When people discuss the “costs” of racing, an outsider might assume the core of a race team’s ledger may come in the acquisition of the car, or spares, or wildly sophisticated technologies required to keep a team at the cutting edge… and in many ways they’re correct. However, at the base of all this is one massively expensive piece of the puzzle: the staff.
Technology, data, equipment, etc. is only as good as the people who can operate it, and with every nuance that a team invests in, be assured there is always a new requirement on the human element as well.
In the business of racing, there is one wildly varying element to how this is handled: to salary employees vs. hiring people as contractors.
Just days before this year’s United States Grand Prix began its first practice session , the financially troubled Caterham F1 team, who had recently gone in to administration (the U.S. equivalent would be bankruptcy, though it is different in how it works), announced it would not be able to make the journey to Texas. Hours later, the similarly maligned Marussia F1 Team would announce the same.
Thus, the controversy begins…
With two teams officially closing their doors and a number of midfield teams in very serious jeopardy, the controversy of F1 being “too expensive” is at the forefront of the conversation…. again.
The heart of the controversy lies at the distribution of F1 income. The business of Formula One, despite its challenges, is incredibly profitable. Since 2004, the various managing properties have earned over $1 billion in total revenue, and then moving the bar above $1.5 billion since 2011. This is the revenue directly related to the commercial management of the series, run by the Formula One Group, which is technically owned by a consortium of investing and holding companies, the largest of which is CVC Capital. At the helm of this is the legendary Bernie Ecclestone, who has run the commercial rights of Formula One since 1980, spending four decades in to building the most successful form of motorsport in the world.
The National Football League (NFL), easily the highest rated form of sport in the U.S., has always been an interesting source of discussion among motorsports decision makers when outlining their season plans.
Inevitably, as a racing season enters the Fall, where championship stakes are at their highest, television ratings typically begin to decline. The easiest attributable reason? Football season.
It’s a tough nut to crack, and with the NFL’s continual growth, all of the major U.S. forms of motorsport have taken different approaches to counter this.
NASCAR’s answer to the NFL began in 2004 with the creation of “The Chase” playoff format, in which the top-10 drivers (and then 12 several years later ) would be locked in to their own form of a playoff for the final 10 races, conveniently when football season began. This year, NASCAR has gone even further with this strategy, creating an elimination-based top-16 playoff, in which four drivers are removed from contention every three races, with four drivers battling it out for the finale in Homestead, Florida.
When Adam Parr, the former Chairman at WilliamsF1 put out a tweet on Sunday morning suggesting that Formula 1 would increase to three-car teams in desperation to keep the series healthy, a flurry of internet posts and social media speculation hit the motorsport scene like wildfire.
With 11 teams entering a mandatory two-car lineup, the current state of Formula 1 currently rides in a tricky balance of measuring the sport’s heritage vs. the sport’s need to look forward.
The current challenge is that quite a few teams currently in Formula 1 are on the rumored brink of closure. Allegedly on life support, the teams of Marussia, Caterham, and Sauber have been incurring very public battles with their financing and desires to be bought out, meanwhile teams like Lotus and Force India continue to be vocal about their challenges to sustain the current operational costs of Formula 1.
On the optimistic side, we will likely have two less teams in 2015, and on the pessimistic side we could lose up to five. Doing the math, this could conceivably leave us with grids of 12 cars, which would be a disaster for the sport.
One could easily argue that the world of professional motorsports, as it stands now, is over saturated.
When you think of professional football, what sanctioning do you think of?
When you think of professional basketball, what sanctioning do you think of?
When you think of professional racing, what sanctioning do you think of?
NASCAR, Formula 1, WEC, IMSA, IndyCar, World Challenge, MotoGP, AMA, WRC, Blancpain Endurance, DTM… and so on.
See the point?
The motorsports landscape is as saturated as it is complex, and this in many ways presents a fundamental problem for media, fans, and sponsors alike. The reciprocal issue comes from the fact that this is a complication CREATED by media, fans, and sponsors alike. Since the automobile presents such a diversity of clientele, the diversity of racing endeavors that springs from it is a natural evolution. Whether it’s a company like Ferrari or McLaren who invest heavily in to Formula 1 due to its heritage as the premier World Championship, or Audi who prefers the open technology platform that the WEC provides, or a company like Chevrolet who prefers the mass appeal among Americans that you get with NASCAR.
NASCAR’s annual “Sprint All-Star Race” is one of the more interesting fan involved events run all year. Acting as a sort of mid-season break similar to the all-star weeks you’ll see in the NBA or MLB, NASCAR’s answer to this is to run a week long series of celebrations in honor of the sport, including the annual pit stop competition, NASCAR Hall of Fame inductions, and all culminating in he annual all-star race at Charlotte Motor Speedway.
The “all-star” race is a very different venue than the traditional NASCAR race. As opposed to 43 cars battling for hundreds of miles in search of victories and championship points, this race is not considered part of the season-long championship, but instead a one-off “fun” race. Considered a throwback to short-track races seen around the country, the event is run as a series of heat races, with the only drivers automatically qualifying for the “feature” event being ones who’ve won races in the previous 12 months, or former all-star winners. For racers who do not automatically qualify, NASCAR also runs a “showdown” race, a qualification round in which the winner advances to the main event.
There is, however, one additional way to qualify for the feature event, the fan vote. In an effort to keep fans involved in the week’s actions, Sprint and NASCAR run a fan poll in which fans can vote for their favorite driver who is not already in the feature event.