INSIGHT: How much does it cost to create an IndyCar driver?

Image by IndyCar

INSIGHT: How much does it cost to create an IndyCar driver?

Insights & Analysis

INSIGHT: How much does it cost to create an IndyCar driver?

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It’s one of racing’s oldest cliches, one that’s never more apropos than when it’s applied to aspiring race drivers, some of whom have multiple legs up on the competition by virtue of having chosen their parents wisely. There is seldom a shortage of race teams ready, willing, able and forced by circumstances to hire drivers based on the money they can bring to the program rather than the on-track results they are likely to produce.

On the flip side of the equation are drivers who come from comparatively humble circumstances who make it to racing’s top echelons without the benefit of a trust fund or other family financial resources.

Take the one sitting on the outside of the front row for the Indianapolis 500: Spencer Pigot. By one informed estimate, it cost $5.8 million to get the young Floridian from karting to the point where he signed his first contract as a paid driver in 2017. Only a small chunk of that came from his family’s bank account.

“Spencer began karting when he was nine, and as a family, we spent between $50,000 – $100,000 on his karting,” says Pigot’s father, Barry.  “We’ve looked at the numbers pretty thoroughly, and what with personal sponsorships, commercial sponsorships and scholarships, there was $5.8 million invested in Spencer’s career up to the point when he signed his first contract.”

The younger Pigot had plenty going for him at age nine: oodles of talent and a passion for racing, for starters. But his father was familiar with the sport – make that the business – of racing. Barry Pigot was an accomplished race driver in his own right. (A photo of him going wheel-to-wheel with Nigel Mansell at Silverstone in a Formula Ford race decorates his office wall).

After he hung up his racing shoes, Barry forged a successful career as a salesman developing and utilizing talents that would one day prove invaluable to raising the financial support needed for an aspiring race driver.

“I knew the kind of money it takes for a young driver to make a career as a professional,” he says. “As a family, we didn’t have that kind of money, so from the start we began developing a network of sponsors.”

When he speaks about a network of sponsors, Barry does not have the Verizons, NTT Datas and Autogeeks of the world in mind.

Spencer Pigot’s father Barry calculates that $5.8 million was invested into his son’s career before he signed his first professional contract. Image by IndyCar

“When you’re talking about karting and the junior formula, there is little value for commercial sponsors,” he says.  “So you have to think in terms of individuals who are excited and able to support a young driver in the early stages of his career.”

“There are people who genuinely like helping young drivers,” says Derek Daly whose son Conor will start the Indianapolis 500 from the middle of the fourth row. “At the early levels in particular, you’re not selling sponsorships, you’re building relationships.”

Of course, far moreso than his friend Pigot, Derek Daly knows well both the business and sporting side of auto racing, having worked his way up the ladder from Formula Ford to Formula 1 in the 1970s before switching to Indy cars and sports cars in the ‘80s.

He offers cautionary advice to families who have budding Scott Dixons and Lewis Hamiltons in their midst.

“I always tell families ‘Don’t get emotionally, financially engaged in your son’s or daughter’s racing careers,’” he says. “That can happen very quickly. You have to think of it as you would like starting a small family business.”

Pigot concurs.

“As a parent, you have to be prepared to commit to your child’s career, to treat it like a business,” he says. “I was fortunate in that my wife (Shelby) ran our family business, which enabled me to devote at least three days a week to Spencer’s career.”

When Pigot progressed from karts to the Skip Barber system, he encountered a diverse group of competitors; young men and women aspiring to be the next Dario Franchitti or Michael Schumacher mixed with 30-, 40- and 50-somethings who had achieved success outside of racing… and who were capable of providing financial assistance to an aspiring and talented young driver.

Barry Pigot developed a contingency program to support Spencer: small stickers on his race car and patches on his driving suit at the similarly modest cost of $100 for a win, $75 for second place and $50 for third place. Not a lot of money per individual, but enough to cover the travel costs for any race, if Spencer finished on the podium.

Every bit as significant as financial support it generated, the program incentivized young Spencer to produce results.

“When you have a group of supporters the most important thing is that you deliver results to keep their enthusiasm going,” says Daly. “Enthusiasm is only fueled by success. If a young driver is not producing results, the supporters’ enthusiasm slides off – very quickly, in some cases – and goes to the next young driver who is delivering.”

Conor Daly attracted some backing during his junior career, but needed to keep delivering results to keep those sponsors invested. Image by IndyCar

Pigot and Daly both delivered results to their personal sponsors. Daly, for example, captured a World Karting association Grand National title and subsequently won a Skip Barber National Championship, the 2010 Star Mazda Championship and collected a pair of GP3 wins in 2012 and 13. For his part, Pigot won the Skip Barber Karting Shootout which led to a ride – and championship–- in the 2010 Skip Barber National Championship and, subsequently, Mazda Road to Indy scholarships for capturing the USF2000 and Pro Mazda crowns.

The frequency with which the letters M-A-Z-D and A appear in that paragraph point to another significant factor in the progression – and financial viability – of the careers of Pigot and Daly: Mazda’s support for aspiring race drivers through its various ladder system programs, which have contributed in excess of $12 million in support of talented drivers over the past decade. Both Pigot and Daly were also part of the Team USA Scholarship program, which exposed them to connections that proved valuable down the road.

According to Pigot’s breakdown, the Mazda scholarships amount to 30 percent of the $5.8 million it took to enable Spencer to progress from aspiring karter to paid race race driver. Another 30 percent came from traditional commercial sponsorships once Spencer progressed to the upper rungs of the racing ladder (e.g., Indy Lights). That leaves 40 percent (roughly $2.3 million) from personal sponsorships, initially the personal contingency programs in karting and Skip Barber series and which grew to a tried and true program used by a variety of drivers who sold shares in their future financial success to individuals in order to generate the financial support to further their racing careers.

“We organized a company – P1 Management, LLC – with 400 shares,” says Pigot. “We originally planned to sell 25 percent of the shares at $25,000 each to raise the funding for Spencer’s career, although we ended up selling 28-29 percent to cover year to year shortfalls.”

P1 shareholders were interested in helping Spencer not as a charity case but as an investment; one that began offering a return to its investors once he signed a contract as a paid driver as well as through any prize money, coaching fees and other income he derives through his professional career.

Mazda has stepped back from the Road to Indy program since Pigot climbed through the ranks, although the scholarships are expected to continue in some form. Outside of that, the basic strategies of the likes of Barry Pigot, Derek Daly and others who have found the financial means to support their childrens’ racing careers without bottomless checkbooks remain largely unchanged. Once your son or daughter expresses a desire to be a professional race driver and shows they have the commitment and talent to do it, you need to begin building relationships that will help provide the financial necessary support.

“It can be done,” says Pigot.  “You don’t have to be Lawrence Stroll or Grahame Chilton. But you do need to be fully committed. And you need to start early. We were starting to build relationships for Spencer’s career when he was nine years old. If your son or daughter is already 16 or 17, racing in Formula 4, I wouldn’t say it’s too late. You might get lucky. But the sooner you start building relationships, the better.”

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