ARGABRIGHT: Are The Big Boys Running Out of Money?

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Dave Argabright

INDIANAPOLIS — The big boys are running out of money. Slowly, surely, steadily, like the sounds of a clock: tick, tick, tick …

Since the beginning of motorsports, there has been a cultural divide. The big boys were the tracks and series that competed on a national level in front of a massive audience. The little guys were the short tracks, the dirt tracks, the local tracks. The big boys were stronger, bigger, more important, more influential, more … everything.

The dynamics are shifting because — and this statement doesn’t sit well with some — the big boys are in trouble. Sponsors are leaving and not being replaced; shining aluminum is visible on race day where fans once sat; and television viewership has diminished to alarming levels.

Every one of those entities — sponsors, ticket buyers and television viewers — feeds money to the sport. As the size of those entities is reduced, so goes the revenue stream.

On the flip side, segments of short-track racing are booming. Weekly local events are struggling, yes; but big events and touring series are attracting record crowds. Not to say short-track racing doesn’t have issues; it most certainly does, and they are pressing. But the issues are not as immediate or critical as those faced by the big boys.

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Auto racing is, in terms of economic theory and experience, a relatively young sport. The prevailing economic system is still an evolution in progress. In an earlier era teams were owned by wealthy individuals, funded from their pocket. Then came corporate involvement and rapid technical development. Today, every team at every big-boy level is a corporate entity. All along the way, money flowed in to cover the cost to play.

But that has changed, particularly in the past five years. We’ve reached an unsettling period when funds — from every source — are in steady decline, yet the cost of technology and competition are unabated. Various ideas to reduce costs have been either completely ineffective or have offered only slight relief.

In a word, the entire economic system of major league auto racing in America at this moment appears to be dysfunctional. Upside down. Unsustainable.

Trouble. Right here in River City.

Temporary? That is possible. It’s feasible something will suddenly appear to right the ship. Sponsors might materialize. TV ratings might surge. The stands might suddenly begin filling again. But what is most unsettling is that this downturn is occurring amid what, by all accounts, is a healthy and vibrant American economy.

If we can’t find enough money in a boom economy, where will we find it when the economy begins the next inevitable cycle of decline?

Science teaches us that every species must adapt to a changing environment. If the environment becomes warmer, colder, darker, lighter, whatever, the frog adapts or dies. There are no exceptions, no matter how fond you are of the species. Aside from artificial support, the natural course will prevail.

Right now, the frog — big-boy auto racing — is feeling more and more uncomfortable. The environment is changing all around him — money is drying up — and he isn’t sure what to do.

Virtually everyone involved in NASCAR or IndyCar is looking at dimin­ished revenue — all the way down to the paycheck level — from just five years ago. The downturn is here and it is real.

Thus far the offered solution has been, “Find more money!” So an army of agents comb the corporate countryside, looking under every rock, in every nook, desperately exploring new things to sell. Unfortunately, just as the need grows more pressing, corporate entities insist that it’s time for them to start writing smaller checks. The value, they politely but firmly assert, just isn’t what it used to be.

Another short-term — but eventually fatal — solution is “pay to play.” The concept of family money supporting an ambitious son or daughter has helped pay lots of bills in recent years, but even that regrettable scenario has financial limits. Plus, fans of American racing have shown little interest in rich people who can purchase fame and stardom but not ability.

There is an old saying in economics: If something can’t go on forever, it won’t go on forever.

It isn’t being dramatic to note that we might well be on the verge of an unprecedented crossroads in American motorsports. The near term — the next three to five years — is going to seriously test the leadership of every big-boy motorsports series, team and manufacturer. The coming days might be unfathomable to our 2018 mindset, unthinkable and radical.

Big-boy racing will evolve as it must. It is inevitable that the technical platform will eventually conform to the amount of money available. Four-post chassis dynos, aero kits, layers of race engineers, personal jets, high-end composite materials, engines that are used up in one day, all could go by the wayside. Layers of expense will eventually disappear if there is no money. Fact of life.

But what would such a world look like? Would the people in control of the sport — the series, the team owners, the manufacturers — evolve as needed, or would they leave the sport to allow it to be completely and totally reinvented?

Could we actually see the cost of competition fitting a sustainable model?

Could we once again experience the concept of a handful of guys from Spartanburg bringing a car to Daytona to try their luck?

Could we ever see another school bus engine in the Indianapolis 500?

I doubt it, but I don’t know. Nobody does, not for certain. In an ever-fascinating world, it appears we’re about to find out.