QuestionI am interested in the business of race teams, I am most interested in the amateur teams. Are they all for-profit organizations or are some non-profit? Are they S and C corps or some other form? What is their main sources of revenue? Are they formed mostly to allow guys to race, or can they be a legitimate way to make a living?
AnswerHi Gary,
I don't know too much from a business perspective of the racing world, but I can say a few things.
Most I would say are for profit organizations. There comes a lot of material in the building, and maintence of a car and team. Because of this high cost, all organizations race to win a paycheck. Where most of their money comes from, however, are the sponsorships they put together. A car sponsor will pay a certain amount of money to have their logo on your car. But this can only be done if the driver and team are good enough to gain followers of the sponsor. So a reputation has to be built before this kicks in.
Most amateur teams are sponsored by the owners themselves. So they foot a lot of the bill. While the car itself is a pile of money to spend, keeping a crew and drivers employed makes up a lot of money too. And, once again, when a new race team is started the owner better be ready to cough up a lot of funding.
As the team gains a reputation, well, lets take Dale Earnhardt Jr., for example. He makes a killing off of his merchandise (t-shirts, jackets, etc). But that is only profitable for teams whose fans would be willing to spend their money on a driver's rep.
And as for the last question, the only way to make a living at it is to go into it whole-souled. You have to be constantly pushing to get better. Or to get a partnership with another team to ease the financial burden of it all. But usually teams at the lower levels, like amateur teams, are privately funded just to let the racers drive and have fun.
Hope this little bit helps #and I apologize for the delay in response),
Coy Jordan
