Business of Speed
The Money Behind the Motorsports Industry
By: Tim Frost
Date: October 1, 2018
There’s no stopping the weather when it comes to racing event, but a cancellation is a lot more complicated than it may seem.
This month, we will look at the impact weather-related postponements have on the motorsports industry.
Racing are live events that take place outside, and Mother Nature plays a large part on the outcome. Not just with who wins but in the events bottom line.
The recent delay in the Nascar events during the early September Brickyard 400 weekend at the Indianapolis Motor Speedway brought the topic of race scheduling to the forefront. Many activities were on tap: BC39 USAC midget race, FGL Fest, and Nascar Xfinity and Monster Cup races. All four events were impaired.
The midget races were run on Wednesday and Thursday night, although the second night ran late into the early hours of Friday morning. USAC and IMS officials worked hard to get the event in, while complying with local curfew ordinances.
Friday’s concert was to showcase eight of the today’s leading music acts including: Florida Georgia Line, Cole Swindell, and Nelly. Many of the bands were managed by Scott Borchetta of Big Machine Records, which also sponsored the Brickyard weekend with its Big Machine Vodka brand.
FGL Fest was cancelled after a comprehensive review of the weather conditions with the safety of the event attendees as the top priority. All concert tickets were refunded thru their point of purchase vendors. The festival was not rescheduled.
The Saturday and Sunday Nascar racers were rained out, with both run on Monday.
It was a challenging weekend for all, including fans, bands, teams, drivers, officials, sponsors, vendors, etc.
Broadcasters must find an alternative time and channel to air the race. It may end up on a lower tier which can lead to lower ratings and smaller audience.
We are in the live event business – weather plays a very important role. It is in the best interest of everyone to get the events in as scheduled. Many series have additional races to run, so the racing circus needs to get down the road. There is a relatively small window to make-up races at the end of a season.
Delays will happen. Most tracks have Musco lighting so running late into the evening may be an option. Indy is an exception. It is a large facility where the cost of installing lights would be cost-prohibitive.
The cost associated with a delay can be expensive. Typically, it involves an additional day of many items. Hiring labor to staff the facility, reordering supplies to restock concession stands, additional hotel rooms, longer rental car rentals, and rebooked flights.
Heavy rain and/or winds often require increased security and emergency medical personnel, which can add significantly to the event’s expenses.
Track maintenance will also be on call to fix or repair damage to the racing surface such as weepers.
The expenses with running the event have been incurred. Marketing, promotional and activation costs have been paid.
The details in the sanction agreement, concert rider, or sponsorship contract are important. It lays out what the expectations of each party and how it is handled.
Event cancellation policies serve to protect a loss of revenue or additional expense should an event not proceed as originally planned. The promoter may choose to insure projected race revenues to protect against losses from cancellation, postponement or relocation.
Weather insurance can be purchased for sporting events including races and concerts. They amount of coverage will affect the premium. It is possible to by policy which will cover a specific rainfall total for track locations and window of time. If rain falls and the race is run, the promoter could even collect on the policy.
Bottom line, there can be financial consequences to all stakeholders when weather affects racing.