The current race season is winding down, and this off-season will start the transition towards the next phase of team ownership. This month we will look at the factors influencing these moves and outlook going forward.

Motorsports on many levels has been an expensive proposition.  Basically, spend what you can afford, then more.  Money equals speed.  Not the typical business rationale, but passion can affect the decision-making process.

Historically, there have different ownership models for professional sports.  Most are private and few public.

Many are legacies, where the family has owned the franchise for decades and select siblings have been involved in the front office and related positions.

This the most common the NFL. League rules over ownership percentage, voting rights and leverage are designed for guidance where non-compliance results in heavy fines.   The goal is to provide permanency where the average team value is over $3.0 billion.

Racing has long been a family business.  Time spent together prepping the car, traveling to the track and on pit road is the staple. Long hours were the norm and lofty expectations just part of the goal to reach the winner’s circle. Family legacies abound and are on display at the hall of fame.

Success breeds success and the motorsports is no exception.  Business savvy is as important being race-savvy.

Drivers also contemplate their future beyond the wheel.   

Strong relationships with manufacturers and knowledgeable business advisors set a few up them up with retail car dealerships.  They are solid commercial pitchmen, and perhaps more importantly, great salesmen.  The result is a solid addition to the investment portfolio.

Many drivers are involved in racing operations, in being part-owner of the team they drive for, or owning various other racing enterprises such as tracks, series, or parts manufacturers.

Professional team ownership is evolving in most sports.  Racing is no exception.  Many factors are at play. 

The sanctioning bodies strive to make the playing field level – this is not easy.  Cost containment is a major step.  

Technology has evolved to such a point that the costs to participate far outweigh the benefits of doing so. It’s not a sustainable business model.

The establishment of the charter system has also been important. 

The goal was to provide deliver stability and long-term value to existing team owners while providing a clear path for ownership.

The agreements outlined a system where charter could be bought, sold or transferred on the open market. 

The result has been the rise of smaller organizations.  A limited amount of charters became periodically available.

One early objective was also to limit multi-team ownership and the power of super teams over the rest of the starting grid. 

Entering strategic partnerships with established teams shortened the learning curve for new teams.  It also provided a reallocation of employment for a highly skilled workforce.

There has been a leveling off on the cost structure at the highest level of racing.  Big budgets and sponsorship deals will continue to exist.  Always have and always will. 

Traditional category partnerships remain involved.  The interest from new areas with technology is unprecedented.   It is necessary to connect with ever changing behavior patterns of the consumer.

The access to financial capital is positive.  Money is available and the cost of entry for motorsports is favorable compared the lofty asset value of other sports.

Signs indicate timing is right for the next generation of race team owners.  Taking the economic checkered flag is the ultimate goal.