get too far down on the apron and throw rocks all over the racing line. Lot of DNFs from holes in radiators when he was in the field; lot of pissed off racers too.

    -John

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  49. My reasoning was simple...He likes "spec" racing so much then he should try Alantics with BDA's for a series! Want to spend a large amount of $$$ in a short period of time?? Then baby this sereis is for you !!! Oh.....thats right I forgot....Alantic is gone too !!!!! Hmmmmmm lets see if we can find another "spec" series he might like.....Super Vee is gone, ammmmm....anything else ????

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  50. I think Carrol Smith's books sum up the divisions in regard to what the rules should be:
    -Engineer to Win
    -Tune to Win
    -Drive to Win

    -The engineers/builders want the rules to be such that they can win the race in the shop.
    -The tuners want the rules to be such that they can win the race with data and set-ups.
    -The drivers want the rules to be such that they can win the race with their skill on the track.

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  51. http://mwphoto.smugmug.com/Cars/Super-Vee/1986-Mid-Ohio-SV/35095_LC9g5/1/115407029_GoxNV/Medium

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  52. Have every one of Carrol's books!!! Your point is noted. That's why some of us want the control back. How can any of the forementioned do any of the above if the sanctioning body does it for you? Racing by remote control. So long as it bolsters the bottom line of those in control. Over time, the racer runs out of money. Game over!

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  53. Was speaking about this with my three kids. My 24 year old daughter said she mostly lost interest when Sam Hornish left, although she maintains a passing interest in Danica. My 22 year old daughter is a Helio fan, but is "too busy" to pay much attention or watch on TV and can't wait for the '11 Baltimore event to go circulate the party. My 20 year old son, an aspiring mechanical engineering, professes little interest in any auto racing outside of the slam-bang of the game. Asked about "tuner culture" he laughed and said today's performance guys are into motorcycles - cheap, high tech, low maintenance performance right out of the box - 150 mph, tricks, and profiling in one affordable machine. Then he took off on his Beemer.

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  54. "Asked about "tuner culture" he laughed and said today's performance guys are into motorcycles - cheap, high tech, low maintenance performance right out of the box - 150 mph, tricks, and profiling in one affordable machine. Then he took off on his Beemer."

    And we have a winner!!!!! Looks like your son "gets it"!!! Now lets try making him the head of the Indy Car Series!!! He has more on the ball then the current crop of idealogues!!!

    oldwrench
    worshipper of Rocketman's son !!!

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  55. From Miller's mailbag:

    Q: I couldn't help but noticing that when the announcement for the Grand Prix of Baltimore was made they said that Graham Rahal was on hand along with the usual suspects. Should I read anything into this seeing how young Rahal currently is unemployed? Is there a possible ride in the works?
    Doug, Murrieta,Ca.

    RM: Obviously, they've just announced Graham is driving for Dreyer & Reinbold but it made sense to have a recognizable American at the press conference. Even if he was rideless at the time.

    Really...who knew? I thought "recognizable American" was Al Unser, Jr.'s role.

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  56. So what your saying here is that an un-employed, recognizable American driver, is out promoting a new American race, so a bunch of non American drivers can race at this new American race in front of American fans in a American city??

    Nice marketing plan! Not !!!!

    oldwrench
    now understanding why he is losing his marbles!

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  57. I totally and completely disagree with Bernard regarding his talk about "the best". To use one of my favorite lines, you can sell The Best pickled herring in the world, but it's still pickled herring and very few Americans will buy it.

    13 million people watched US/England this weekend. Yes, it was Americans. Yes, its the World Cup. Still - Americans don't like soccer, right? And yet they watched it on a Saturday afternoon. Huh. Why don't they prefer the MLS to a World Cup game?

    (Oh, and all the World Cup games have far exceeded MLS ratings. Even South Korea/Greece and its 7:30AM EST start time. Weird.)

    For example, the ratings for ESPN Big East and ACC football on Thursday nights have been growing for years. Is college football The Best? No, the NFL is The Best.

    Oh jesus. Start putting Rutgers/UCONN on at 7:30AM Eastern on Thursdays and see how it does on either coast. You won't get 50,000 people to watch on TV. Not to mention that college football appeals to people in a very direct way that professional soccer in England cannot.

    You are comparing apples and oranges in an attempt to prove something. Soccer games with no Americans in them do better than minor bowl games in college football. Soccer games in tournaments you have probably never heard of (i.e. Confederations Cup) with Americans have scored higher ratings than some major bowl games in college football. What does this prove? Is there something to prove?

    Let's take this from a different angle: If the best american football players in the world gravitated towards, say, Canada - what do you think would happen to the NFL? And in turn, what would happen to professional football? Remember, college football was legitimate as a major sport in the US before the pros were. A barnstorming Red Grange couldn't do change that. Took the 1958 championship game, a merger, and years of impressive marketing and expansion.

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  58. Roggespierre,


    I know this has nothing to do with your topic, but the absolute top level of world-wide formula car road racing was on LIVE on FOX TV on Sunday afternoon from Montreal. The overnights are in....

    A .9 rating. Yep, that's right... America gets a live F1 race, in neighboring Canada, on a major network, with no Indy Car race that weekend and it doesn't even muster a 1 rating. The "World's Best" drivers couldn't get a 1 rating.

    Hey CART/Indy Car dorks...America could give a damn about formula car road racing/street racing. They don't want to watch Indy Cars and they don't want to watch F1. Continuing to emulate a series that America could care less about is beyond STUPID. And yet, Indy Car seems dead-set on ramming more road/street races and fewer and fewer American drivers down our throats and hope it works. Guess what? It ain't.

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  59. I don't understand the amazement at WC soccer ratings. We have millions of immigrants in this country, and many others who have international connections. Add in the wall-to-wall promotion by Coke and other major advertisers, ESPN, Yahoo, etc. Not to mention the push by youth and older soccer leagues. Check out the interest in curling and speed skating every four years, too.

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  60. There should be no surprise at World Cup ratings. It is a major event. People will watch soccer when they deem it to matter - the World Cup being such an occasion. Vuvuzela is a common word at the water cooler, much more so than any open wheel (or hell, NASCAR) driver has been in 15 years. Sure, there's idiots like Glenn Beck who hate the World Cup, largely because we aren't that great at soccer and thus lose, but it sure seems to be a gambit that is paying off for ESPN and ABC, even with low scoring and loud horns.

    The guy above asking why F1 didn't get a higher rating - again. Oranges vs. apples. Heck, we're talking Tangelos vs. Fujis here.

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  61. Okay, it's Father's Day, and today will be hot and muggy here on the East Coast. (Big storms in the Midwest, including Iowa.) Can IndyCar beat an early morning soccer game featuring Paraguay in the ratings today?

    Magic 8 ball says....definite maybe...if the race goes.

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  62. Zero chance it will. Those early AM games have been averaging well over a million viewers.

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