Friday, February 25, 2011

Another one bites the dust

(crapwagon.com 2-25-11)


Obi-Wan

Now it begins.

Remember last January when Cave-in said:

” Organizing an IndyCar team isn’t as snap-the-fingers as it might seem. It takes time, resources and a commitment that many of these [NASCAR] people aren’t interested, especially given the relatively low rate of return. There aren’t many of the current IndyCar owners making a lot of money at this. Most of them do it because they love the sport and wouldn’t otherwise know what to do with themselves.
Link

In other words, most of the team owners in Gasoline Alley are pursuing the sport “they love” as a hobby. And unless you’re crazy you don’t jeopardize your house and mortgage on account of your hobby.

Obviously, Gil de Ferran, Baby Pimpski and Steve Luzco aren’t crazy. As Gil said:

“Believe me, we looked at every scenario available, half a season, Indy, some races near the end but I couldn’t build a case for it,” he said.

Consequently, every team owner in the ICS paddock, save the Pimp man himself, will accommodate ride buyers. Did I say, accommodate? How about welcome with open arms and a champagne celebration.

Thus it doesn’t pay, literally, to be a team owner in the New Age IndyCar Series.

However, somebody has got to pay or there is no show. Until two years ago it was the Idiot Grandson, using Mommy’s checkbook. Then Mommy took it away from him and handed it to the family’s resident bean-counter (Belskus), who still paid for the show by writing checks; but for only half as much.

Two years ago. That’s when the IRL became a hobby for team owners who “wouldn’t otherwise know what to do with themselves.”

The fatal flaw in the makeup of the ICS can be summed up by a piece of advice once offered by Clinton campaign strategist James Carville to ex-president G.H.W. Bush: “It’s the economy, stupid.”

Meaning, the economy within the ICS no longer makes sense for anyone; including its owners, its sponsors, its team owners and its would-be drivers.

It’s now that last group, the would-be drivers, who are largely expected to carry the weight of financing the entire series. That’s what the sad saga of Tony “The Toucan” Kanaan demonstrates. According to Tony, a former IRL champion more or less in his prime, he tried 88 separate meetings with potential sponsors with not one taker. The last fund-raising confabs took place in his native Brazil, where nationalism and patriotism were probably talking points as well. The result was not one centavo for Indy but a bona fide offer to drive stock cars in Brazil’s home-grown series where the sponsors could see some return on their investment.

And that’s the key. If one approaches auto racing as a business and not a hobby, there has to be some return – or the promise of a return – on one’s investment or it’s a no go.

In the history of the sport there have been a few wealthy drivers who pursued it as a hobby but most of today’s “professional” drivers can’t be counted among them. Nowadays an up-and-coming driver races on someone else’s dime (usually from sponsors) after he/she has more or less exhausted every ounce of the wealth available to them. Most drivers starting out are fortunate to break even and most work (drive) for less than nothing. Why? Well, they get to do something they enjoy but most of them also hope there’s going to be a big payday down the road if they’re good enough at their job and they catch some breaks.

The Toucan was lucky enough to come up in the sport at a time when its economics made sense for those investing in the sport. Consequently, after many years toiling in ladder series and then paying his dues in the big leagues, the Toucan got himself a $3 million a year contract to drive Indycars. Actually, it is said that that is something of a pay cut from the salary he got for turning coat on CART; when according to rumor he and Mr. Judd were paid $5 million a year for their services.

As the Toucan himself admits, he wasn’t paying much attention to the bottom line as the economy in the ICS went to hell in a handbag. Tony says, “I had never been on that side before and now I know how fortunate I’ve been all this time to have a good deal.”


Or as Joni Mitchell said about Paradise: ”That you don't know what you've got. Till it's gone.”

The Toucan had a three-year contract with the Andrettis worth $9 million. Only it wasn’t worth $9 million to the Lesser Andretti and Da-Da. So they asked the Toucan to take a pay cut and Tony (and/or his agent) refused; so they made use of the buy-out clause and sent the Toucan in search of a ride. Right about now I’m guessing he wished he took the pay cut.

Be that as it may, the Andrettis pere et fil aren’t involved in racing as a hobby and they’ve got a pretty good idea of what to do with themselves, so their involvement with the sport is strictly business, not personal. Nowadays, with the screwed-up economy in the ICS, that means they require ride buyers to pay their bills or they will close up shop and cut their losses.

Which returns us to the reality of the sport being financed by would-be drivers. Today there is no golden future on the horizon for even the best Indycar driver; that’s just a fact. If you want to get rich driving a racecar, you’d better get good at driving stock cars; the average full-time Cup driver’s salary is said to be around $15 million annually not counting lucrative personal endorsement and merchandise income.

Moreover, the Road to Indy leads nowhere else. Formula One team owners ignore Indycar drivers completely, if they even notice them at all. And all the Indycar champions, real or imagined, who bombed in their attempts to segue into stock cars – Montoya, Franchitti, Hornish, Almendinger, etc. – make Gasoline Alley a poor recruiting ground for Cup drivers. The only current drivers who have been able to parlay their Indycar experience into sponsorship and full-time rides in other series have done so based on their gender and not their driving talent. Which is why the distaff half are almost the only new drivers able to find sponsorship in the ICS and the reason that for the last five years the count of female drivers in the Indy 500 continues to increase. Male drivers for the most part are flat out of future prospects and luck, as the Toucan just discovered.

It should be instructive that Tony’s contract with de Ferran Dragon, signed in December, was completely contingent on his buying his seat. No doubt Baby Pimp wanted to look good to The Captain with his own successful team but he wouldn’t have earned the respect of the Old Man if he used his own money in pursuit of his goal. Racing is his father’s business and one assumes he expects his sons to treat it as such also. Unfortunately for the Toucan, Baby P didn’t have his father’s ability to leverage business-to-business deals into part-time sponsorship of his team. So BP’s in the same no-win position with potential sponsors as the owners of the Coyne, Conquest, Newman Haas, Dreyer & Reinbold, KV and Foyt teams.

The new reality was reflected in a question & answer exchange between Cave-in and a Gomer with rose-colored glasses:

Quote:

Question: With 2011 being the last season for the current car package, would it be easier (cheaper) for one off teams to attempt Indy? What drivers/teams are looking at doing that? Would love to see 36+ attempt Indy to make bump day interesting. (Mike, Wendell, N.C.)

Cave-in: It should be cheaper, especially for the races after Indy, but I’m not sure it will be easier. There won’t be a lot of new parts made for this season due to the equipment change. And there still isn’t an excess of sponsors for these programs. I can’t give you a list at this point, but I expect it to be north of 36, although not by much.

That’s a good summary, IMO: “cheaper but not easier.” Next year, it isn’t going to be cheaper and there’s no reason to believe that it will get any easier.

RIP IRL.

Oh, and FTG.

JMO


Indy

I would add to what you said, Obi, that the reason for all of this is that Tony George created a product that no one wanted. There is no sponsorship because there are no fans, and there are no fans because of the evil nature of the League and because it just plain sucks. It's like if you owned a restaurant and you served lousy food until no one in town came to eat there anymore, and you went to your neighbors and complained that people just weren't willing to pay restaurant prices anymore.


Scorpion

In part what I think you're saying Obi, is that when the crop of ride buyers finally realize there is no future in .irling, that they as a source of funding for the series will dry up, and that unless the H-G's reopen the check book in a major way, the series will be completely toasted and done.

Given the greater expenses of new chassis, aero kits, and motors for 2012, I would expect there will be fewer drivers with the funds and willingness to spend them.

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