Santoroski: Anatomy of a Merger

By Frank Santoroski, Contributing Writer

While some may have been taken by surprise with the recent news that Andretti AutoSport will be absorbing Bryan Herta AutoSport into their organization, keener observers may have seen the writing on the wall.

Indeed, Bryan Herta’s team was the smallest and most under-funded team on the 2015 grid, but their efforts showed tremendous potential with Rookie driver Gabby Chaves.

Although it was a struggle at times for the team to keep afloat, they did manage to enter all 16 events on the 2015 schedule making them eligible for the Leader’s Circle payout from IndyCar, worth a minimum of 1.25 million US dollars.

Meanwhile, at Andretti AutoSport, the fourth entry completed only a partial schedule making the #25 car ineligible for the program.

Even with the Leader’s Circle money, BHA Racing is still left with a significant financial gap to fill if they intend to run a 2016 car.  The team is still left reeling in debt after defaulted payments from 2014 sponsor Energee. This situation is exacerbated amid reports that some of their 2015 partners may have defaulted on payments as well.

While the 1.25 million isn’t enough to keep BHA on the track, that amount added into the Andretti AutoSports team’s budget makes it a much more plausible possibility.

The Andretti team itself has not been immune to financial shortcomings, most notably as it was reported that 2014 sponsor, United Fiber and Data came up short with their payments. Couple this with the fact that they have come up with the novel idea of auctioning off Ryan Hunter-Reay’s Indy winning chassis, and it’s not hard to believe that the Andretti team would benefit from some additional dollars.

With the merger, the Andretti team will have four full-time entries on the 2016 grid. Michael Andretti considers this the ideal size for his team, so it is a win for Andretti.

For Bryan Herta, he gets to continue in racing, taking the role of driver’s coach and pit strategist for the #98 car. For Herta its a win.

For Herta’s team personnel, all of whom were retained by the Andretti organization, its a win. They don’t have to worry if they have a place to work on Monday, or if they will be able to feed their families. For that hard-working bunch; a big win.

For Herta and Andretti, its a win. The two former drivers have a long history. Herta was one of Andretti’s drivers during the Andretti-Green years, and the two have a mutual respect for one another.  I’m confident that the partnership will be amicable and productive.

The merger is a big win-win situation for everyone except BHA’s 2015 driver, Gabby Chaves.

Poor old Gabby got the shaft in the deal, but it wasn’t personal, just business.

Gabby Chaves won the Indy Lights Championship and was able to bring the $750,000 bonus that came with that to the Herta team to ensure a ride.  With that money now spent, Herta tried in earnest to secure a sponsor to keep the young Colombian driver in the car, and keep his team afloat.

When all roads led to a dead end, Gabby Chaves became the only casualty of this merger, with less than a month before the season begins.

The reality is, that even with the Leader’s Circle money, a paying driver makes more sense.

Chaves will begin 2016 on the outside looking in, as the newly-merged team looks for a driver that can guarantee some funding.

Various names are being bandied about, like Pastor Maldanado, Alexander Rossi, and J.R. Hildebrand. The team expects to make a driver announcement shortly after testing at Phoenix.

 

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A life-long racing enthusiast, Santoroski attended his first live race in 1978, the Formula One Grand Prix of the United States at Watkins Glen. Following graduation from Averett College, Santoroski covered the CART series through the 1990s and 2000s for CART Pages and Race Family Motorsports in addition to freelance writing for various print and web sources. He produces a variety of current and historical content for Motorsports Tribune and serves as the host for the weekly radio broadcast,Drafting the Circuits,

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