GBmoto BSB team feature. The real cost of racing.

Following the first round of BSB at Brands Hatch at the weekend, where GBmoto walked away with both of their riders in the top three of the championship standings, we thought it’d be good to take a look at a feature we printed in the magazine a couple of issues back. The piece tracks the journey that Mark Smith Halverson – GBmoto team principle – has been on since he started the team just three years ago.

Ever wondered just how much it costs to put a two-bike team at the sharp end of a BSB grid? Not what your mate up the pub thinks it costs, because he knows a guy that bought a set of forks off eBay that came out of a ten-year old superbike. We’re talking about this season’s costs. Actual money out of somebody’s pocket that’s been spent to brighten up 12 of your weekends, in an effort to win a nice trophy. No guarantees of winning, no surefire routes to success. Racing is like gambling, with pain and victory added in unknown quantity. 

Mark Smith Halverson is the team principal at GBmoto Racing. For 2014 they’ll be fielding a Kawasaki backed two-bike team in BSB with James Ellison and Chris Walker. Mark handles the finances of the team; he costs everything, finds the money and pays the team’s way. His day job as the MD of a City based foreign exchange broker means that he isn’t shy of working with big numbers, which is handy. Mark talked me through the evolution of his race team from a brand new Superstock effort in 2011, right up to the sharp end of the BSB grid this year. I wanted to know just how much it costs to go racing – nothing was off limits. Swallow that mouthful of coffee, there’s a good chance it could end up in your lap.

“If 2014 Mark met 2011 Mark now and was able to offer one piece of advice, I’d say to myself “buckle up, you’re in for a rough ride.” I came to racing with two clearly defined goals. One was commercial and the other sporting. I definitely wouldn’t be doing this because it’s a great business venture, because it’s a lousy one. How do you make a small fortune in racing? You start with a large one. I know I am never going to make pots of cash by racing bikes, but the fight, the battle and the goal is to get it to the stage where the team is looking after itself financially. I could run a two man support class team and maybe even make money, which is I guess what a lot of people set out to do? But I am focused on big sporting goals, so then you end up with, will do more, and will move on. You have to spend money to move up. Whether you spend it wisely or not is another matter.

This is my fourth year of this project. We started in 2011 in Superstock 1000, thinking it would cost about a quarter of a million quid to do the season justice. That’s starting from the ground up, with nothing. No work shop, no trucks, no bikes, we didn’t have anything. We set out knowing that our year one costs would be larger than year two as we had to build the framework for the team in year one. It ended up costing £375’000, about fifty per cent over what I thought it would be. When we started looking at things like trucks, working kit and the spec the bikes needed to be built to, we realised we needed more than we first expected and it goes on and on and on. We did the right thing, we did the best job and it cost me more than I anticipated. Probably of that fifty per cent overspend, the costs were all attached to just doing the job right. I originally said to my wife that I’d cover the costs with about eighty or ninety per cent sponsorship. That was before the overspend and all in, I got about £125’000 in sponsorship, way down on what I anticipated.  Looking at the accounts at the end of that year, I realised that although we had spent a lot of money, I was happy with the job we did and what we had built. In terms of sporting goals, I think we did really well; we won four races made a big initial impact in that series and featured in the championship, despite some big decisions going against us. I do remember feeling guilty that I’d spent so much of our personal money and put myself so out of pocket. I think some feel I have it easy because I have another successful company, but the sponsorship I receive from the company I work for, is exactly the same as any other sponsorship deal. I pitch to the business and if I’m successful, we agree a fixed amount and that’s it, no more. I took that guilty feeling and just get determined that I would ratchet the sponsorship up in year two. All in all it was a good first step in the right direction.

In year two, we knew that we could go and try and win the Superstock 1000 championship. If it wasn’t for the fact that the EVO regulations in BSB were coming into effect, we’d have probably stayed in Superstock and gone for the title. A move in technical specification in BSB meant a more level playing field in terms of the bikes. The big class then seemed affordable; we felt we’d be missing out if we didn’t move up. Looking at the commercial effect, it meant that we had to massively reinvest in the business of racing and I budgeted half a million pounds. If we had stayed in Superstock with the two-rider team that we had, our year two costs to try and win would have been £200k. But, it obviously didn’t turn out like that. We spent a quarter of a million quid building two superbikes and getting the right kit together, and then we spent another £400’000 during the season. We did all the right things in terms of how we operated; I collected about £200’000 in sponsorship. If you were to say amongst the BSB paddock “I have a British superbike team and I’ve secured a £200k in sponsorship”, most other teams would say “F@$k me, you’re doing well”. But when you look at the outright cost of Superbike racing, you can see you need a lot more money. All that money got me 25 points from 27 races, from a sporting point of view, despite all of our best efforts, we got absolutely nowhere.

At the end of 2012 you could see we were lacking in a number of areas. We had moved up to the Superbike class with an Endurance/Superstock team of people and we had no Superbike experience in the team in terms of personnel. It was a massive first learning year in BSB and that more than anything affected the results. It was stressful for me because I could see what I was spending on it. I could also see as the season progressed, more and more of what we weren’t doing right and I could see the results we were getting on track. By then the team felt like it had turned into a big ship, it was really hard to stop it or turn it around in order to deal with the problems that we had onboard. There was a real turning point for me, after race two at Brands Hatch. A good friend of mine was on the team, he’d been a great spanner man for years with us. We sat down and he said “look, we’re doing what we can, but we don’t know how to do what it is that needs to be done. You need to get rid of us and find the right people to do this job.” In a lot of ways it made the decision making process for the following year a lot easier. I had sponsors asking me what was going on, what was going wrong and how was I going to deliver better results? People out there think that sponsorship means enjoying some nice hospitality and taking in the racing with a glass of fizz, but there’s a lot more to it than that. You have two types of sponsor, the engaged and the unengaged, they both have pros and cons but the engaged can be much harder to manage when the results aren’t forthcoming. They’re involved because they have a real passion for the sport so they want to know more. The pressure of walking back into the hospitality unit after race one and seeing fifty expectant faces looking back at you is very stressful, especially when one of your bikes is upside down in the kitty litter and the other has finished fifteenth. It’s not easy. The last race of 2012 typified the whole season. Bikes blew up, bikes crashed, the results went missing and I was spending lots and lots of money. Our performance was way down on where I wanted it to be and I felt awful, knowing  we’d achieved a lot more at the end of season one, than we had in season two. I was determined to turn things around, I felt that I knew how to achieve what we needed too, but my deepest fear was that the sponsors would head for the hills and we’d have to start all over again. That was my darkest hour.

That triple-header, the last round of the season when you’re having lots of  ‘those’ conversation with sponsors and various people about the following race season. From a financial point of view, the stress was weighing heavily on me and I really feared the worst. However, as those talks progressed, I was stunned by the loyalty shown to both myself and the tem. We replaced a couple of outgoing sponsors with new ones and we received the shot in the arm that we needed for a positive 2013. People weren’t leaving us.  Our title sponsor (Lloyds British) was absolutely great. Their loyalty was and is key to us, it meant so much more than just the money.

One of the positives about the sponsors we had was that they could see what we needed to do for 2013 and rather than shying away (after a lackluster 2012), most actually put more money in. For 2013 we changed virtually everything. Aside from myself, our team manager and a couple of mechanics we changed everybody. New electronics and chassis people, two new crew chiefs, three new mechanics, new truck driver the whole lot. We spent money on wages, effectively. In 2012 most people in our garage weren’t being paid. We looked after them well, put them up, fed and clothed them, but in 2013 everybody got paid a wage and some were on a decent salary. Our overall spend in 2013 was down on 2012 because we didn’t have the huge bill for building the bikes from scratch. We probably spent £550’000, with about £250’000 coming in from sponsors.

You look at the Tycos and the Milwaukees and all the top-flight teams and you see the size of their operation and you think “Sod all that hospitality and marketing glamour, I’m only here to win the championship”. But as the thing progresses, as the bills get bigger and as the expectations grow, so the game changes. In actual fact, it’s the people that surround the bikes that matter as much as the bikes and the riders. I now look at the BSB paddock as an employment marketplace, if you want to attract the best staff you have to look at how to attract them. They too look at the paddock and think, “I need to earn this amount of money to do this, but I also want other things as well – team feeding, proper kit and a hotel”. If they don’t think they’ll get those things from you, they will go and look for a team that will give them that. In 2013, we started team feeding halfway through the year and I can remember seeing an immediate lift in morale in the garage, they felt like part of a ‘bigger thing’ and it galvanized them. The glitz and glamour that race fans see looking over the fence is exactly the same as what appeals to the guys that work in the paddock. I have worked out that it’s important to get that stuff right. Honestly, when you bring out the new team wear at the start of the year, you’ll see the only orderly queue your team will make all season – whilst the boys line up to collect their kit! They love it and I love them feeling proud to be part of what we do.

We saw an immediate uplift in our results in 2013. I think the team performed exceptionally well last year, really well, but I don’t think the team got the results they deserved. It’d be fair to say that our results would have been measurably better last year if we weren’t running Hondas. There are Hondas and there are Hondas in this world and although our bike was becoming more and more competitive, it wasn’t good enough to trouble the front runners. Some other good stuff came out as well; I think we raised the profile of GBmoto in the paddock and the series. We certainly raised it enough to start direct communication with manufacturers as early as July.

So what I haven’t had yet is a consecutive year where I have had everything in place and a clean run at the job. 2014 is going to be another very expensive year, but we’re not an inexperienced team anymore. We’re with a new manufacturer, so getting things to work as well as they can do straight away is the challenge. There’s nothing to say that our Kawasaki can’t win the championship. We’re spending the right money on it and I think we’ve picked the right technical partners. We’ve got the right personnel and we’ve kept the continuity in terms of the team that we built last year. The look and feel of the team has been where it should be for some time and the shot in the arm that we had at the end of last season was nailing the deal with Kawasaki. It was a mutually beneficial agreement. They made it clear that they saw us a good way forward and we did the same with them.

Now we’re in the process of building two new machines for the 2014 season. By the time they’re done, with new wheels and discs on the racks, they’re about £110’000 a pop. So, you’re on close to a quarter of a million just for the bikes. I think that to win a BSB championship in 2014, for us will take around £750’000. That’s not to say we will, but I am quite sure that if we spend the money right and have the right luck, do the right job, then we will be in the hunt – pretty good from a standing start just over three years ago as I speak and the sponsorship income has grown again too.

In terms of riders, the package that GBmoto’s 2014 riders are on (including bonuses) is everything that people assume it would be, a good income. My professional experience tells me that if you want someone to do a really good job, you have to pay them a good wage. In general I believe that more riders should be getting paid, it’s sad that this isn’t the case. I have paid riders from the very first day I walked into this paddock in 2011. Not many people can say that. I’ve paid riders £15’000, they couldn’t win championships. I’ve paid riders £25’000 and they said they could do a certain job and it turns out they couldn’t either. Now I’m paying my riders significantly more with the expectation that they can deliver the wins that I’m looking for. Even now though, looking back, I don’t think that I’ve done the wrong thing and I don’t regret paying any of them. Pay in motorsport is mad because in general the people doing the hardest job (the riders) are being paid the least amount of money across the board. It’s ironic that a mechanic in a top flight Supersport team can have all his expenses paid and walk away with a with a few quid in his pocket, but the rider is expected to put thirty grand on the table to get on the bike?

We all go racing so we can be successful, pick up some trophies and prove how good we are. If you disregard all of what we’ve done and just look at it like a business, there are no shortcuts. You only know when you’ve got the right people when you’ve experienced having the wrong ones. We’ve learnt everything the hard way, but rather than miss the experience, I’d still go back and do it all again. If we win this year, you’ll need to wake me up somewhere at the bottom of Paddock Hill, I’ll have a hangover that’d drop a donkey. But if we don’t get the results, my goal of winning it from a standing start within five years is still viable. Is 2014 the best chance we’ve had yet? Most definitely. God knows what the accountant is going to say when they read this – worst thing is, it’s my wife…”

 

Costs:  Based on the books for the 2013 season.

Testing: £10k a day

Racing costs: £120k race fuel, tyres, brake pads, chains and consumables. £45k of that was spent on crash repairs

Bike parts: £100k worn out fairings, fractured wheels, holed radiators and motor refreshes.

Cleaning materials: £10k on brake cleaner, rags and other consumables

Wages: £135k for the team

Team travel costs: £35k, most of which was on diesel for the truck.

Team costs: £10k training and meetings with the team to plan the flow of each race weekend

Team clothing: £7k

Marketing, hospitality PR and media: £45k

Premises rent and rates: £20k

Accountancy, server and web costs: £10k

New race truck: £150k

Follow the team here: www.gbmoto.com

 

Words: @Johnatsuperbike