The Business of Motorsport: School Me Please

[Geneman]

Hello Peeps,

I have been meaning to ask for some direction on this topic for awhile. Rolex 24 jogged my aging mind again..so here it is.. ( back ground is that even though i have been an avid Motorsports fan for 45 years I know nothing about how it is run )

How do these teams ..for instance, the 4 driver teams for R24 get assembled, paid etc.? It seems that most of the drivers are not signed to these teams for the full grand am season correct.? this goes pretty much any of the classes setting GX aside which , i guess , is total amatuer racing ? ( even though Donohue is clearly not an amateur) .

So , do the drivers bring their own personal sponsorship to the teams, and thereby get a ride?

Does the team of drivers that is setup participate as a group to elicit sponsorship for the car or the one off D24 race?

Does a big name like gannassi simply hire the best he can get and pay them for the one off event?

Are the drivers hired that far in advance that they participate in the development of the car..or are they pretty much arrive and drive.. whether they are being paid, bringing sponsorship , or are rich and paying for the seat themselves..

It seems that those are the three scenarios for doing this...

1. Be a big name driver and get paid irrespective of whether you have individual sponsorship , (if that is the case, for instance was it arranged up front (even contractually ) that if Gannassi cars were in contention at the end, that JPM would get the final stint .. because he is the biggest fish?).

2. Bring your own sponsorship money hence get a ride

3. Pay for it yourself and buy the ride. or be a car owner and foot the bill yourself for the whole team )

If teams are paying for talent for the one off D24.. what do these drivers get paid? is it big bucks?

These Qs are particularly relevant when there is no factory involvement ..like Porsche this year. Every Pcar run was an independent correct? So no deep pocket factory to pay for the drivers correct? Is the drivers fee/expense, the biggest part of it or , small compared to the overall budget for the team?

Can a anyone point me to a book or writeup on the business of Motorsport .. how is a team run, sponsorship obtained , profit sharing (nascar style?) , series input to teams etc?

I assume this happens in F1 where some teams are supported by Series income correct? (Bernie dolling it out like scrooge to the best grovelers? or is there a strict formula for support?)

All a mystery to me

Thanks very much.

Frank

[URY914]

Very few drivers in the D-24 get paid to drive. MOST pay the owner to drive. You have a check and you get the seat time.

The big name drivers (IndyCar and NASCAR) guys in the race get paid but it is probably a part of thier larger contract with the team owner like Ganassi who they race for in the other series. Bonus paid if you win.

[Geneman]

thanks paul!

[stealthn]

I had a friend (passed) who owned a Porsche garage here, he drove for one of the Porsche teams and also did Nascar testing. He told me about the huge difference in the series of racing, how there is so much politics and things the drivers must do in the ALMS/Rolex, there is as much to do outside the car as inside. He Nascar was completely different, the driver is expected to get in the car and drive, that's it. They are shielded from much of the red tape and BS.

I miss those conversations....

[tevake]

Interesting! I know that in F1 the top drivers get well paid. Then as you go down the field the cost to the driver goes up. with the back markers bring millions to the team. some of it sponsor derived, some personal/family monies.
It is assumed that the ones bringing ***** loads of cash also have the talent, but that has seemed questionable at times.

Some teams (in red livery) have continued paying EX drivers millions for years to keep them out of compeditors cars

Cheers Richard

[Dueller]

Have a friend who is grooming himself for his bucket list of driving in the Daytona 24. His "development" program has been BMWCCA/NASA club racing, gearing up for a full season of Barber open wheel series (Bae price about $40K for 8-12 weekends).

Then he will get national comp license. He ha been quoted an appoximate price of $120K for a seat on mid level poduction class race team. For JUST the Daytona 24.

All it takes is rectangular dollars.

[Geneman]

Wow fantastic keep the comments coming if anyone can chime in Its fascintaing to learn how this all works thanks guys Frank

[onewhippedpuppy]

Originally Posted by Dueller

All it takes is rectangular dollars.

A few years ago Car & Driver had a really good article that followed the rise of several drivers up through different forms of racing, I believe one was dirt and the other sports car. It was simply staggering the amount of money and commitment that was required, starting way back when they were kids. Even with the substantial investment the odds were drastically against them ever racing professionally.

[Venetian]

This is a great topic....really have no idea how it all works. I see the Alex Job team is now Audi. Was it not Porsche at one time? Where does all the money come from to support a team like this? What about Patrick Long.....is he still a Porsche factory driver and who decides what team he drives on? Anybody know what he would get paid? Job security for him must be measured in wins?

[URY914]

Patrick Long has the best job in the world. I'm sure he has a very complicated contract about what/who he can drive.

If a car owner has a sponsor and the sponsor wants to have a winning car the owner of the team says we need fast drivers. The sponsor starts writing checks and if they are running a P-car they ask if they can "borrow" (hire) Patrick for the weekend.

[Aragorn]

The way I understood it used to work for drivers like Randy Pobst was they made so much per race (something like $8,000.00 for a World Challenge race. Don't quote me on that figure, just something I remember reading.) For some races I understood he would sit around and wait on the call and then get a percentage of the race purse based on the finish.

The higher up the ladder you go, the more the driver makes. F1 drivers get anywhere from $250k to $8mill a year for a front row team. Some drivers have to pay backmarker teams though sponsership deals they bring to the team for a seat. The hope is they do so well that a front row team will pay them a salary.

Most of the Drivers at the back of the field of ALMS and Rolex races are Gentleman Racers. They own their own business and pay teams for seat time (they also are responsible for damage to the car in some cases.) Think of the Indy 500 a few years ago when a dentist sponsered by Crest made the field. Not professionals but still have talent and get to race against the likes of Mcnish and Biela.

[URY914]

Originally Posted by Aragorn

..... get to race against the likes of Mcnish and Biela.

"Race against" is a bit too strong. They mostly get in the way of Mcnish and Biela.

[Aragorn]

Originally Posted by URY914

"Race against" is a bit too strong. They mostly get in the way of Mcnish and Biela.

Thats what the chrome horn is for.

[kevin993]

A little dated, but mandatory reading that will provide some good context and background info--

The cost of racing - parts 1 -4:

lastturnclub.com

lastturnclub.com

lastturnclub.com

lastturnclub.com

Paying for Racing - parts 1-2:

lastturnclub.com

lastturnclub.com

Operating Revenue and Costs of the ALMS and IMSA - Parts 1-3:

lastturnclub.com

lastturnclub.com

lastturnclub.com

[intakexhaust]

Originally Posted by Venetian

This is a great topic....really have no idea how it all works. I see the Alex Job team is now Audi. Was it not Porsche at one time? Where does all the money come from to support a team like this? What about Patrick Long.....is he still a Porsche factory driver and who decides what team he drives on? Anybody know what he would get paid? Job security for him must be measured in wins?

Still campaign with Porsche. They also ran an Audi finished 9th overall 1st in class. Both in GT, MacNeil mats on the doors with son Cooper on the Porsche team finishing 6th overall 14th.

There's been some lower budget teams quite efficient. Bring the money and its buy a ride. Endurance racing is fascinating. Brutal how hard they run 100% every minute, strategy and just to survive to the end.

Edit... blurrrry eyed....

[TimT]

"If you want to make a little money racing....... You need to start with a lot!!!"

Or something to that effect...

A friend of mine is a very talented driver wins in club racing etc.... Got a to test for a seat in one of the top GT cars a few years ago... a team that won Lemans and some other big races....With more time with the team he could have got the seat.....he could keep lap times close enough to the pros that he would have been able to co-drive one of the teams cars..

He couldn't afford to... a seat at that time was in the 75K neighborhood

What we do now is probably crazier.... club racing.... spend lots of money and have no chance of winning a Rolex...

[Geneman]

Kevin and all thanks for those links.its really amazing and eye opening how, even in the best of times...the whole deal seems to be a loosing proposition for the teams ( i could not open the links on the finances of the series..so maybe they are making all the money).

But nonetheless, based on these writeups, it seems to me that it is very common and complete mis-perception by the general public that there is ALOT of money to be made by both teams and drivers , even at the very highest levels of american sports car racing . it just ain't so.

seems like these guys live hand to mouth every season even with the vaunted "factory backing" The lizards is the best example ..."full factory backing" yet they are still selling every trinket possible except logo soap to make ends meet....and even then they get unceremoniously booted at the end of the season ..

maybe the whole business model for nascar is different ... i have heard that for every car (or team) , they have 3 or 4 primary sponsors just waiting for their chance to write the big check and slap their logos on the sides... and that the series itself is (nascar inc) plays a huge role in lining up these sponsors for the teams . is this true? seems like a better way to do things ..at least on some levels..

is the fan base in ncrap and the fact that they can pack so many more fans into every race/event the primary driver of these finances ( which no sportscar racing can match even remotely match..) or is it tv revenue..

just a thought

thanks again frank

[herr_oberst]

Originally Posted by Aragorn

T
The higher up the ladder you go, the more the driver makes. F1 drivers get anywhere from $250k to $8mill a year for a front row team. Some drivers have to pay backmarker teams though sponsership deals they bring to the team for a seat. The hope is they do so well that a front row team will pay them a salary.

Better add a few zeros!

2012 driver salaries (in Euro, today, 01-28-2013 1 euro is equal to $1.35)

1. Fernando Alonso Ferrari €30m
2. Lewis Hamilton McLaren-Mercedes €16m
= Jenson Button McLaren-Mercedes €16m
4. Sebastian Vettel Red Bull Racing €10m
= Mark Webber Red Bull Racing €10m
= Felipe Massa Ferrari €10m
= Nico Rosberg Mercedes €10m
8. Michael Schumacher Mercedes €8m
9. Kimi Raikkonen Lotus F1 Team €5m
10. Heikki Kovalainen Caterham F1 Team €4m
11. Timo Glock Marussia F1 Team €3m
12. Kamui Kobayashi Sauber €1m
= Romain Grosjean Lotus F1 Team €1m
14. Nico Hulkenberg Force India F1 €500,000
= Sergio Perez Sauber €500,000
= Vitaly Petrov Caterham F1 Team €500,000
= Pedro de la Rosa HRT €500,000
18. Pastor Maldonado Williams €400,000
= Daniel Ricciardo Scuderia Toro Rosso €400,000
= Jean-Eric Vergne Scuderia Toro Rosso €400,000
21. Bruno Senna Williams €250,000
= Narain Karthikeyan HRT €250,000
23. Paul di Resta Force India F1 €200,000
24. Charles Pic Marussia €150,000

(I'm really not sure how the backmarkers' salaries are calculated, a lot of the bottom half team drivers are bringing cash - perhaps part of the deal is that they get a stipend out of the sponsorship?)

Sergio looks to increase his salary as he'll go to McLaren - Mercedes, and Lewis jumps ship to the hapless Mercedes factory team for a larger paycheck.

[VaSteve]

Originally Posted by stealthn

I had a friend (passed) who owned a Porsche garage here, he drove for one of the Porsche teams and also did Nascar testing. He told me about the huge difference in the series of racing, how there is so much politics and things the drivers must do in the ALMS/Rolex, there is as much to do outside the car as inside. He Nascar was completely different, the driver is expected to get in the car and drive, that's it. They are shielded from much of the red tape and BS.

I miss those conversations....

OK I wi ll admit I'm a NASCAR fan. The drivers have to do a TON of promotional **** in between races, during race weekends they are scheduled all over the track, dropping in on hospitality tents and stuff, I think they are quite busy, Every team is obviously different.

NASCAR is also hurting for funds. Track owners teams. Etc. some teams aren't coming back this year since they cars are all different.


for Rolex, I read that Brumos didn't have a full season planned and were advertising for sponsors in the WSJ. Wow.

[stealthn]

No they all have to do that, I was just trying to get the point across about difference in the politics of racing, Nascar it's handled at a higher level and somewhat sheilded from the drivers (unless they are team owners), whereas other motorsports the drivers are right in with the crap/politics.