Interesting Story About Race Team

[Ron Sutton]

There is an interesting story (to me anyway) about a race team losing a million dollars a year in this current market. Most of you may want to stop reading, as it is of little interest for most people not in professional racing. Of course I found it interesting ... because I was in a similar situation two years ago (2012). I say similar, because my 9 race teams ran in lower ranks of racing on a regional level (4 states on the West Coast) ... and my operating budget was much lower than the team in the story.

To run all 9 of my race teams (6 USAC Midgets & 3 NASCAR Modifieds) competitively, took $1.75 million a year. When we had this revenue (primarily through sponsors) as in 2010, we won 24 races & made money. The next year (2011) when we had 3/4 of that budget ... we won 18 races. That year I spent only a little less ... so I lost $250k. Two years later, when we had half that $1.75m amount & cut deep on all expenses ... staff, overhead, operational, R&D ... we only won 3 races ... and I still lost $150k.

That is when it stopped being fun for me & I sold all my teams, rigs, retail inventory (Oval Racing Parts Store), etc. The challenge is not how do you cut back expenses & carry on. All good businesses do that as the market ebbs & flows. The challenge is to perform at the same high level with half the budget. Like Brad says in his story, he's not interested in doing it if they can't win. Neither was I. This economy challenge is effecting professional race teams everywhere ... big & small ... but you don't often read about it. You can read Brad Kesoloski's story about his NASCAR Truck Team HERE (http://www.mrn.com/Race-Series/NASCAR-Camping-World-Trucks/News/Articles/2014/12/Brad-Keselowski-Racing-Loses-One-Million-Dollars.aspx?utm_content=buffer63429&utm_medium=social&utm_source=facebook.com&utm_campaign=buffer).

P.S. Please don't think I'm complaining. I loved my time racing & winning with our young development drivers. You can read what some of them said recently on Facebook HERE (https://www.facebook.com/ron.sutton.148)& HERE (https://www.facebook.com/JessicaClarkRacing?pnref=story). And I love what I'm doing today helping car guys with their ProTouring projects, autocross & track cars ... plus a few race teams.

P.P.S. A funny coincidence is Brad Kesolowki's old Busch/Nationwide crew chief (from when he ran on a low funded Chevy team) worked for me in the 2010 year I mentioned above.

:cheers:




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[BMR Sales]

Nobody said Racing was Cheap!

[rchaskin]

Ive always heard the quickest way to make a million in racing, is to start with two!!

[vintageracer]

Sponsorship!

The bane of the racing business.

Without it you can't race competitively unless you personally have deep pockets and with sponsorship you may or may not be competitive depending upon your amount of your sponsorship. EVERY sponsor wants to be with a winner. There are only so many winners and that's who all the "big buck" sponsors want to be with. Can't say I blame them!

As a sponsor in racing how do you measure the success or lack thereof in the spending of your "sponsorship" money? Does having "Jimmy" drive the Lowe's car make me want to only go to Lowe's for all my home improvement? NO! Same with the Home Depot car? NO! How about Danica and her "Peak" sponsorship? Does that make me want to buy Peak antifreeze? Sure if I need antifreeze and it's on sale cheaper than the other brands!

Sponsorship and advertising makes "Me" aware of a product. Sponsorship does NOT make me specifically buy that product. For "Me" it's all about product/service price, condition, performance, warranty, availability, country of manufacture and a few dozen other factors.

There are certainly products and services that are better associated with racing than other products. "Extenze" and "Smiling Bob" come to mind and their sponsorship of a recent race. Sex and racing sells great with the rednecks in the infield! Bud and Miller help "Smiling Bob" extend his reach during and after the race so that product association also is a given.

Some of the recent NASCAR race sponsors make no sense to me. How the sponsor thinks their product will relate to and be a big hit with the race fans is beyond me. Since NASCAR seems to be scraping to the bottom of barrel for some of their race sponsors that means numerous issues may be happening in the racing business. It's getting really cheap to sponsor a race, the "pazazz" of NASCAR is totally gone and sponsors see better outlets for advertising or maybe the only expectation a new NASCAR sponsor has is to get nationwide television recognition quickly with an increasingly smaller audience. Lord knows NASCAR is still ALL ABOUT "Pippin the Sponsor"!

Racing IS expensive and somebody has to pay the bill. It seems to me one might be better off incorporating their racing team as 503B charity to get all the benefits and start collecting DONATIONS instead of sponsorship's. Since I see so many news reports about how little these "Charities" actually donate to the cause they support (sometimes as little as 5%) it seems to me that this would be a good model for race team. Coming up with expenses upon which to spend the charitable donations in the pursuit of the Charities Charter ought to be damn easy and still leave a little bit for "Charity and the Cause".

This might actually work!!!

[NJSPEEDER]

Sponsorship cuts both ways in my mind. While it is a gigantic PITA because it pushing spending and gives mediocre drivers the ability to buy their way into rides others deserve more based on talent it is also the thing that lets the big time racing we all like to watch happen.

My biggest gripe about sponsors is the way it has neutered so many of the personalities in racing. So many of the great drivers in history were complete a-holes and wouldn't get the least bit of interest from 99.9% of the money out there. The result is the predictable, canned, pointless interviews that we see all the time. I for one would rather see the emotion of type A personalities come out the way it does in the local levels, saturday night short track style, where more disputes are settled with shoving and yelling followed by beers than with stewards inquiries and whiney tweets.

-Tim