Are technical alliances worth the pretty penny teams spend on them every year? Former NASCAR driver Landon Cassill wonders if they truly are, calling them “Black holes of unnecessary spending.”
Not every NASCAR team has as many resources as others, be that sponsorship, money, technical support, or other resources. To try to help bridge that gap, teams form technical alliances. Smaller teams pay a fee to larger teams for access to technical data.
For the smaller teams, it’s about finding a way to obtain some of that extra data they cannot gain. For larger teams, it expands their footprint as more teams share information, which means more data points and gives these larger teams another revenue stream.
These can be particularly helpful to teams just starting out. 23XI Racing joined the sport with a technical alliance alongside Joe Gibbs Racing, and the team out two cars in the Playoffs in just its third season of competition. Stewart-Haas Racing started forming a technical alliance with Hendrick Motorsports in 2009, and SHR won a Championship two years later.
However, these alliances only make sense for bigger teams as long as the smaller teams don’t start outperforming them. HMS and SHR soon ended their technical alliance after SHR won its’ Championship.
There is one instance where the end of a technical alliance potentially contributed to a race team shutting down. Furniture Row Racing and Joe Gibbs Racing formed a technical alliance in 2016. After winning the Cup Series Championship a year later, FRR discovered that JGR would hike the price of the technical alliance. This, combined with losing 5-Hour Energy as a sponsor, preceded the shutdown of Furniture Row Racing.
A technical alliance is not an automatic win button for race teams. Teams like The Wood Brothers, Front Row Motorsports, and Rick Ware Racing all have technical alliances with bigger teams, but none of these teams have come close to a Championship.
The instances of FRR and SHR also show that they are not a permanent solution. If a team wants to be a sustainable Championship contender in NASCAR, they must eventually stand independently. Legacy Motor Club, for example, does not have a technical alliance despite being a “Tier One” Toyota team, with the hope that, in the long term, they will learn how to succeed with the resources they have instead of relying on someone else.
As we’ve already seen, a technical alliance is often necessary for smaller teams to remain competitive. This means more money is spent in other areas, and the alliance can be taken away if the larger team doesn’t see its value. Cassill suggests that this investment is a “Platform risk.”
That’s the tug-of-war that NASCAR and the teams have to fight. A technical alliance means more money goes elsewhere, but it’s going somewhere absolutely necessary for many teams to stay competitive. As a result, there is less money left over for other areas, and this raises the overall cost of racing.
It could also be taken away from race teams at any moment and could be devastating for that team. Taking away a boatload of data overnight means the team has fewer resources to work with, which will hurt performance.
However, as Cassill points out, this has no easy fix unless NASCAR outright standardizes everything teams spend their money on and all the data teams can obtain. That’s impractical, and it would not fly with every team owner.
At the end of the day, this is the way the business is for now. Will it last forever? We will see.
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