IndyCar notes from the back of a hotel Napkin

Vacation is a wonderful thing. If you ever have an opportunity to visit Coronado, California, then I strongly suggest that you do it. What a great place!

Scribbles

I am pleased to let you know that the Mario Andretti Honda commercial ran on the local ABC affiliate in San Diego immediately following the Los Angeles Lakers' Game 7 win over the Boston Celtics in the NBA Finals.

Pressdog reports that attendance at Iowa fell this year. Losing 5,000 paying customers is never good news, but is particularly troubling when that amount is equal to more than a 14% year-over-year decrease. The erosion of IndyCar's oval fan base continues unabated, it seems. IndyCar can't blame ISC and its unbundled NASCAR Cup tickets for this one.

That said, a crowd of 35,000 - that's 105,000 in 3-day attendance parlance - at Toronto would likely be hailed as a huge success.

Cranking the Mill

From the rumor mill, I am hearing that Randy Bernard is now consistently turning to Robin Miller for advice. If this is true, then I think it is a troubling turn of events. Bernard is supposed to be a marketing genius, after all.

Full Disclosure - I like Robin Miller very much. He is candid, smart and very entertaining. He has always treated me well personally. Nevertheless, I have vehemently disagreed with Robin regarding certain subjects at various points in time. Regardless, I have never doubted that he genuinely believes in everything that he writes. He also happens to care about the Indianapolis 500 and IndyCar racing more than many of the sport's participants.

That said, Robin is representative of no one but himself. He is not a marketer. He is a nostalgic fan and quasi-insider who, like many of us, yearns for the good old days. The problem is that those who long for a return to glory tend to disagree about the causes and effects of the growth and the subsequent decline of IndyCar racing. Therefore, Robin is no more an authority than any other fan.

Roggespierre

IndyCar Engines on Second Thought

Comments from some of you have led me to rethink my initial position on the IndyCar engine spec announcement for 2012.

I confess that I know very little about the technology that makes Indy cars go. Frankly, technology for its own sake does not interest me. What does interest me - and what I believe is far more important than the spec itself - is technology's impact on three crucial marketing questions.

1. Does it enhance on-track competition?
2. Will it significantly reduce the cost of entry to correspond with the product's market value?
3. Does it increase the probability of adding American drivers who might be more easily sold to U.S. motorsports consumers?

Speedgeek addressed the first point quite persuasively, in my opinion.

Personally, I could see IndyCar allowing 4-cylinder engines and/or engines that come in under 2.4 liters extra boost pressure, a larger air restrictor or extra fuel flow. They kind of left that door open in the announcement... To my mind, this relatively open spec for small displacement turbo engines has been the way to go all along for the 2012 car, and to me it sounds like they're picking the route that will spark the most interest from manufacturers and fans alike.

Citizen John addressed my second and third questions. As usual, he brought relevant facts to the discussion.

Provided they are interested in participating, Mazda is one of few marques who could answer the call for 2012 with an existing product. Their 2.0L MZR-R sports car engine, now in its fourth year of service, already uses alternative fuels... without the restrictor, reaching the stated ceiling of 700 hp would not be an issue.

And my favorite part.

While the 2010 version of an MZR-R lease agreement is still being debated, it could be similar to what MAZDASPEED offered in 2008 and 2009: a three-year lease for one engine, including all electronics and ancillaries, for $60,000 the first year, $50,000 the second and $40,000 the third. With two or three engine rebuilds added in the $35K apiece range, you still walk out the door around the $150K range each year.

The prospect warms my heart.

Therefore, I shall reserve judgment as the circumstances evolve. If Speedgeek and Citizen John are correct, then it could well be that IndyCar is effectively utilizing the 2012 spec to address its ample marketing challenges.

We can hope.

Roggespierre

Honda wins IndyCar Engine Sweepstakes

Wow, that ICONIC committee sure did make quick work of determining the new engine formula for the IndyCar Series.

Make no mistake, today's announcement is a big nod in Honda's direction.

Honda was the only manufacturer that preferred a 6-cylinder motor for the new 2012 spec.

The stipulation that other manufacturers are allowed to compete with smaller engines is meaningless. Honda's monopoly is secure for the foreseeable future.

That Mr. Honda himself, Gentleman Gil de Ferran, was selected to speak for ICONIC only enhances the impression that the fix was in.

This does not bode well for Delta Wing, the only chassis proposal that did not assume that the engine choice would be the Honda V6.

So, when do we get the Dallara announcement?

Roggespierre

Gentleman Gil de Ferran plans 2010 IndyCar Team

The IndyCar Series and the American Le Mans Series are paired this weekend for a road racing extravaganza at Mid-Ohio Sports Car Course. The announcement Friday that 2003 Indianapolis 500 Champion Gil de Ferran will move his team from ALMS to IndyCar in 2010 demonstrates the zero-sum game that racing has become.

Honda's Acura division is rumored to have plans to leave ALMS following the 2009 campaign. The de Ferran announcement is the latest evidence that the LMP era at Don Panoz's outfit is likely coming to an end. De Ferran Motorsports is the unquestioned Acura "works" team, sporting primary sponsorship from Sirius XM, the satellite radio conglomerate that is owned, in part, by Honda. Although Highcroft Racing and Fernandez Racing also run Acuras in ALMS, they have independent primary sponsorship from Tequila Patron and Lowe's, respectively.

The good news is that de Ferran, quintessential gentleman racer, is bringing what will likely be a high quality, two-car team to the Indy Racing League. The bad news, at least from the perspective of high-tech road racing fans in the United States, is that yet another permutation of the sport is on the brink of financial failure. The core problem with the highest levels of ALMS-type racing is that they rely almost completely on investment by auto manufacturers. Unfortunately, the auto industry is highly cyclical, and when the cycle turns downward, as it has for the past 20 months, manufacturers are forced to cut non-essential expenses such as sports car racing.

The writing first appeared on the wall of the ALMS's Georgia headquarters when Audi dropped out of the sport prior to this season. Honda is willing to race alone in the IRL because IndyCar racing is a spectator-supported sport. Although sports car racing does indeed have some very passionate spectators, they are too few in number. In addition, the high-tech aspect of the sport tends to translate into high cost, a fact the IRL must keep in mind as it works toward new technical specifications for the IndyCar Series.

The Republic encourages fans to attend the Mid-Ohio twin bill this weekend. Roggespierre has enjoyed IndyCar races at Michelle Trueman's fine road course in the past and hopes to do so again soon. Next year, Gil de Ferran will return with the Indy cars. Whether or not they are accompanied by the ALMS - and if so, then what kind of ALMS - is another question entirely.

Roggespierre

Menard Interested in IRL Engines

Click the story title above for the link to Bruce Martin's full report on Versus.com.

Among the interesting tidbits, Tony George tells Martin that John Menard has "expressed recent interest" in becoming an IndyCar engine provider in the future.

This is very good news.

Honda is an enigma. It might be an enigma that is a net positive for IndyCar Racing, but that is difficult to determine. Roggespierre invites citizens to consider Honda's various positions in the IndyCar Racing supply chain.

1. It is a supplier to all of the IndyCar teams. We do not have sufficient data to say that Honda profits from its supplier role, but a $1.2 million (Ilmor gets some) engine budget per car per season is enough to turn the cerebral wheels.
2. It is a supplier to the IRL Operations Division. Honda supplies pace cars for all races but Indy. It is doubtful that the IRL actually pays for these cars. The question is whether the deal consists of 100% in-kind compensation or does it include a cash payment from Honda to the IRL?
3. It is a customer (type 1) of the IndyCar Series. It pays the series an undisclosed sum in its role as a series sponsor.
4. It is a customer (type 2) of the IndyCar Series. Honda is promoter of the Motegi race. Does it pay a sanction fee? Does it receive "consideration" due to guarantees that it will supply engines for 33 starters at Indy and all cars that can afford to pay the lease?
5. It is a customer of Andretti Green Promotions. Honda is title sponsor of the AGP races in St. Petersburg and Toronto. The issue of whether this is "new money" or merely a transfer of Honda's previously committed sponsorship dollars from the IRL to AGP is not publicly known.
6. It is a customer of Andretti Green Racing. Honda sponsors Hideki Mutoh's "Formula Dream" entry.
7. It is a customer of IRL broadcast partners ESPN and Versus. Honda buys advertising on the IRL telecasts.
   

Roggespierre's Question of the Day: is Honda's Total IndyCar Project cash-flow positive or cash-flow negative? Danton will not guess for fear of losing his head.

This is wise.

Here's the itemized calculus:

1. $1.2 million * 22 full-time season starters = $26.4 million revenue (one-offs not included)
2. plus value of "Honda" on every engine cover of every car in every race
   
3. less portion of rebuilds completed by Ilmor
4. less Direct Sponsorship payments to IRL
5. less St. Pete & Toronto sponsorship payments to AGP
6. less Formula Dream sponsorship payments to AGR
7. less Sanction Fee & costs incurred due to Motegi
8. less broadcast advertising buy
9. we'll assume that the official cars are in-kind compensation
   

That's quite a package. Is the sum of lines 3 through 9 greater than the sum of lines 1 and 2? Maybe, but the cash infusion to Honda from the teams for spec, mileage-restricted engines reduces the cost of sponsorship considerably.

Roggespierre assumes there must be a reason that HPD honcho Erik Berkman has warmed to the idea of remaining sole engine supplier to the series.

Danton notes that Honda's expenditures on Formula Dream and Motegi add exactly zilch to the Total Package Value for the IndyCar Series. Remember, too, that the IRL , via its TEAMS program, redistributes $1.2 million per season to each full-time entry.

Consider all this - a confounding task, we admit - and one questions whether the league would do better with cheaper engines for the teams, a reduced redistribution of cash to the teams through the TEAMS program, and fewer "revenues" from the engine supplier.

An enigma, indeed. Keep talking, Mr. Menard.

Roggespierre