Thursday Summary at Silverstone: Money, Teams, & Hondas

08/28/2014 @ 8:32 pm, by David Emmett11 COMMENTS

Thursday Summary at Silverstone: Money, Teams, & Hondas Valentino Rossi Riders for Health Day of Champions Scott Jones 635x423

Silverstone has all the makings of being a very hectic weekend for a lot of people. Not so much because of the weather – things are looking up compared to a week ago, with just a few drops of rain forecast for Friday, and dry weather for Saturday and Sunday – but more because of the goings on behind the scenes.

Thursday was the deadline for Moto2 and Moto3 entries to be submitted. The class looks to be oversubscribed again, with Dorna and IRTA left to whittle the entry list down to something of its present size.

The extra entries are mostly expansion projects of existing teams, one-rider teams wanting to expand to two, or two-rider teams looking to become three-rider projects. The teams now have to stump up a deposit, before presenting their final rider lists at Aragon.

That has produced a certain pressure in the paddock for teams to sign riders for next year. The main players now know more or less where they are heading, though few will admit what their plans are. Most of the top Moto3 riders are off to Moto2, with those that remain filling the juiciest spots left open by those who are departing.

The Estrella Galicia team of Alex Marquez and Alex Rins is to be split up, with one Alex rumored to be off to Marc VDS alongside Tito Rabat, while the other heads to the Pons team. Which Alex goes where is yet to be confirmed, but the smart money puts Marquez at Marc VDS, and Rins at Pons, in a charmingly consonant distribution of riders.

Rins’ slot depends on what happens with Jack Miller: if the Australian does not go to LCR Honda in MotoGP as rumored, he will take the spot vacated by Maverick Viñales. Miller’s place at Red Bull KTM Ajo is to be taken by Brad Binder.

If the situation in Moto2 and Moto3 is close being settled, all is still up in the air in MotoGP. Before the summer break, not much was expected to change, but the impending loss of Go&Fun as sponsor to the Gresini team has thrown a spanner in the works.

HRC has given Gresini until this weekend to place an order for the factory Honda RC213V, but without the backing of a major sponsor, Gresini will not be able to afford the bike. That would wreck Gresini’s existing plans, and lead them on a search for alternatives, one of which could be running the factory Aprilia effort.

Gresini’s difficulties reach far wider than just their own team. The decision of Fausto Gresini would have a knock-on effect throughout the paddock. Any course of action other than continuing with the status quo would cause a major reshuffling of bikes, riders, and even teams on the grid.

Those changes, like Gresini’s decision, are all based on money, the financial support available to teams, and the unintended consequences of each of these decisions. To gain some background into the situation of grid slots in MotoGP, I went to speak to Mike Trimby, General Secretary of the team association IRTA.

IRTA is charged with managing and distributing grid slots to all of the Grand Prix teams, and representing their interests. Together with Dorna, IRTA select which teams are accepted as entries into MotoGP, and who gets what support.

The general idea, Trimby explained, is that the top 22 grid slots receive financial support. Ranking the grid slots is simple: by points scored in the championship by each rider, or their replacement. An example to elucidate: Drive M7 Aspar has two grid slots.

Hiroshi Aoyama has scored 37 points for his grid slot, putting Aspar’s first grid slot in 13th position. Nicky Hayden has scored 29 points for his grid slot, while Leon Camier has added an extra point to the tally, giving Aspar 30 points for their second grid slot, and putting it in 15th place over all.

So the top 22 grid slots receive financial support. That support consists of free tires from Bridgestone, and free freight for all of the overseas rounds of MotoGP. It also consists of a sizable contribution towards travel expenses for all of the members of the teams and riders.

Just how much the travel expenses are is not public knowledge, but it is rumored to be sizable. In total, with tires, freight, and travel expenses, the total support from IRTA could cover up to half of the cost for a private team.

At the end of this year, the grid slots in 23rd and 24th place will lose the contribution for travel expenses, though they will keep their freight allowance and free tires. This makes it less attractive for the teams at the bottom of the standings to remain, given that a large chunk of their income will disappear. Selling their grid slots then becomes a more attractive option, bringing in stronger new teams.

The trouble for those new teams is that they will not receive any support at all. New teams will have to pay for tires, pay for their own freight, and will not receive any contribution towards their travel expenses. That is a serious investment: an educated guess says that the cost of freight and tires alone would be in the region of 1.7 million euros a season.

Add on between 2 and 3.5 million to lease a satellite bike, and then wages and travel expenses for a rider and his crew, and the cost of running a one-bike team as a new entry would be anywhere between 5.5 and 7.5 million euros a season. That is a serious sum of money. Affordable for a factory, much more difficult for a private team.

Where does that leave the new entries? As a new entry, Suzuki will have to pay for tires and freight, and will receive no subsidy from IRTA for 2015. They will also have to buy the grid slots, most likely the slots made available by PBM. If Aprilia enter as a separate factory team, then they, too, will have to pay for everything out of their own pockets.

The same goes for the Marc VDS team should they decide to move up to MotoGP if Gresini give up their factory Honda. It is also true for LCR Honda’s second bike: Lucio Cecchinello’s team will continue to receive the subsidy for their first bike, with Cal Crutchlow aboard, but if Jack Miller does make the jump aboard the second bike, then LCR will have to pay for tires, and not receive any extra freight allowance for the second bike.

The reasoning behind this decision is simple. “We want to give the teams a return on their investment,” Trimby said. “We want to reward the teams who gambled on CRT with us, who put their own money in.” The reason to support existing teams was to reward their commitment when the championship faced its darkest moment.

Now that MotoGP was back to looking a lot healthier, those teams deserved to keep their backing, Trimby explained, and not lose it to new entries who had more money.” Fair weather teams have to pay the price of entry,” Trimby said.

While the sentiment of IRTA is laudable, the law of unintended consequences kicks in, exactly as you might expect. Gresini’s decision suddenly becomes relevant again, for their grid slots suddenly have a lot more value. If Gresini sells those grid slots to a factory, that factory would not receive any support from IRTA.

But if Gresini becomes the new Aprilia factory team, the entire proposition becomes a lot more attractive financially. Not only would Aprilia not have to pay an estimated 2 million euros for two grid slots, they would also continue to enjoy the benefits which Gresini has accrued.

They would get free tires for two riders, free freight for two riders, and receive a contribution for travel expenses. Aprilia would save 2 million for grid slots, another 3 million for freight and tires, and receive an extra million or more in travel allowance. The 6 million euros Aprilia saves by partnering with Gresini would pay for a lot of R&D, a major incentive for a small, cash-strapped manufacturer.

While Aprilia look set to benefit from IRTA’s financial rules, the private teams face a very difficult situation. Two weeks’ ago, Marc VDS looked almost certain to move up to MotoGP and take the Honda RC213V vacated by Gresini.

Since then, members of the team have been almost impossible to reach, as they engaged in a frantic effort to raise the funds needed to run a Honda RC213V in MotoGP. If you tried to phone them, your call was ignored: if you weren’t calling to offer them money, then you were wasting time which they could put to better use.

It was a Herculean effort, which got the team to within 90% of the amount they calculated they needed to lease the bike and run the team. Though they were still short of their target, they were confident they would have achieved their final goal by the start of the season.

Add in the cost of freight and tires, however, and they are suddenly another million and a half shy of their target. The task goes from being Herculean to Sisyphean, the goalposts moving every time they think they are getting close.

That leaves the team extremely frustrated. I briefly ran into Marc VDS team boss Michael Bartholémy in the paddock, as he rushed from a meeting with IRTA, and he answered my questions with a rhetorical question of his own: “If you ran MotoGP, would you want Marc VDS in MotoGP?” Marc VDS is a well-structured, well-funded, well-organized team.

Their riders were 2nd and 4th in the Moto2 championship last year, they are currently 1st and 2nd in Moto2 this year, and have won eight of the eleven Moto2 races in 2014. They have crew chiefs with extensive MotoGP experience: Pete Benson was crew chief to Nicky Hayden throughout his time at Honda, and won the 2006 title with the American; Naoya Kaneko was a stalwart at Kawasaki, before joining Marc VDS.

It is not just Marc VDS that the financial situation will discourage. Sito Pons, the Interwetten team, even the Dynavolt Intact GP team, all have taken a long, hard look at MotoGP. All are strong, well-financed teams with a proven record in Moto2, and capable of making the jump to MotoGP, both in terms of technical ability and finances.

Finding 2-3 million for a bike would be tough. Finding another million or so for a rider, his crew and their travel expenses would make it even tougher. Adding another 1.7 million in sponsorship on top of that to pay for freight and tires, would make make entering MotoGP almost impossible.

While teams like Avintia, PBM, IODA struggle to make ends meet and put competitive bikes on the grid, the teams with the ability to make an impact are being kept out of MotoGP.

Is there a solution? While IRTA have to abide by the rules they have drawn up to be as fair as possible to the existing teams, Dorna could choose to step up and fund newcomers directly.

Manufacturers should be regarded as able to pay for themselves – if a factory cannot afford the 3 million a year to pay for freight and tires, they are unlikely to be able to raise the 40 or 50 million a season which they would need to spend to have any chance of competing with Honda, Yamaha, and Ducati.

Private teams are a different kettle of fish, and a contribution to get a strong, new team in MotoGP through its first year seems a sensible step. If those teams then also leave a slot in Moto2, that offers room to the stronger Moto3 teams to make the move up to the intermediate class. The knock-on effect would benefit the entire championship.

Where does all this leave Scott Redding, and the rest of the riders without a contract for 2015?

Redding is in demand: Honda are keen to keep him on the books, and are likely to help whichever team takes on the RC213V; Ducati are keeping a seat open at Pramac Ducati for the Englishman; and Redding’s name has even been linked to a factory ride with Aprilia, though such a ride would be massive risk.

Ideally, Redding would like to go back to Marc VDS and race with his own team, but it all depends on who has what equipment available. Only one thing is clear for Redding: he wants a ride on a factory bike for 2015.

There are other possible destinations for the Honda RC213V, however. Aspar would love to have a satellite Honda, and taking over from Gresini is a definite option, in which case they could inherit Redding. A second RC213V alongside Cal Crutchlow is also an option, which would make the seat even more attractive to Jack Miller.

It would also raise the bar for Johnny Rea and Eugene Laverty, both of whom are in the paddock at Silverstone. I was witness to a long conversation at lunchtime between Rea and HRC team principal Livio Suppo. It may just have been an informal chat. It may also have been the prelude to an announcement by the Ulsterman.

What is certain is that the situation at Gresini presages a major reshuffle. Bikes, teams, riders all look set to indulge in a frantic session of musical chairs. The situation is illustrative of MotoGP’s biggest problem: not the rules, not the technical regulations, not even the appeal of the class to the factories or casual public.

There is only really one serious problem in MotoGP, and all of motorcycle racing along with it. That problem is money, and how to get hold of it. There is simply not enough to go round at the moment, and Dorna’s efforts to help teams with sponsorship have fallen painfully short of what was hoped, and what is needed.

All this talk of rules, of technical regulations, of riders, of teams, in truth, it is all just a sideshow. Every one of MotoGP’s problems could be fixed by bringing more money into the sport, and capitalizing on the obvious appeal of the series.

That is where Dorna is falling most short. If Dorna really want to secure the future of MotoGP, they need to help the teams start to generate a lot more income than they are managing at the moment. That, truly, is the biggest challenge facing motorcycle racing in this decade.

Photo: © 2014 Scott Jones / Photo.GP – All Rights Reserved

This article was originally published on MotoMatters, and is republished here on Asphalt & Rubber with permission by the author.

Comment:

  1. JS says:

    “That is where Dorna is falling most short. If Dorna really want to secure the future of MotoGP, they need to help the teams start to generate a lot more income than they are managing at the moment. That, truly, is the biggest challenge facing motorcycle racing in this decade.”

    It might help a little to secure potential sponsors if the tv cameras were concentrated on the on track action and any battles that are happening whether it be a battle over 10th place or two riders determining which one doesn’t finish last.

    Too many times (and this problem seems to afflict ALL televised motosport) camera shots are turned towards people staring at tv screens in pitlane so that we can see their reaction to what we were just watching. Or cameras watching a rider coming into/leaving pitlane while the on screen graphics are informing us of a rider on a hot qualifying lap BUT WE’RE NOT GETTING TO SEE IT!

    When the bikes are on the track whether it be timed practice, qualifying or the race that is what I want to see and I’m sure the team sponsors would prefer that too. Want to bring in more money into MotoGP – improve the show, how? for starters – by showing it properly!

    No television broadcaster turns the camera away to get the crowds reaction just as a free kick or penalty is being taken in football yet the equivalent of that happens in motorsport – spoiling the show.

  2. HateUK says:

    ^^Good point – as attractive as Mrs Stoner was, no race fan wanted to interrupt the on-track battle to see her or Rossi’s partner Uccio

  3. KSW says:

    Dave,

    Part of Dorna’s problem and a big one is the “Lock Out” of media. It’s pretty damn impossible to grow the sport and bring people in if the door is locked. Funny I don’t see MotoGP on the main Sports Page of BBC (since it’s Silverstone this weekend) Funny you and the media room have to pay to be there, funny no video reporting allowed due to Bridgepoints rights ownership they taught to the likes of the Canadian Pension Fund as a reason to invest when there use of those rights is pushing people away.

    Perhaps IRTA should be charging every Tom, Dick and Nobody celebrity they are comping full access passes to. It was COTA that I was standing next to a barely known comedian Alonzo Bodden and his entourage all with full access IRTA passes and the entourage said, “what’s this track access mean? Can I go on the track?” As a working member of the press unwilling to pay Dorna the exact amount a Magazine is willing to compensate me for a weekends work, what the hell is that group of nobody’s doing with full access? IRTA? Anyone?

    I didn’t know that the reason so many have walked away from Dorna was tough times so much as moving targets and disdain at what Bridgepoint has done to Dorna and the Sport. You really need to stop referring to the sport as Dorna because it’s now Bridgepoint. Again, I’d recommend you start talking to the Bridgepoint staff on sight in Dorna shirts to get some better insight into what is going on.

    It takes more than a constant reference to MotoGP as being like Formula 1 beyond the politics to make the sport grow and there are many to blame.

  4. n/a says:

    So Suzuki, with no grid point things, are going to get f***ed over.

    Also, should Kawasaki decide to return, they’d get f***ed over too?

  5. L2C says:

    @ KSW

    You made some good points, but blaming Bridgepoint is well beyond the scope of David Emmett’s article. Blaming Bridgepoint would mean investigating how Bridgepoint manages its investment in Dorna. Emmett clearly didn’t undertake that task. And if he tried, nothing came of it. Besides, it’s Dorna’s job to manage MotoGP, not Bridgepoint’s. Sure, in the end it all comes down to the bean counters at Bridgepoint, but Dorna is who is responsible for what we see. Bridgepoint is only indirectly responsible.

    If you want to blame Bridgepoint, you might as well go the distance and blame the shareholders, too. Blame it on their demands. They all want to profit on their investment in Dorna, as it’s the only reason why they are invested in Dorna in the first place. Most likely there is a mixture of short-term and long-term investment goals, but it’s likely we’ll never know strategy or any of the details.

    Dorna, however, are directly responsible for what we see each and every weekend. IRTA is also responsible. So are the MSMA. Even the FIM has their role to play. In short, I don’t think that Emmett is wrong is his criticism of how well Dorna is managing the sport. Perhaps Bridgepoint deserves similar criticism of how well it manages Dorna and how that impacts the sport, but without juicy details Bridgepoint more or less escapes rational criticism.

    Broadcast deals are a sore point, without question. And since you covered that well, I won’t get into it but promotions is what it is. If you have ever spent any time in the entertainment business, you would know that spending every last cent of the budget is the primary objective of any promotional campaign. There cannot be anything left over, otherwise the budget will be cut the next time around. Budgets for promotions are supposed to be blown, that’s why they call it promotions. Endless booty–or swag, if you prefer. All-access passes to virtually anybody at all, would be a part of that. All you can eat and all you can drink. Pens and watches. Coffee mugs. If you know somebody, that’s all that matters. Comps do go to famous/semi-famous people, but most of the time they go to ordinary Joes.

    Anyway, Emmett’s article is one of his best, in my opinion. Lots to chew on.

  6. sideswipe says:

    All I gotta say is that a factory RC213V in Marc VDS livery would be a damn fine sight.

  7. @KSW:

    I have never seen any Bridgepoint staff at a MotoGP event. Bridgepoint, like most private investment funds, care precisely zero about the companies they own. They care only what the revenues are, and what the profit is, and how they can extract the maximum financial gain out of them. As far as I know – and I have tried to find out – Bridgepoint have no direct involvement. They let Ezpeleta run the show, and tell him what they expect in terms of a financial return.

  8. Frank says:

    Great to see you post here David! Top notch article.

  9. KSW says:

    Dave,

    Thanks m8. Then I’d like to suggest that the group of Dorna Staff staying at the most expensive hotels in town stop the wasting of capital and sleep where Frine and the the rest of the staff does. At COTA 2 years ago I stayed at a Fine Hotel and Resort as it was a last minute thing and you know what, that is not where I expected to see over a dozen Dorna shirt wearing folks.

    L2c,

    I do think that Bridgepoint has involvement. As a member of a large PE family and many friends in the world of finance I know of not one who buys a company then sits back with blinders on and allows that company they’ve bought to go on about there business without any involvement. If they did they wouldn’t be a PE for long and I give Bridgepoint more credit then that. I also give Dave a whole lot of credit and am just trying to push for even more. The Canadian Pension states the reason for there investment is the media rights. Well if the door is locked and sport not growing what does that do for the tax payers of Canada invested in the fund?

  10. H.L. says:

    Very informative article that brings clear understanding about the financing. Wow. Maybe it’s time to make the factory teams split the freight and travel expenses so they can distribute these funds to the new entries. It will be better for the grid and sport in the long run competitively and for the fans.

    It’s time for Dorna and IRTA to stop being scared and punked by the major factory teams, mainly Honda of course.

  11. KSW says:

    Personally I think BMW is the smart manufacturer. Leading sales gains in industry and they’ll get a better sales bump from Michael Dunlop winning the TT the way he did on the BMW than any of the Mfg’s being penalized for returning to MotoGP. Just my 2 cents.