New payout system for the IRL

[indycool]

Aeron, I do NOT understand your numbers at all. Your line item of $10 million for handouts to three teams isn't anything I'm familiar with.

This plan is also little different than NASCAR's Winner's Circle plan for teams and is just a boost and alteration of the Leader's Circle plan the IRL patterned after NASCAR's starting five years ago.

The Indianapolis 500 was paying $10-million plus as a purse before and the other IRL races were paying $1 million purses. That's $25 million-plus right there plus the point fund. This is $35 million plus, plus minimal per-race bonus payoffs to the top five plus the point fund.

So, that's roughly $10 million or so over what they were already paying, $3-plus million coming through the Indy purse. Significant, yes. Good for small to midpack teams, yes. Does it allow teams to approach sponsors knowing what it already has to compete and can tailor an appropriate program for a sponsor that will meet his ROI and bang for the buck? Yes.

[ChaimWitz]

Lets do some math really quick:

22 full time cars = $26.4 million
Indy 500 purse = $13.4
Handouts for AGR, TCG and TP (TEAM) = $10.4
Point Fund = $1.625
Total = $51,820,000

That's almost $52 million paid out to teams alone. How much money do you think the IRL is making? In order to pay insurance, taxes, and other overhead costs the league would have to be taking in close to $100 million, and I don't think the league is making half that.

They have to be operating in a deficiet in the hopes of outspending Champ Car enough to bury it in 2008 and be in a stronger position to negotitate deals and attract sponsors.

Thanks Aeron. You answered my question to Sanguin (are you two related?) from another thread about how much the Amigo Posse thinks TG is underwriting. I guess everyone has to have a dream and like the Amigo's repeated assertions to me privately that Honda would be gone once Toyota left the IRL, you and the OWRS owners must still be hanging tough in your hope that TG will bleed out and Champ Car will win through his demise. Good luck with that but forgive me if I no longer follow your 'logic".

So, let's just say "the league is making half that" of the $100 million you mention. That means the IRL is losing a whopping $1.82 million dollars annually on team support, purses and prizes as "They have to be operating in a deficiet in the hopes of outspending Champ Car enough to bury it in 2008 and be in a stronger position to negotitate deals and attract sponsors."

From what I can see so far, this supposedly evil IRL tactic is working while the OWRS owners and management struggle to hold together what cannot amount to even one fifth of the total annual income that you suggest is there for the IRL.

Don't forget the financial might of IMS and the Indy 500, both of which likely still spin off serious profits (which, IMO, will probably improve without the USGP drain). Bottom line is that TG can probably afford to do this for quite some time.

Believe what you will about the Amigos claiming there are no subsidies. There must be or there would not be 17 cars on the grid for most Champ Car races.

So Aeron, since you are so handy with a calculator, would you care to run the income and expense numbers on Champ Car like you have for the IRL? That should provide an interesting comparison. If you do the math, ask yourself this question: just where does all the money come from to make Champ Car tick? Roshfrans? Lexington Energy? iRise? Sherwin Williams? China? Denver? Phoenix? San Jose? The Vegas GP Fueled by Visa? Perhaps Mazda has far more invested in Atlantics that we can all imagine?

Say what you will about the IRL, but they have real income streams from TV rights fees, sanction fees and sponsorships. They also have a brand that most people have heard of and an event that still means something despite the foolishness of The Split. Have you ever tried to explain what Champ Car is to someone while trying to sell them on the series? I have... it is about as much fun as trying to tell them where Assen and Zolder are and why there are only two Americans in the series. Therein lies the story. But I digress...

Will this latest IRL Tony Bucks plan work? Time will tell but IMO the timing could not be better for them or worse for Champ Car since the OWRS owners now seem to be choosing to run their series on a shoestring budget.

In racing, money talks and BS walks. It looks to me like TG is doing the talking the Amigos are doing the walking. In my mind, that is what the TEAM plan is really all about. Like it or not, this plan communicates commitment.

[Aeron Hale]

Also, the question I have is say Champ Car does fold between now and homestead. How does the IRL come with an additional $14.4 million in subsidy payments for the 12 or so teams that would likely go racing in the IRL?

[mark123]

Aeron - we may have to agree to disagree on this.

[Wilf]

Also, the question I have is say Champ Car does fold between now and homestead. How does the IRL come with an additional $14.4 million in subsidy payments for the 12 or so teams that would likely go racing in the IRL?

And the answer is:

"This is an extension of our Leader's Circle program. Historically our Leader's Circle program has been restricted to 24 participants. And I think we will probably at least stick with that to begin with. If we need to adjust, show some flexibility, that would be a good situation to find ourselves in. If we find we have more than 24 cars interested in participating on a full-time basis, I think we would take a look at doing what we need to do. But right now we're anticipating it just being for the 24 Leader's Circle teams."

Brian Barnhardt 10/2/2007

[indycool]

Aeron, I'd still like to know what your line item of "handouts" for three teams -- $10.4 million is.