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November 1, 2009
From what you see in pop culture lately, having absolutely zero experience is all the qualification a person needs to give expert advice. That said, here’s my take on what’s going to happen with racing.
It doesn’t matter what form we’re talking about; everything is going to shift this way. Snocross, motocross, hillclimbs, pedal bikes, R/C cars … you name it.
The first thing that’s going to happen is the NASCAR shift. The days of big factory teams taking all the good riders and being the main players on the track are over. The factory chiefs are realizing that (thanks to the recession) you don’t make money racing, you actually lose money. Suzuki Motor has realized this and has considered dropping its factory supercross and motocross teams as soon as this winter. Nobody wants to see that happen, but it’s not a bad thing.
Where’s the Factory Ford team in the NASCAR pits? Factory General Motors? Who is Dodge’s No. 1 factory driver? Nobody. Take a look at a couple of the top drivers. Mark Martin races for Hendrick Motorsports, is sponsored by Carquest and Kellogg’s and happens to drive a Chevrolet. Tony Stewart drives for the Stewart-Haas Racing team which is sponsored by Office Depot and Old Spice and he drives a Chevy, too. Chevrolet is a sponsor and offers race team support, but they leave the weekend work at the track up to the independent race teams.
Motocross is going the same direction. Current AMA supercross champion James Stewart rides for the L&M Racing team (owned by Larry Brooks and Mike Kranyak), which is sponsored by San Manuel and is a Yamaha factory support team (which gives the team parts and support much like Chevy does to its NASCAR teams).
There is money in racing for sponsors (in the form of marketing and promotion). But it is a business. The key to success (aside from signing winning riders and drivers) is to run race teams like businesses, not welfare services. Just like you would start your own restaurant, the race teams of the future will be entrepreneurs starting and owning race teams that seek out their own sponsors and pick up as much factory support in the form of works-style parts and components as they can. Signing the top rider or driver is like picking up Mark Sanchez in the NFL draft—get a winner and half the work is done. But a large presence on the track, in the pits and—most importantly—in the media, is the main objective to turn a profit and run a successful racing business.
Snowmobile racing is headed in that direction, too. Boss Racing, Warnert Racing, Hentges Racing and Judnick Motorsports (among others) are all taking over the responsibilities of showing up and turning in top finishes from the factories. Factory teams still exist, and are still among the top finishers at any event, but the glory days of being a factory star are fading. Factories are in the business of selling snowmobiles and bikes. Instead of absorbing all the costs associated with running the day-to-day operations of a race team, they are switching over to buying sponsorship packages through independent teams (which still sells snowmobiles and bikes).
Now, back to the advice of someone who shouldn’t be giving it: here’s how a pro racer should be paid. Like a salesman on commission, you get a meager base salary and you are paid bonuses on performance, finishes, points earned and championships. In the form of a bonus, you get a certain dollar amount from the race team for each heat race win and each main event win, as well as holeshots and laps led. You still get paid for finishing anywhere from second on down to last, but the amount reflects the position. A season bonus is paid based on points earned, with a big payout for championships. Dominate a weekend, and you leave very wealthy. Be in the mix of the podium battles, and you leave with a big paycheck. Phone it in, and you’ll be delivering pizzas in the off season. Why not just sign riders to big money contracts like football? Because racing is an individual sport, not a team conglomerate effort. Your individual performance can be measured with exactness at each event, and poor finishes can’t be blamed on teammates or play calling. Win, provide marketing exposure for yourself and the team’s sponsors, earn your paycheck and then schedule the parties. The whole idea goes back to the origins of factory contingencies. Win on our stuff, we’ll give you money.
As is common in many forms of professional racing, the team may also take out insurance on you as a rider. If you get injured, the insurance company pays the remainder of your salary and the race team pays the premium on the policy. You might also be insured against a championship. If you win it all, you get the big bonuses, but they are paid out by the insurance company, not the team. The race team pays the premium on the policy, which would be a substantially lower amount of money than the championship bonus.
It’s a whole lot different than the flashy racing styles of the last decade, but it’s a new business market out there. The racing business.
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