Is Ricky Carmichael the best bargain ever in motocross? When a company pays a rider for exposure and race wins and said rider wins nearly every race he enters, what more could the company ask for and can it possibly pay him enough money to settle the score? As proven by the New York Yankees, sports teams can buy all the talent in the world but talent doesn’t always guarantee championships. So when a highly paid talent goes out and wins every single event and championship for a consecutive number of years, what amount of money actually justifies all the victories, exposure and eventual sales? The possibilities for figuring out this formula are endless, and answering the above questions may be impossible because the bottom line is that it’s something not many people have really thought about, Mr. Carmichael included.What a Bargain
“But Ricky Carmichael probably makes closer to eight figures a year than he does six, that is, if he’s not already making more than $10 million. How is that a bargain for anybody writing checks that big?” a friend of mine was arguing. I was trying hard, though unsuccessfully, to explain how celebrity connections are worth their weight in sales and good will.Most people cannot accurately say what they’re worth to their employer-not in terms of bank accounts and stock options-but on a cost-effectiveness basis or, plainly, calculating how much money the company will make every time you write another memo or TPS report. In motocross, it’s figuring out how much money Suzuki, Fox, Oakley, DC Shoes and others will each make back in sales and exposure for every lap Carmichael leads, every race he wins, every championship he brings down and every magazine cover he graces. Look at the sheer volume: 13 national AMA titles in nine full racing years and 128 AMA victories through the 2005 U.S. Open of Supercross. Carmichael is the Sam’s Club of motocross-everything he does comes in bulk, and there’s never been a better bargain.”Ha! I never really thought about that…. I think the sponsors are getting a good deal,” Carmichael said when asked if he considers himself a bargain to his sponsors. “If you go by what other riders are being paid, and then compare my results to theirs, then, yeah [it probably is a bargain].” Those results in ’05 alone include eight AMA supercross victories (including the U.S. Open) and 12 AMA motocross wins. Throw in the two world supercross races in December ’04 and the double-moto sweep in France at the Motocross des Nations, and Carmichael has won 23 of the 32 races he entered from December 1, 2004, to December 1, 2005. In that same time period, his well-compensated competition won nine races combined between three riders: Kevin Windham, Chad Reed and James Stewart. David Vuillemin, a consistent top-five finisher in ’05, won zero.”I don’t know that he’s a deal, but he is being paid what he deserves,” former four-time AMA champion David Bailey said. “I don’t think Suzuki can sell enough bikes to pay Ricky Carmichael. Units sold for salary alone isn’t worth the investment. The investment is that Suzuki is a good place to be now. Look at the vibe in the Suzuki pits since RC came there. Do you think Tedesco would have gone there without what Carmichael has helped build?” Carmichael’s yearly compensation at Suzuki is rumored to be a straight $4.7 million, and his bonuses are already figured into the deal. His previous contract at Honda was said to have been $2 million a year plus race and championship bonuses, of which the latter equated to $1 million a title. Given the amount of races and titles he won at Honda, it doesn’t take “new math” to figure out that he could have made more money by staying red. But Honda wouldn’t match Suzuki’s front-loaded salary program for his new ’05 contract.”Honda second-guessed RC,” Bailey said. “He was thinking and maybe even telling Honda that he was going to win, and Honda wasn’t so sure. If you don’t believe in Carmichael, he will tell you to get screwed. Never turn your back on RC.” Even if Carmichael is an up-front expense to Suzuki, nothing compares to how many aspects of its business model he covers. His compensation, knowledge and experience is spread throughout and pays off in the public relations, advertising, marketing, sales, research and development and racing departments at Suzuki, making him, and any rider who can win that much, the most valuable write-off a company could ever have.
“Look at Nike,” Fox Racing’s Motocross Media Relations Manager Warren Johnson advised. “Do you think it can justify spending $80 million on a kid right out of high school to wear its shoes in the NBA? There are so many variables that go into figuring out how much to pay athletes, but what it truly comes down to is branding, heritage and winning.” And it’s especially true in the racing world. Racing equals prestige, and even though Suzuki’s unit sales numbers aren’t as high as Honda’s, both companies still want to beat each other come Sunday. Suzuki may be Ricky’s bread and butter in the finance department, but on a smaller level, a little piece of real estate on Carmichael’s helmet isn’t going to be cheap. One company’s inquiry to get a sticker on his helmet for the year yielded a price tag of $300,000. That might actually be a small price to pay considering he was on enough magazine covers to span every single month in the ’05 season. Some months he was on multiple covers.So does Suzuki know what Carmichael alone has done for its program in terms of raw data? A source close to the OEM’s advertising department said it would take weeks to determine exactly how to calculate the growth in sales based on one rider’s exposure and victories at the races, magazine win ads, articles, covers and all that. Even then it would be hard to tell how accurate such information would be. What is certain is that Suzuki’s fiscal year ends March 31, and the ’06 annual report will reflect the sales growth during Carmichael’s first full season with the yellow squad. The company’s ’05 annual report says that overseas sales of motorcycles (including ATVs) grew by 30 percent over the previous year, reaching 2,794,000 units, for total worldwide sales of 2,924,000 units, a 128 percent increase over the previous year (these figures include scooters, a market where Suzuki is very competitive). But motorcycle unit sales across the board have been steadily increasing for more than a decade, so it will be interesting to revisit this topic come April ’06 to see if there was a giant spike in the motocross department.Number crunching aside, Suzuki executives were just happy to be able to say there never was a curse. “When Ricky won the first championship (SX), he really made it clear that Suzuki didn’t have a curse, that it really was a good company to ride with and we have a good bike,” said Mel Harris, American Suzuki’s executive vice president. “Two years ago, we knew how good our bike was and we needed to get a good rider. When we were able to put those ingredients together, we were able to win the championship. So it all came together this year.”Disproportionate Wealth
Michael Jordan and Charles Barkley were on an episode of “Oprah” and when the conversation turned to what it was like being an athlete in professional sports and the money they made. Barkely simply said, “It’s great, the best.” Oprah responded with, “Yeah, but I think it would be more glamorous to be a rock star.” Jordan was quiet for much of the beginning of the conversation but during this topic he piped up. “To be a good, high-paid musician you first actually have to be good. In professional sports, you get paid based on potential. When Barkley and I were coming up, we had to earn the big money.” The money being paid out to some athletes is disproportionate to what the rest of the team receives, and when that top-paid star doesn’t deliver, the whole franchise suffers. In the motocross world, critics and fans love to grumble about what they feel are the number of underpaid and overpaid riders.Is it possible to recognize Ricky Carmichael as both overcompensated and monetarily underappreciated? “Given the success he’s had as a top athlete in his sport, the number of races competed in and number of victories and championships produced, yes, he is probably significantly underpaid if you put him up against a comparable athlete in a stick-and-ball sport. If you can even find such an athlete,” Johnson said.In Jordan’s game, salaries and shoe deals have gone through the roof while the level of play, attendance and television numbers haven’t. In motocross, while one rider has won the majority of the races and championships in the past nine years, more riders are being paid handsome salaries in anticipation that they do win. “Chad Reed, James Stewart and Kevin Windham are all richer as a result of Carmichael’s hard work and wins,” Bailey said. “Beyond that it’s a joke. But that’s the way it is, just as a gallon of milk will cost more in two years. RC has lifted the pay scale in motocross, and the rest of the riders are trying to make the kind of money he is and command that much respect.” Bailey says it all happened when Carmichael signed his lucrative deal with Suzuki while still recovering from knee surgery. When his competition caught wind of the deal, they wanted a piece of the pie from their respective employers.
Carmichael won’t disagree that he’s comfortable but said he has no reason to get caught up in dollars and cents and frivolous spending while he’s still racing. “When I was 19 or 20, I thought a lot about money,” he said. “It just gets you nowhere. I feel I deserve to be taken care of. If you execute your goals, win races and take care of the sponsors, then you deserve to be taken care of.”Suzuki team manger Roger DeCoster has never been more proud to do his job. “He is the most dedicated guy I have ever worked with,” DeCoster said. “He keeps things simple around him and he works very hard. He wants to win as much on Mondays as he does on race day.”Why We Are Not NASCAR
While Fox’s Johnson said Carmichael is underpaid when comparing performance statistics with athletes in other sports, he continued by saying it doesn’t hold up when comparing the amount of exposure motocross gets against NASCAR and the NFL. Even the original airings of some poker events on television rate higher than motorcycle racing on TV. Since people like to talk about the popularity of NASCAR, here are some numbers to ponder taken from Business Week and Time Magazine articles. The average attendance for a NASCAR race is 186,000. The average rating for a NASCAR race on Fox is a 5.1 share, or just over five million households. The ’05 Daytona 500 scored a 9.8. The 5.1 average is double baseball’s rating and about half of the NFL’s on the same network. The ’05 Super Bowl attracted a 41.4 share. While supercross has pulled down 3.5+ ratings in the past on ABC, that is on a network that is available to more than 100 million households. Ratings during the rest of the racing season in SX and MX are well below 1.0. And though the Speed Channel airs a lot of NASCAR programming, you can’t find the actual races airing there because Speed doesn’t have near the household availability as Fox and TNT. Until MX and SX are consistently available to that many people it’s hard for Madison Avenue to justify investing in the sport. That’s why supercross’s leaving ESPN and moving to the Speed Channel and acquiring select dates on CBS is a step in the right direction. Outdoor motocross will soon follow, especially with the recent partnership with Toyota trucks.So if Carmichael’s success-to-salary ratio is a bargain to his sponsors, is his domination a burden to the sport? Last summer, it wasn’t a question of whether he would win, it was how much would he win by. Carmichael is fun to watch on a bike, but he will be the first to tell you that he craves the competition and challenge. Take away that anticipation in a sporting event and it’s not very exciting. “I think everyone wants this sport to be like NASCAR,” Carmichael said. “But do you know for sure who to put your money on for any given weekend’s race (in NASCAR)? The racing is tighter, and they’ve made it safer. We’re just going about it differently. In football, who would want to go to a game they knew was going to be a blowout? To take it to the next level we just need to adjust.”Last summer during the Outdoor Life Network telecasts of the AMA Motocross Championships, Bailey didn’t hesitate to say what he really thought about what Ricky’s domination is doing to the sport. The following is an excerpt from the last lap of the Binghamton, New York, race (round 10): “Let me just say that Ricky is doing his job. You can’t blame the guy for trying to win races and all that, but I’m over it! As soon as James went down, I kind of wanted to leave the booth. And I think the fans are the same way. I got to watch Michael Jordan play five times. I don’t remember if they won all those games, but it didn’t matter because I got to see Jordan play. That’s the way it is when you get to see James ride or Kevin on a good day or Ricky every day of the week. The racing is what makes the sport, and right now there isn’t any. RC wants competition.”If there is a way to make the racing better without telling Carmichael to slow down, nobody has figured it out. RC can be beaten, as proven during this year’s supercross series, but the number of riders who actually can beat him can be counted on Bart Simpson’s left hand. “Supercross needs to be better for the guys who have less of a chance,” Carmichael said. “That’s where Clear Channel is a failure of its own marketing.” RC is referring to the top four riders getting their faces plastered on the advertising and media guides. In the ’05 season, those four riders were the only competitors to actually win races during the AMA SX season, with RC winning about half of them. To outside media and companies, this strategy makes it seem as if there are only four competitive riders on the track. “The best guy is always going to win, but the tracks need to be better, easier,” Carmichael continued. “It will make the racing better and cut down on injuries.”Carmichael has dedicated his life to getting faster and making those around him do the same, and he isn’t going to apologize for the amount of money he makes or the way he has dominated the sport. As Bailey mentioned earlier, Ricky is “just doing his job,” and he knows that his runaway victories don’t make the sport more exciting. “In a way, it helps, and in a way, it hurts because people come to see competition,” Carmichael concluded. “I’ve always won or done well, and not all of those races were as exciting as I would have liked them to be. A boring race is good for somebody, but it’s not good for everybody.”