Tuesday, February 16, 2010

DeltaWing Budgets, or Why John Barnes is Excited

One of the biggest advantages of the DeltaWing program (we've been told) is that it's dramatically cheaper than the current Dallara, and cheaper even than the proposed Dallara, Swift, and Lola cars.

The current Dallara/Honda package costs at least $1.5 million per car with a Honda engine lease.  The best estimate of what it costs to race is $5 million to run the full season with a decent degree of professionalism.  It won't let you develop a bunch of trick mirrors and other Penske-like bits, but you'll show up and give a solid, professional account of yourself.  The IndyCar TEAM program currently pays $1.4 million for a full-season effort, per car.  The gap of $3.6 million is what a team needs to find in sponsorship.  Let's leave aside for a second ho the car looks, and just look at the money involved.

Let's say you're in the racing world.  You have a team that leases a shop and owns some tools.  In short, you have at least a vague idea what you're doing, and you want to go IndyCar racing.  In the DeltaWing universe, how does life get easier than it would be right now?

The DeltaWing folks claim that their car will cost approximately $600,000 with engine.  Those engines, since they won't need to produce the same power in a low-drag DeltaWing, will be built for 5000 mile rebuild intervals.

So you want to have a finished car, and a backup chassis that is pretty close to race-ready.  Let's call that $1 million.  Let's call the year's overhead another $1.5 million.  This covers your shop's lease, payroll, health care for your employees, travel expenses, transporters, and all your permits and certifications.  This doesn't include a driver's salary, but it gets the rest of the team.  That has your budget up to $2.5 million.

You need a driver, but you don't want to hire some kid who comes with a check.  You want to hire a hot shoe from Indy Lights who has won races and looks like he has what it takes.  He does not, however, race for free (smart kid).  Luckily, there aren't any seats open at Penske, Ganassi, or Andretti, so he's looking for a one-year deal where he can prove himself, so money is negotiable.  You sign him for $500K.  He can pick up some extra dough by wearing cool shades and a sweet watch on camera.  That takes you to $3 million.

You'll need to buy tires, and fix the crash damage that happens when your hot shoe doesn't lift his early enough.  And you'll need to rebuild your engine(s), though with the engines they're talking about using, that should be a bit cheaper than in years past.  Let's add another $500K to account for all of this stuff.  That brings your budget to $3.5 million.

I know the IRL is trying to trim costs, but they increased the TEAM program payouts for 2010, so let's project ahead a bit, and assume it'll go up a little bit more by 2012, to $1.5 million per car.  The gap left is $2 million, or $1.6 million less than the current reality, and that's assuming you want to hire a driver at $500K.  The prospects for finding a primary to kick in $1.5 million, and a couple of secondaries to kick in $500K between them are a lot more approachable than those for finding $3.6 million in a struggling economy.

I readily admit this is all assuming the best.  It sets aside whether the public (be it current fans or new fans) will accept the Indy Rocket as a cool race car.  It assumes the DeltaWing folks aren't full of it when it comes to the cost of the car.  It assume they can indeed convince multiple engine builders to allow their engines to race in the DeltaWing-driven IndyCar Series.  These are all (every one of them) large assumptions.

But ... it does help underline why guys like John Barnes, Tony George, and Dennis Reinbold are behind this idea.  In this new economic model Panther, Vision and D&R are suddenly looking like legitimate two-car outfits who are at least able to run with Penske and Ganassi, if not beat them occasionally.  Dale Coyne might not be a front runner, but he can run two cars and have his drivers in place by January 1 every year.  Conquest can reliably get at least one car to the grid every race.  Sarah Fisher and AJ Foyt are both bringing two cars to every race with Dollar General and ABC Supply.  Guys like Ron Hemelgarn and Paul Diatlovich can not only show for May, they can show up at Texas and Kansas, too.  A successful WoO or USAC team can realistically put together an Indy effort without jeopardizing their primary operation to make it work.  An ALMS or Grand-Am team can do the same.

And all of this without even considering hiring a driver because they can bring a check to keep you afloat.  And if you can raise anything over that $2 million number, you are either making your way forward in the field, or hiring a more expensive driver, or (*gasp*) turning a modest profit as a race team!

The pay level for those young drivers might still lag behind what NASCAR can offer (for now), but it at least makes it an option, and some of those drivers will go the Indy route.

Yup, this is all an exercise in fantasy right now.  You're completely right.  But if you start poking around, you have to admit it's a VERY compelling fantasy.  In fact, I dare say it's everything IndyCar fans could ever hope for right now - if only the car didn't look so weird.

Like I said, I'm sure some of this math is fuzzy at best.  What am I forgetting?  Remember that this  wasn't designed to fund a winning IndyCar operation - just to make all the races without looking foolish.  I'm curious what flows people see with this scenario.


Anonymous said...
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Fred Hurley said...
This comment has been removed by the author.
Fred Hurley said...

"Let's see...first of all, as a reader, I'm supposed to assume that you didn't lift a lot of those estimates straight out of my TrackForum posts."

I assure you sir, I did no such thing. But by all means, continue.

Anonymous said...
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Fred Hurley said...

I'm sorry if my response seemed out of line. I just take insinuations of plagiarism very seriously.

Don said...

Delta Wing looks like a joke, and I won't be part of watching these stupid things on track.

Delta Wing = Death of Open Wheel

Make the new formula look like an IndyCar. Don't destroy 100 years of history by racing a replica of the car on the Daytona 500 trophy.