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from https://racer.com/2019/05/26/insight-how-much-does-it-cost-to-create-an-indycar-driver/

INSIGHT: How much does it cost to create an IndyCar driver? Image by IndyCar 4.4k
By: David Phillips | May 26, 2019 4:01 AM

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.”

Conor Daly, Indianapolis 500, Spencer Pigot, IndyCar, Insights & Analysis

a couple comments

Erik Harken • 4 days ago
As much as I appreciate stories like this it should be noted that Pigot,
a driver who some would say started from ‘almost nothing’ had heavy emotional and financial support from his parents that allowed him to
start racing by the age of 9 for a total cost of $100,000. His father
also had the time to start and run a legitimate business in order to
manage and support his son’s career.

Were they billionaires? Clearly no. And that’s great. But the fact
remains that it requires hundreds of thousands of dollars, thousands of
hours of time for travel, repairs, practice, racing, coaching, and
management, as well as an incredibly early start in racing and
consistent participation from that day on to find Indy/F1 levels of
success. Much of the same goes for top level sports cars.

The fact is that very few people have these luxuries between family
support to start young and initially available finances/connections
which would allow them to take advantage of opportunities like the Mazda Scholarship Program.

If you want to read about a driver coming from blue collar backings to a Formula 1 career, read about Roland Ratzenberger’s amazing (and
unfortunately tragic) tale.

The idea of a top level professional racing driver reaching a successful
and fruitful career by virtue of talent and hard work has always been a
myth and nothing more. I have yet to see anything that comes close to convincing me.

Tony Karais Erik Harken • 4 days ago
You clearly haven't been pain by attention then have you?

Erik Harken Tony Karais • 4 days ago
Assuming you said “paying any attention” I’d like you to tell me the
name of one professional driver in F1/IndyCar in the last decade who had managed to nab a spot on the grid without having to spend hundreds of
thousands (or more) to get there. I can name plenty who’ve done the opposite

Pinky Erik Harken • 4 days ago
It's always been easy to criticize auto racing on this subject since it obviously depends on access to top mechanical equipment as well as
coaching, but I wonder whether this isn't increasingly the case in all
sports, with the ever expanding levels of pro coaching available
practically from pre-school ages?

Erik Harken Pinky • 4 days ago
I think you’re on to something. Access to great coaching, therapy, and a general caring support structure make all the difference. There’ve been
many studies that show upper class athletes are more likely to succeed
in pro sports than working class

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