MILLER: The cost of doing business

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MILLER: The cost of doing business

Insights & Analysis

MILLER: The cost of doing business


The most popular subject in The Mailbag, excluding when are we going back to Cleveland, MIS, Milwaukee or Fontana, is the cost to field a competitive IndyCar in 2021. And luckily I found an old budget proposal from 1994 to give us a little perspective on how much things have changed.

In 1974, a big crew was three of four full-timers, with some weekend warriors occasionally thrown in for 500-milers. Bill Finley, the jack-of-all-trades who built his Indy cars from scratch in the garage behind his house, only had John Barnes on the payroll, son Tom getting an allowance and apprenticeship learning to do everything, Howie Ferland as a machinist extraordinaire, then Shorty, Tex and the New Yorkers volunteering at the race track.

But by 1994 everything was bigger, more layered and a lot more expensive as CART was expanding its horizons to Australia, and street and road courses were as prevalent – and popular – as ovals. Engineers were starting to get a foothold on teams, and specialists had replaced the mechanics that could rebuild a corner, help assemble an engine or troubleshoot a chassis.

As the teams expanded so did budgets, and IndyCars were suddenly big business.

So, thanks to a couple of teams (one big one and one medium-sized) sharing some pertinent information, we’re going to show what’s transpired in almost three decades.

1994 2021
Chief mechanic $57,200 $75,000 – $90,000
Data engineer  $75,000 $65,000 – $80,000
Race engineer $125,000 $125,000 – $300,000
Gearbox mechanic  $45,000 $60,000 – $80,000
Lead mechanic $46,000 $55,000 – $75,000
Fabricator $40,000 $60,000 – $80,000
Team manager $50,000 $120,000 – $250,000
Mechanic  $40,000 $35,000 – $60,000
Truck driver $36,000 $50,000 – $60,000
Driver $1,000,000-$6,000,000 $250,000 – $2,000,000

A top driver like Al Unser Jr didn’t come cheap in 1994, but sponsorships were large enough to sustain those salaries. Motorsport Images

Teams travel 12 to 15 crew members per entry: a team manager, chief engineer, two support engineers, crew chief, chassis mechanics, sub-assembly mechanic, bodywork specialist, transmission specialist, electronics/IT, strategist, truck drivers and public relations person. Some truckies are also part of the pit crew, and team managers double as strategists.

A full-time employee of most teams works 12 months with full benefits, a 401K, two weeks paid vacation and a shared performance bonus.

Obviously, the biggest change has been engineering. With the cars all being the same and both engines right together in terms of performance, a savvy engineer has become imperative to a team’s success. I know it still makes A.J. crazy when he hears that there was a bidding war for an engineer that might have stopped at $400,000, but that’s the market value for the really good ones.

It’s tough to pinpoint the driver’s salaries. In CART’s heyday, Michael Andretti and Al Unser Jr. were reportedly knocking down $6 million a year, and Carl Haas would never confess to what he paid Nigel Mansell in 1993-94, but you can bet it was more than anybody else. Today, Scott Dixon is on top of the heap and our best guess is $4-5 million a year, but without the Targets, Marlboros, Kmarts, Valvoline, Texaco, Havoline, Miller Beer, Tecate and Player’s, it’s not the best time to strike it rich for drivers. The veterans are likely make $1.5-2 million with incentives,but the days of a Texaco/Havoline spending $90 million for three years are long gone.

The real expenses of IndyCar are chassis, engine, tires, maintenance and room and board. So here’s what one team was prepared to spend in ’94 compared to today’s numbers.

1994 2021
Two Lola chassis $380,000 One Dallara DW-12 $550,000
Cosworth engine $600,000 Honda/Chevy lease $1.5-$2 million
Tires $12,000 $500,000 per car
Shock dyno $20,000 Electromagnetic dyno $90,000
Crash damage $17,000 (one car) $500,000 for two cars
Rear wing $10,000 $30,000
Lodging $3,750 $375,000
Rental cars $1,200 $65,000 (two-car team)
Test day $42,000 $100,000
Indy 500 only $1 million $1 million

Obviously, the costs have skyrocketed in the past 27 years and the purses have failed miserably to keep pace ($30,000 to win a race), but teams seem satisfied that IndyCar and Dallara are doing their best to control costs.

The team from ’94 figured it was going to take almost $3.5 million to run a competitive operation, while today’s figure is close to $6.5 million per car. But the most impressive numbers are the 22-26 cars (besides Indy) that will be at every race in 2021. Owning an IndyCar looks like a non-profit organization, yet you couldn’t tell it from the entry list.