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F1 mulls launch of American junior series, will kill IndyCarUPDATE #2
On road and street circuits a GP2 car will smoke an IndyCar
Another reader writes, Dear AR1.com, The news that GP2 Series might come to the USA should send shockwaves through 16th and Georgetown. Any business must always be looking at potential threats to their business, and the possibility of a GP2 Series here would be a significant threat to the IndyCar Series (not so much the Indy 500).
Here is how I see this threat affecting the series. The overwhelming majority of drivers in the IndyCar Series are "ride buyers". Meaning the drivers bring the sponsorship and they take that sponsorship to "hire" a team to provide them with a racing program. It costs about $6 million to run an IndyCar team these days, and drivers need to bring anywhere from $2.5 - $5 million to a team. Many of the European drivers that are trying to get into F1 will go through GP2 first and they will typically have to bring $1 - $1.5 million in sponsorship. You can see the difference in price between GP2 and IndyCar.
Believe me, I know the numbers as I have talked to a number of European drivers over the years to get them to come to IndyCar with their sponsorship. The problem is, many European drivers are trying to get to F1, so they prefer GP2 (Alexander Rossi and Connor Daly ring a bell?) to get there. They are not going to pay $1 million more for an IndyCar ride in a car that seems to be a lateral move at best, and doesn't get them closer to F1. Ride buyers in F1 bring anywhere from $5 - $10 million depending on the team, which is about what an IndyCar ride would cost. What driver would choose IndyCar over F1 if it was the same price?
Many drivers in Europe feel that the GP2 car is the same, if not better, than the IndyCar. Since IndyCar is now, in effect, a spec series just like GP2, the Indycars are not perceived as an equivalent to F1 like it was back in the late 80's and 90's. Therefore, IndyCar is now an equivalent to GP2 as they are both spec series and GP2 is a more clearly defined path to F1 than IndyCar right now.
You would also have to look at teams and sponsors. If it only costs $3 million to run a 2-car GP2 team, but $6 million to run 1 IndyCar, I think you will see IndyCar teams move to GP2 as an alternative. Plus, it would be much easier to find $3 million in sponsorship than $6 million given the current economy. We have already seen Conquest and now HVM leave IndyCar and go to the much less expensive Sports Car Series in the USA.
This leads me to a conclusion that if GP2 comes to the Americas, then Hulman & Company would best be served to focus on its core business of operating the Indianapolis Motor Speedway, and concentrate on the Indy 500, like it did prior to 1996. Make its own rules for the Indy 500, sell the IndyCar Series, and take the $10 million or so that they are spending to prop up the IndyCar Series and put it into making the Indy 500 the highest paying race in the world. You would see 33 or more cars going there to win the biggest prize in racing, and the Series can be owned and operated by someone else, or the teams all run the GP2 Series at that point and then try to win Indy.
Just an observation by someone who deals with sponsors and drivers. Name withheld by request
11/13/12 A reader writes, Dear AR1.com, GP2 cars will smoke the overweight and bulky IndyCars. Hence GP2 will become the premier open wheel racing series in the USA if this happens. And for sure it will kill off Indy Lights, which is on life support anyway. And God help us because those new IndyCars are soooo ugly. I loved your analogy of the new IndyCar being the Edsel Ford of our time. You were spot on. And to think the team owners don't want body kits. Look how many fans were lost in just one year. Another year of those ugly cars and you may as well order the flowers and plan IndyCar's funeral. Dave Rosen
11/12/12 Formula One's management is considering creating an American version of GP2 or GP3 in order to drive popularity of the sport in the United States which this weekend hosts its first Grand Prix for five years.
Company documents show that it has the working title of the 'Americas Series' and, if given the green light, will feature races in the United States, Canada and Brazil. The aim is to stimulate the development of grass roots motorsports in these countries and generate publicity for F1 so that it eventually attracts more local drivers.
This year only three of the 20 F1 races are in the Americas. In addition to this weekend's race, which takes place in Texas, there are well-established Grands Prix in Canada and Brazil. However, F1 has struggled to gain popularity in the United States. There are no American drivers currently competing in the sport and the last was Scott Speed who raced briefly for Toro Rosso in 2006 and 2007 without scoring a point.
According to the company documents, F1's management believes that it will eventually be able to develop its business in North and South America to a level comparable with that in its traditional European base.
A regional variant of GP2 has been attempted before with little success. A GP2 Asia winter series was launched in 2008 but its last season was in 2011 when it only held four races with two of them taking place at Imola in Italy. Although teams were encouraged to run local drivers, many still chose Europeans or South Americans instead despite restrictions on the number of points they could score.
Since GP2 launched in 2005 it has been a major success story in producing F1 talent, with former champions including Lewis Hamilton, Nico Rosberg, Pastor Maldonado and Romain Grosjean. The series was acquired by F1's parent company, the F1 Group, in 2007 and three years later it launched GP3 to provide upcoming drivers with another clear step on the ladder to F1.
GP2 and GP3 generated $44.8m in revenues last year. This represents around 2.9% of the F1 Group's total revenue and it was made up from the sale of cars and parts to the participating teams, plus promotion and advertising fees and maintenance services.
It isn't only the F1 Group that would benefit from an expansion of GP2 or GP3. Publicity generated by an American junior series could be very useful to the organizers of the proposed Grand Prix in New Jersey, who recently shelved plans to host a race in 2013 amid budget concerns. It would also be beneficial to the F1 teams because as the sport's profile grows in the US it is likely to increase interest in sponsorship from American companies. However, the teams would not receive any additional revenues directly from the series itself as turnover from GP2 and GP3 is excluded from the F1 prize money fund.
Although there have been a number of plans to improve the profile of F1 in the US in recent years, the race in Texas is so far the only one to come to fruition. Despite being granted an entry slot for 2010, new team USF1 collapsed under the weight of financial troubles before it even made it to the grid. Earlier this year Red Bull was rumored to be looking at creating a 'Stars and Stripes' F1 team piloted by American drivers, but so far nothing has materialized. ESPNF1.com
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