Gossip Moves The Market: How Rider Managers Maximise Earnings

Picture the scene. The sun is setting over the hills that surround the Circuit de Barcelona-Catalunya. The day has been fierce and the weekend is only going to get hotter. Keeping a cool head, keeping your eyes on the prize will be crucial but all you can hear is talk of chatter.

Chatter is a paddock keyword. You hear about it all the time. You hear it a lot more in June because this isn’t chatter on the bike. It’s chatter inside the paddock.

Rumours become fact very quickly in the MotoGP and WorldSBK paddocks. All it takes is a chance photograph for a story to suddenly have legs and suddenly half the paddock is running around and chasing their tails looking for quotes and concrete information.

The rider market. The silly season. The rumour mill. The fools errand. Trying to keep abreast of the market is an important part of paddock life. Rumours are currency and having good sources gives you a lot of information to trade with people. Trying to report it? If you’re hitting more than you're missing it’s a very good batting average, and people remember the wild swings more than the home runs.

Talk is not always cheap

Paddock rumour becomes currency so the leverage they create is crucial. Column inches create pressure. Just like deadlines spur activity so does chatter. If the rider you’re desperate to sign is talking to other teams, suddenly it becomes imperative to get a deal done quickly. The easiest way to do this? Offer more money. The same works in reverse. If a team is talking to multiple riders the money side of the offer may become less important if it’s the best bike for a rider.

Every second summer is typically when a rider’s manager earns their money. They need to understand the lie of the paddock and they need to know how to play the game. A cup of coffee with a rider manager at this time of year can be worth its weight in gold. You can find out a lot of details about the who, what and when and then use this when talking to other people.

A cup of coffee with a team manager at this time is much the same, but instead of feeding the information the team boss will be prodding. They’ll want to know what’s being said. What correlates between these conversations and what stands out like a sore thumb? The middle ground tends be safer territory than the extremes. It’s probably best to take the coffee with a spoonful of salt rather than sugar for all the truth in the conversation.

A global pandemic has pumped the brakes on racing but it can’t put a stop to the chatter. Riders still need to be signed. Futures need to be secured. The world will return to normal soon and teams have to be well placed for when it happens. Contracts haven’t been put on hold and deals still need to be done.

Options are important

A good example of this was Alex Lowes re-signing with Kawasaki in WorldSBK. Having worked with the Englishman throughout the winter and seeing him win a race at the opening round of the season in Phillip Island it was an easy decision to retain him for 2021. When the news broke the story became “why the hurry?” There was no sense of surprise that Lowes had been extended, after all there was always rumoured to be a 1+1 deal in place. Surely the more pressing rider to extend is Jonathan Rea? After all, the serial champion is out of contract at the end of this season.

Most contracts have options and clauses. The 1+1 nature of most contracts is that you sign for a single season with the second year optional. In most cases this will be nothing more than a formality. For Lowes and Kawasaki this was likely the case. It was also likely that the second year option had to be agreed by both parties early in the WorldSBK season. It would protect the team and the rider.

If Lowes had jumped on the Kawasaki and immediately felt it was unsuitable for his riding style - for instance, what happened with Jorge Lorenzo at Honda or Johann Zarco at KTM - the thought of two seasons would have been tough to stomach. If the team had started to work with Lowes and suddenly felt that he didn’t gel with the Provec Racing way of life, a second season could have been disastrous.

The right fit

This is a team that is built on success. They’ve never been afraid of friction in the pit box but only if results are being achieved. Having an underperforming rider causing an issue wouldn’t be palatable for the Roda brothers. It’s always best to protect each side and have an option for Year 2.

Lowes' contract was confirmed in late May. Based on the original WorldSBK calendar the team would have had at least five rounds, and a winter of testing, to see if they were happy with their new rider. For Lowes he would have had the same length of time to see if he was happy with the new surroundings and the Kawasaki.

The goal for an early re-signing date was to ensure that if either party wasn’t happy with the partnership that Kawasaki had enough time to find a new rider and Lowes had enough time to find a new team. It was a sensible arrangement for both parties and reflects well on both. For KRT the goal will now shift to their negotiations with Jonathan Rea. Meanwhile Lowes can focus on his riding.

Unstable ground

Negotiations are all about give and take, but a good manager needs to be able to sit at the table with options. Having other suitors gives you power. With the global shutdown it has changed a lot for riders and teams. Contracts have been put on hold and it would be naive to think that debt hasn’t risen for many riders. During the NFL lockout in 2011, loan sharking became big business. Players with “guaranteed” money were suddenly scrambling to pay their mortgages or their car payments and taking out high-risk and high-interest loans. The same situation could very easily arise for some riders up and down the paddock.

Have a look at the news from motorsport. In Formula 1 the FOM furloughed their workers using the government scheme. Pay cuts have become the norm, and the McLaren group cut their workforce by 1200. Ferrari are talking of “diversifying” their racing portfolio so that they can keep staff in place. Change is afoot and contracts for riders are changing. If there’s no racing the terms of the agreements change. Some teams are taking that to mean that payments can be cut or held back indefinitely.

Side hustle

Most riders are feeling the pinch and with wages cut, their repayments are suddenly harder to meet, as happened with NFL players. It’s worth noting that not all teams are doing this, but most helmet and leather are deals are on hold. These are the deals that really add up for riders. In MotoGP it’s very easy to make big money, depending on who you partner up with up. Some riders will tell you that a ride in MotoGP will earn you at least €1 million a year before you even start to look at salaries.

In the past there’s always been some outlier deals in the class. Ever notice why there is only one rider with a certain brand of helmet? Usually it’s because the helmet manufacturer paid big for the privilege! The same can be the situation with leather manufacturers. These deals however are very much on a play and pay basis. If there is no racing, most deals are put on hold. For a Moto2 or a Moto3 rider these deals can be the difference between making money and paying for a ride.

At times like this a good manager becomes key for a rider. They need someone to fight their corners and come up with a contract. The wheels of 2021 are starting to spin again with the rumours of Pol Espargaro signing for Repsol Honda. In the wake of Jack Miller’s move to Ducati some plump rides are now the keys for the moves to be made. KTM need a replacement and does Andrea Dovizioso suddenly make a switch to the Austrian factory? The domino effect is huge and a good manager can make all the difference.

The devil is in the details

What makes a good manager? Getting the ride isn’t enough. It’s about the details. A lot of details are set in stone for an agent but there are still areas they can make a difference. Win and podium bonuses are broadly similar for riders across all classes. In MotoGP the typical bonus structure works on a top five basis with a win paying out €100,000 and the lowest step on the podium netting €50,000. If you finish inside the top five you’ll pick up about €10,000 for your efforts. When helmet and leather deals are included a MotoGP rider could walk away with over €200,000 for winning a race. Championship bonuses are also very similar for riders regardless of the team they sign with.

Similar structures are in place in Moto2 and Moto3 with the intermediate class paying up to €20,000 for a win. In WorldSBK the numbers typically tally €25,000 for a feature race win.

With the bonuses similar for most riders why would a rider need a manager? Why would you pay 10% to someone when details are the same for most contract? It’s because some agents are better than others at getting base salaries and additional bonuses into contracts.

Hidden money

A good manager can find the low-hanging fruit to target. What’s the minimum amount of PR days that a rider can get away with? How many interviews per weekend is too many? This is very important for most riders because media events don’t make them go faster. Can you find additional bonuses to include in a contract? Fitness tests and weight checks are easy money for a rider committed to the cause. These small bonuses can add up to a decent chunk of change for a manager’s 10%. They’re worth fighting over.

For a manager, the motivation comes from getting paid. They want to win the negotiation just as much as the rider wants to win on track. The 10% for a top deal can be the difference between keeping your company afloat or, if they work for an agency, it can be the difference between keeping their jobs.

This year, more than any, it will be important to have a good manager fighting your corner. In the coming weeks and months plenty of deals will be done in the MotoGP and WorldSBK paddocks. Deals will be won and lost on the small print. At this time of year it’s important to believe half of what you see and nothing that you hear because everyone has an agenda.

This is part of a series of articles published in partnership with RacingLowdown.com, run by MotoMatters.com contributor Steve English.

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Which riders are their own managers, and is a rider acting as a manager the same as a lawyer who represents himself has a fool for a client?
Steve. Thank you for the rider, agent, factories and teams web of intrigue explanation.

It's like anything else in that it depends on the rider. Some riders want everything sorted for them (their manager pays their rent, buys their cars, organises for everything with an outgoing) and others want a lot of independance. If you can get the deal that you want is it worth paying 10%? As riders progress through their careers and establish themselves a manager isn't as important as at the start of their careers. It's about the balance though. Gehard Berger is a good example of a business savvy racer and he always said "Why would I pay someone 10% to tell me what money I should be happy to live off? I think I'd be happier with the extra 10%!" It worked well for Berger but isn't a model for every racer to follow!

Thanks Steve, I find this type of reporting very interesting. Now that most content does not involve actual racing, I would love to read more detail and insight from you, David, Neil et al on how things work in our sport. What are the actual salaries? How many cargo containers are needed to race in Argentina? How big is the star's entourage, and who can tell them to leave the garage? Who at Audi approves Gigi's budget? You get the idea. Thanks again.