We saw the exciting debut of the new CAMS Australian S5000 single seater championship at Sandown Raceway over the weekend. The S5000 is owned by the Australian Racing Group who also own the Australian TCR series and will manage the New Zealand TCR. Also in their Australian portfolio is the Touring Car Masters and TA2 (muscle cars). Last week we had the announcement that ARG had beaten Supercars to the tender for the fifth event at Mount Panorama, Bathurst.
So what’s the ‘Go’ with ARG and Supercars. What are ARG’s intentions, who is the ‘money’ behind ARG, are they likely to purchase a controlling stake in the Australian Supercars?
To get some more understanding of this I asked Talkmotorsport’s Australian correspondent Richard Craill the following questions.
1/ The Australia Racing Group (ARG) appear to be gathering some very desirable categories, but they haven’t got the pinnacle of Australian motorsport, Supercars. Should we expect an attempt by ARG to buy a stake, if not a controlling stake in Supercars?
THIS IS, literally, the million (or several tens of) dollar question at the moment. The rumour mill is rife with comments that ARG’s backers have already tried to buy Archer’s share of Supercars in the past, only to be rebuffed – but it’s mostly all hearsay and we’re unlikely to ever know the real truth. Suffice to say, it’s reasonable to assume that they, or people associated with ARG, have tried to get hold of it at some point before ultimately deciding to do their own thing. Speculation only, however, so on this basis your guess is as good as mine.. and anyone else’s.
1a/ Does Archer Capital want to divest their investment in Supercars and are ARG looking to make a bid for their shares?
ARCHER have been quite clear that their stake in Supercars is up for grabs but only for the right price point. They’ve had a good time of it but are divesting themselves of major investments, like Supercars, so while there isn’t a ‘for sale’ sign on the door at the moment, it’s not, not for sale – if you catch my drift. If you and I put together a few investors and came up with what Archer want for their share of the sport, then we could absolutely grab it. But my pocket money doesn’t quite stretch to that just yet!
2/ Who is the money behind ARG, as there must be quite a bit of capital expenditure taking place particularly with the establishment of TCR and S5000.
THE MAIN man is Brian Boyd, a Sydney developer and businessman who has long been a motorsport fan. Brian is a behind the scenes kind of guy and rarely, if ever, makes public appearances and never fronts the media, preferring to leave that to his right-hand men like John McMellan and ARG CEO, Matt Braid.
Those two gents, in particular, are very experienced in both business and motorsport, respectively – with crossover in both. John McMellan ran Wilson Security (hence all of the motorsport branding that company enjoyed for a very long time) up until last year while Matt Braid was at Supercars for some time running that business. They’ve also assembled solid motorsport people operationally, too.
Liam Curkpatrick, who manages a host of different categories and events, manages the admin of TCR Australia while they’ve recently signed former Australian GT Category Manager Ken Collier to head up operations and look after things like the Bathurst 6 Hour and, we can assume, their new Bathurst event. There’s a lot going on but it seems like they’ve made good calls and got the right people in place to make it all operate as smoothly as possible.
As for expenditure… how long is a piece of string? It’s impossible to know what they would have spent to this point, but not that hard to work out. It’s obviously seven figures, if not eight.
The biggest thing worth point out, however, isn’t the initial capital expense of getting everything up and running, but moreso the longevity and how long they wish to keep doing it because as some point, their various properties will need to stand up and service themselves.
Events they’ve acquired already do: Touring Car Masters and the Bathurst 6 Hour wash their own face, financially, so aside from the cost of purchase will require little investment.
TCR and S5000 will need to be helped along until they become sustainable which will probably take three or four years, at least. But the biggest cost is always in establishing – once they are up and running the costs involved in supporting and growing them should come back.
It sounds like a lot of money, and it is, but when you consider the Shahins have spent more than $120m building The Bend Motorsport Park, it’s actually not an enormous amount to achieve what they have already got in just a short space of time.
3/ Can we compare and contrast the present ARG situation with the Procars initiative launched by Ross Palmer a few years back?
INDIRECTLY. There are some similarities to PROCAR, which evolved out of a group of disparate categories in the late 1990s and lasted until 2004. Both ran their own classes and both ran their own events, though PROCAR had some crossover with Supercars at key events as well.
I think the obvious difference is in leadership: Ross Palmer was a lot of things and one of them was a very ‘hands on’ boss and perhaps PROCAR needed someone a little less involved to steer the ship. Certainly, ARG are structured differently and will be aware of how things have worked out in the past with other series and categories that have tried to do it on their own.
What’s more, the ARG product is intrinsically linked with CAMS – the Australian governing body is very keen to see what they have to offer work and work well. They’re involved in the fifth Bathurst event and in the promotion and operation of the key events that TCR Australia and S5000 compete on, whereas PROCAR did their own thing – which of course adds further financial risks.
The market is very different now to what it was in 2000-2004 so while on paper it looks a bit like PROCAR Mk. II, there are key differences in structure and operations that stand this apart.
4/ Ideally, does Australian motorsport need Supercars, TCR, S5000, TCM and TA2 on the same dance card, all at the same events?
THIS is where you’ll find some division between parties because while some think it would be better for everyone to be loved-in and on the same program, others either don’t want any crossover, or want a balance.
I’m in the latter camp. I think TCR and, especially, S5000 would and will add value to major events; which is why the Grand Prix has snapped them both up for their support program. S5000 in my opinion should absolutely be on the Gold Coast and Adelaide Supercars events – two tracks with a great open wheel pedigree and history that would suit them to a tee. I reckon S5000 should be in Darwin, too, because that place and circuit would go off for them.
But at the same time, there’s real value in Australia having a sustainable and productive ‘second tier’ championship tour on which these categories headline. Sandown last weekend was proof, with some 11,000 people attending across the weekend and strong TV ratings.
There’s only 13 Supercars events in Australia, so why not have five or six other stand-alone meetings headlined by ARG categories that can do their own thing? It gives other categories a chance to bask in their limelight and circuits that may not have a Supercars round – Phillip Island and Queensland Raceway, for example, next year – a chance to get a major-ish event and put on a show to get people through the gate.
This realty is one of those situations where that Taco TV ad is on the money.. ‘why can’t we have both?’. Hopefully there’s some common sense and we end up with a 18-20 event program in Australia, between Supercars / ARG / Bathurst that can give everyone a go on the big stage and still offer a program for those who can’t afford a Supercars berth, or don’t want to be there anyway.
5/ Where does TV rights come into this, and are Archer Capital waiting for this to be determined?
WHETHER Archer are waiting for the next lot of TV rights to be signed before selling or not, we won’t know. But they will be critical to the future of the sport because it’s the financial backing that will underpin the next five or six years of it all; therefore giving prospective buyers a chance to know what they’re getting into and where and what the future revenue is. TV ratings at present are very strong (up about 15% year on year), especially on FOX Sports where a bulk of the funding comes from, so it will be an interesting period to see where it all lands. But I don’t think it’s be-all / end-all for the sale of the category and it’s future direction at this point.
6/ Has the delay in the Supercars Gen3 chassis until 2022 anything to do with a potential sale?
UNLIKELY. This is more around making sure they get the right package that can be sustainable for a long-term future. Gen3 will underpin the category thorough the balance of the decade so they need to get it right from a competition point of view, from a technical parity perspective and also in balancing the market relevance-versus-entertainment package mix they need to find.
Then there’s things like future Hybridisation, Energy Recovery and green factors they need to work out, as well as cutting a chunk out of what it costs to build and run these cars. So there’s no point rushing it. Supercars have parachuted in John Casey to headline this project and he’s a guy that will be methodical and considered in the process and making it work for as many of the parties involved in possible.
Again, however, it will be key to have something good put together to build confidence in the long-term sustainability of Supercars for any potential sale. If the Gen3 package misses the mark it’s not going to be good news – so they have to get it, whatever it is, right.
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