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 Post subject: Making a small fortune
PostPosted: Mon May 31, 2010 11:06 am 
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Somebody once said that if you want to make a small fortune in racing, start with a large fortune. That said, I'm a fan with little contact with any team, so I'm honestly curious. If you factor in all cash spent, residual value of the equipment if one were to sell it off and get out, sponsorships, clothing sales, entrance fees, tow money, winnings, etc. does anybody actually break even or turn a profit in racing? If not what sort of cost per year is it for the various classes for a low-buck, mid-tier, or "top of the heap" operation?

I'm not looking for specific dollar figures for specific teams, just trying to get a general order-of-magnitude appreciation for what goes into theses races that I enjoy watching. And if the answer is "None of your business!" that's OK, I'm just trying to understand if I'm cheering for people doing risky things for our enjoyment, or cheering for people who are doing risky things and paying (or coming out ahead) N dollars over the course of the season for the privilege.

It seem like a lot of people in the stands are related to or know people on one of the teams, so those fans have some clue of what's involved, but I'm one of those who doesn't know anybody on "the inside", and I'm trying to get a better idea of what's involved.

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Q: How is Central PA different from the Old West?
A: In Central PA, the Outlaws try to catch The Posse!


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PostPosted: Mon May 31, 2010 4:18 pm 
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If you don't have about $100.000 to get started..(does not included hauler) keep watching..

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PostPosted: Mon May 31, 2010 4:25 pm 
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STEVE PATTERSON wrote:
If you don't have about $100.000 to get started..(does not included hauler) keep watching..


I had gathered that was the ballpark for initial investment, but what I was curious about was once a team is up and running, what the on-going balance sheet is like. As a friend once said about buying a vintage Jag XKE, "When I paid {whatever the figure was} to buy it, I didn't realize I'd be paying the same amount each year for upkeep and repairs!"

Personally, I'm not looking to get into it, I'm just curious about the economics of the whole thing, and whether it's a really expensive hobby, or if it is a viable, or at least break-even proposition for some percentage of those running teams.

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Q: How is Central PA different from the Old West?
A: In Central PA, the Outlaws try to catch The Posse!


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PostPosted: Mon May 31, 2010 4:40 pm 
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STEVE PATTERSON wrote:
If you don't have about $100.000 to get started..(does not included hauler) keep watching..


I think you are way off on that figure.

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Central PA 358 Racing Series - http://www.centralparacing.com

2014 race count

Williams Grove-4
Lincoln- 18
Trail Way -15
Port - 1

40 races in 2013
50 races in 2012.
56 races in 2011.


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PostPosted: Mon May 31, 2010 4:58 pm 
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I had a conversation in Florida, with a top notch Central PA car owner and he told me if he doesn't lose 100,000 dollars a year he's happy.....And that was 10 years ago.....

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PostPosted: Mon May 31, 2010 6:48 pm 
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The owner of one of our better teams told me last season that he spends $300,000 putting his car on the track every year.

Ed


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PostPosted: Mon May 31, 2010 9:14 pm 
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I think I remember reading that the year Rahmer won 29 races the 88 barely broke even.

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PostPosted: Tue Jun 01, 2010 1:15 pm 
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CTtoPA wrote:
I think I remember reading that the year Rahmer won 29 races the 88 barely broke even.


That is correct and that was without owning any of the motors.
It all depends if you are running 410's or 358's and how many times a year you plan on running. There are extremes from one end of the spectrum to the other. You can do it cheap and be competitive for the number of races you actually run or you can blow the bank and run one of the top teams in the area on a consistent basis. All in what you expect out of it.


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PostPosted: Tue Jun 01, 2010 7:48 pm 
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GOSHOW wrote:
CTtoPA wrote:
I think I remember reading that the year Rahmer won 29 races the 88 barely broke even.


That is correct and that was without owning any of the motors.
It all depends if you are running 410's or 358's and how many times a year you plan on running. There are extremes from one end of the spectrum to the other. You can do it cheap and be competitive for the number of races you actually run or you can blow the bank and run one of the top teams in the area on a consistent basis. All in what you expect out of it.


At what point in the hierarchy does the possibility of breaking even or running it like a successful business come in? For example is every team in WoO (or IRL, or the top tier of the NHRA circuit, or NASCAR, or...) also dumping money from the owners' other enterprises down a rat hole, or are they able to pull in enough sponsor deals to cover costs, pay the help, etc.? I'm trying to get my head around some of the numbers being tossed around, and I keep coming back to the same answer - I hope there's more on the "inflow" side than it appears!

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A: In Central PA, the Outlaws try to catch The Posse!


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PostPosted: Wed Jun 02, 2010 9:35 am 
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I think racing has always been something a car owner wants to do, first and foremost. It's nearly impossible to make money doing it unless you're on a national level like NAPCAR. Simple mathematics makes it very clear that racing on the local level is a losing proposition - $200,000 a year (if it stops there) to win $6,000 over 30 weekends = $180,000 income for a team that always wins every race. Now let's pay for parts, the driver, tires, engine updates, fuel to, from and at the races just for starters. You haven't bought a hauler or race car yet. There has to be a certain amount of ego feeding involved.

Back when Bob Weikert's team won 56 of 114 features, including the King's Royal, Knoxville Nationals, Williams Grove National Open, Port Royal Tuscaroara 50 and numerous Outlaw and All Star shows, they did not make money. Now Bob did pay everyone well, gave performance bonuses, bought dinner (steak, of course) almost every night we were on the road and spared no expense on parts, but even if he hadn't done those things, we still wouldn't have been profitable. And a lot of the expenses weren't even charged to Weikert's Livestock Racing - my checks came from Weikert's Meat Market, for example, while others were paid by Weikert's Buying Station or one of the farms.

This is why I hold every car owner in the pit area in high regard and hate to see cars get torn up. It is costing him/her money - a lot of money - to bring that car to the track and put on a show for us fans and he/she will never get that money back.

Ed


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PostPosted: Wed Jun 02, 2010 10:50 am 
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Then why don't the promoters in this area get together and come up with ways to reduce the costs? In this economy, it would not be a surprise if the money tree ended some day and the quantity of cars dwindled to nothing.

I am not an expert on the sport nor am I a gear head but from my persective, the engine builders are making a killing from the sport. Everyone else is hanging on by a thread or taking a bath (all owners). If the operational costs of a car can be reduced significantly, we will have more "owners/sponsors" entering the sport to participate. The more cars means more money for the tracks, etc....on and on and on.

If they want to correct, (not assuming they do) get the engine costs under control and the trickle down affect will be positive for all those involved in the sport.

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PostPosted: Wed Jun 02, 2010 12:31 pm 
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I'm certainly not defending anyone but I don't think the engine builders operate on the profit margin many people believe they do. Don Ott has been gracious enough to stay late at his shop so my son and I could take Lincoln's pump and Whistle box there to check them on a 358 engine he built and of which he knew the exact displacement and compression ratio. We speak often at the races and I can assure you that if he was making the kind of bucks many suspect he is, his employees wouldn't be working four-day weeks right now. On the other hand, you cannot have a nice facility like Don's (and, I'm sure, the other local builders') and give your work away.

A spec engine or at least a spec cylinder head is probably the only politically correct way to lower engine costs. Personally, I think a non-politically correct but better way might be to scrap the 410CID limit but cap the compression ratio at 12.0-1 or so. Our cars would probably be as fast with the higher displacement engines because of their higher torque but cheaper to run because the engines would go longer between freshenings. Of course, we couldn't do that because the Outlaws don't.

Ed


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PostPosted: Wed Jun 02, 2010 1:25 pm 
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I have heard of a 358 team that has made money the past 3 years. Now they did win a lot of races, but hey I guess it can be done if you are smart about it. :dontknow:

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Central PA 358 Racing Series - http://www.centralparacing.com

2014 race count

Williams Grove-4
Lincoln- 18
Trail Way -15
Port - 1

40 races in 2013
50 races in 2012.
56 races in 2011.


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PostPosted: Wed Jun 02, 2010 1:27 pm 
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I appreciate you insight as I am certainly not a mechanic. The economics of the sport intrigue me. To me, it is a very simple equation. Lower the costs of the cars by a set of rules for everyone = more cars = more fans at track = more money to tracks = improvements at track = better overall experience for everyone = more fans = more sponsorhip opporunities = improved purses = more cars and on. In the end, you build a very powerful sprint car network in PA and do not need the Outlaws. Nascar is a perfect example of what not to do. Back in the day when the local guy could build a car and get into a race, the sport was extremely popular. Now, you have to be filthy rich to even consider running nascar.

As has always been the case though, setting rules & regulations based on the outlaws will never achieve this objective. I know WG is never going to turn down the big bad money machine but maybe all other tracks could band together and make rules that control costs.

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PostPosted: Wed Jun 02, 2010 3:55 pm 
In a recent SC&M Magazine, Donny Schatz admitted in the year he and his father's team became the first million dollar team (2006?) they still lost money!

I agree with Ed... it seems the only way to cut the costs.. is cut the compression ratio or size. Or further more, we have downgrade or even spec or monopolize the smaller detail parts of the car to keep everyone equal. It's hard for me to say how you can do much else at this point without simply making a slower, heavier, "kit car" for everyone to enjoy.

With that said, a "435" can be run at the Knoxville Nationals.. someone please tell me how "that" is cutting costs?

I have been going to races since long before the weight rule, and now I think the rule just isn't cutting it. The really good (financially) teams are still refreshing motors and parts and even cars at an alarmingly expensive rate to truly stay competitive with the few others that do the same. And after all, why does the weight rule include the driver? I have firmly thought all along since day one.. wouldn't logically a lighter weight car with a heavier driver.. be faster?? Speaking of Donny... JK! :silenced:


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