Is it time to consider more cost reductions?

[Lucky161]

Wasn't too much complaining when they reigned in the horsepower by cutting displacement or the lowering of the rev limits. So with all the qualified drivers not having solid rides this late is it out of line to consider lowering the costs some more as well? Of course a lot of what we hear on this board is just rumor, there is probably some truths scattered in. If the series is having trouble bearing the costs as they are now, wouldn't lower cost help? And a related issue is how they are going to keep the factories from spending money like it grows on trees? If the Infiniti is strong now, who believe that GM will just say ok, they have an edge on us now and let it go? When Toyota comes in the mix, how can that be better for the IRL and for the racing? We already see the results of the chassis. Dallara is the top choice, followed not terribly far behind by GForce, but R&S is off the map. What would a R&S sell for today if you could even sell it. So the factories either have to step it up or give it up. Neither is a good thing in my book. I am sure some will suggest stepping it up to be a good thing, but if Chevy or anyone else spends $250K on each engine in a series that has a $80K cap(soft cap if you will) on engine cost, what would keep Toyota from spending $300K and then Infiniti $400K. Eventually someone will bow out and and it will be up to the teams to buy their own engines. Does anyone remember CART's problems?
I am not suggesting drastic reductions, just something that keeps from reminding me about the former series than ran Indy cars.

[slinger]

I don't see how you can keep manufacturers from selling at a loss.Frankly,I'd be happy if the manufacturers eased themselves out and were replaced by people whose primary business was racing,like Drake used to be.

Lucky,I think you and I are the only people left who think it's important to lower costs.

[Mackie]

"You always spend all the money you have," Tim Cindric from the Penske press conferance at Fontana!

[Dr. Austin]

Originally posted by Mackie:
<STRONG>"You always spend all the money you have," Tim Cindric from the Penske press conferance at Fontana!</STRONG>

but how do you spend all of an unlimited budget?

[cornutt]

Originally posted by slinger:
<STRONG>
Lucky,I think you and I are the only people left who think it's important to lower costs. </STRONG>

Make that three, at least. As far as I'm concerned, it's always time to consider cost reductions. I might disagree with you guys on what to attack, but I don't disagree that cost control is essential to any racing series these days (even Winston Cup is starting to find this out).

Speaking of Winston Cup, I notice that they have adopted a one-engine rule this year, that requires cars to race with the same engine they qualified with. I'm going to be watching to see how that works out, because it's been one of my pet crusades for a while now. Recall that the IRL came close to instituting such a rule last year but pulled back at the last minute.

[rrrr]

Originally posted by slinger:
<STRONG>I don't see how you can keep manufacturers from selling at a loss.Frankly,I'd be happy if the manufacturers eased themselves out and were replaced by people whose primary business was racing,like Drake used to be.

Lucky,I think you and I are the only people left who think it's important to lower costs. </STRONG>

Time to clear the room, Slinger!

[CamKing]

IMO, engine costs are low enough!!!!!!!!!

Some of us have bills to pay.

[tom91]

I think the cost-reduction this year took the form of the Leaders' Circle Program, and this will expand in the future.

Instead of capping engine and chassis costs, which makes manufacturers unhappy, the IRL is signing up businesses to pay kickbacks to IRL teams in exchange for publicity. This reduces team budgets while allowing Chevy and Nissan to maximize their profits. In short, as they say in Vegas... "EVERYBODY WINS!"

Of course, there are several downsides to this arrangement, which I'm sure we'll soon hear about from the resident IRL slaggers. But it's a pretty good idea on the whole.

[Lucky161]

I think the Leaders Circle is a good plan, but is it enough? If it is why is AUJ shopping for a ride? Why are we hearing that Sarah wont make the first two races? Where is a ride for Dismore or John Paul Jr. That's three drivers with wins and one with a second and they aren't on the full schedule or in some cases on the schedule at all. Where is the next Billy Boat? And before anyone gets on me, I think that Cheever made a good decision signing T.S. I am not really ready to push the panic button, but I do think something should be done to keep from having to do that down the road.
And CamKing, cams should only be restricted at the point of you having TOO MUCH work!

[Whoosh]

Cost cutting is a fallacy. NASCAR has more cost cutting regulations than any major racing series on the planet, yet the budgets of their top teams are astronomical, regularly topping both IRL and CART budgets.

Splitting Indy car in half has been what has hurt it, the sponsors have moved away, and now have to be cajoled back. Doesn't matter if you go out and race Chevy Cavaliers with the fenders off -- racing teams will spend all they have and try to spend more.

Why should they bother? They get much better exposure on the taxicabs, with a bigger billboard, racing every weekend and a fantastic tv contract on Fox and NBC.

Indy car will still take several years to get back to where it was in the early 90's, if it ever does. "Cutting costs" is foolish, surely the events of the past six years is ample evidence that it is a foolhardy pursuit.

The "cost control" of any given racing series, whether hobby stocks or F-1, is set by the sponsors, based upon what they decide, in declining order, what a championship, a win, or participation is worth for that series.

Sponsors will spend whatever it takes to achieve what they believe is the perceived value in that series. Currently, and for the last two decades, in the U.S., the Major League series is NASCAR.

Indy car is perceived as being damaged goods because of their self inflicted wounds, and sponsors spend accordingly.

[Fueler]

but how do you spend all of an unlimited budget?

1) Ask my girlfriend. She's been doing it for years.

2) Go racing. Any kind of racing.

[JoeBob]

If the cost of the IRL is too high, it might be time to consider the new Infiniti Pro Series. If the cost of that is too high, call USAC or Skip Barber. If that cost is too high, call your local track and find out about their weekly series. If it still costs too much, try your local karting center. If that costs too much, buy yourself a PlayStation. If that costs too much, buy yourself some Hot Wheels cars and pretend.

The problem isn't cost, the problem is finding people to pay the bills. The cost of winning will always be $1 more than the next guy is willing to spend. A team needs to look at the money available, and decide if it wants to run in the back of an expensive series, or in the front of a less expensive series.

F1 really shows that if you can provide enough ROI to a sponsor, they'll hand over more money than you can even imagine. Whether you have $5, $500, or $500,000,000 to spend, there is currently a place where you can race. The IRL's problem isn't its cost, it is finding people who see value in spending the money.

[mnkywrch]

The problem is there's only enough QUALITY teams for one open wheel racing series. If you split NASCAR in two you'd have the exact same problem. You'd have some good teams, but you'd have a lot of teams who should be in BGN and the CTS.

Same way with open wheel.

As far as cost reductions, I'd worry more about how the 2003 motors need to be smaller in displacement than 3.5 liters... and how the IRL cars are so easy to drive than kart drivers (granted, good kart drivers, but c'mon) can get in them and not embarass themselves.

2.5 liter motors with a higher rev limit, and cars with less mandated downforce.

[ February 14, 2002: Message edited by: mnkywrch ]

[cornutt]

Originally posted by JoeBob:
<STRONG>
F1 really shows that if you can provide enough ROI to a sponsor, they'll hand over more money than you can even imagine. Whether you have $5, $500, or $500,000,000 to spend, there is currently a place where you can race. The IRL's problem isn't its cost, it is finding people who see value in spending the money.</STRONG>

IMO, F1 is a bad example because it isn't a free market. Europeans and others are, whether they realize it or not, pouring tons of tax money into F1. Much of F1's money comes from corporations that are either government-owned or are "national champion" companies who, de jure or de facto, have a government-guaranteed monopoly. And some teams are directly government-funded -- the reason Prost collaposed wasn't that it got any worse (it was as bad as it could be to begin with), but because the French government finally pulled the plug on their subsidies. If you're a TV network, it's easy to get a 100 share when you're the only channel on the air.

And in response to the other post that mentioned NASCAR's attempts to control costs: Prior to about 1990, NASCAR did indeed do a lot to control costs, and it worked -- prior to 1990 it costs a heck of a lot less to run in NASCAR than in CART. I remember Alan Kulwicki talking about his $2M deal with Hooters in 1992 and describing it as a "Hendrick-like" budget. Now the situation is reversed; you can run CART (never mind the IRL) for a lot less than what it costs to be competitive in Winston Cup. Some WC teams have well upward of 200 employees; Hendrick is said to employ over 400. That's more than the division I work in at Boeing, and we're building spacecraft, fer crissakes. (Everyone knows, or should know, that there is no human endeavor ever devisied that is capable of burning money faster than aerospace... ) The truth is about the only thing NASCAR restricts is electronics in the car, and they do that more because of a Luddite attitude than any desire to control costs. By comparison, they have done almost nothing (until very recently) to control the use of exotic materials. If I had the money to fly a metals processing furnace on the Shuttle and use it to produce ingots of a supercooled calcium-steel alloy, I could use it to machine conrods and it would be perfectly legal. (Hint: If anyone has $40M to blow on one motor, we just happen to have a furnace laying around... ) My point is: NASCAR isn't a low-cost series and hasn't been for some time. Once the IRL (and maybe CART too, if it makes it out of its current mess) does a good sales job and gets some people's attention, NASCAR is in trouble. (And it might be anyway -- this year's Daytona 500 doesn't have a presenting sponsor, thanks to K-Mart. If that isn't a shot across the bow, I don't know what is.)

Lucky161, if you still want to talk modern roadsters, I'm willing to entertain the idea. How about we join up on the Tech Talk forum? It looks lonely.

[JoeBob]

IMO, F1 is a bad example because it isn't a free market. Europeans and others are, whether they realize it or not, pouring tons of tax money into F1. Much of F1's money comes from corporations that are either government-owned or are "national champion" companies who, de jure or de facto, have a government-guaranteed monopoly. And some teams are directly government-funded -- the reason Prost collaposed wasn't that it got any worse (it was as bad as it could be to begin with), but because the French government finally pulled the plug on their subsidies. If you're a TV network, it's easy to get a 100 share when you're the only channel on the air.

The top 3 money spenders are Ferrari, McLaren and Williams. Who is getting money from any government?