Business of Speed
The Money Behind the Motorsports Industry
By: Tim Frost
Date: December 2017
As the racing season winds down, this month we will take a look into the business of racing at big events during the off-season.
SuperCross:
Saturday nights from January to May on Fox Sports centers on the two-wheeled action of Monster Energy Super Cross and Arenacross. Feld Entertainment owns the series after acquiring it from Live Nation in 2009. Feld is the leader in live entertainment with Ringling Brothers, Monster Jam, Disney on Ice, Disney and Marvel Universe Live.
The seventeen race season covers the entire United States providing geographic diversification. They are major metropolitan markets with a sizeable population base from which to attract fans from. Total season attendance tops 750,000 with an average of 45,000 per race. Ticket prices average around $40. Live television audiences are 340,000 with a sizable penetration into the desirable19-40 market demographic.
Sponsor activation is strong with exhibitor display on stadium concourses and trackside signage. Teams hold autograph signings in the outside pit areas prior to the races. Pre-race ceremonies play loud music with fireworks during rider introductions. The economic model for indoor events is typically a rental model with the promoter keeping ticket revenue and sponsorship and the venue keeping concessions and parking.
There are typically fifteen individual sports venues, including NFL and MLB stadiums. These existing infrastructure is one of key reasons these events are successful. Easy accessibility from highways and plenty of parking makes pre and post event traffic flow smoothly. Inside the buildings, there are spectator friendly amenities – stadium seating with great views, varied concessionaire menus and clean bathrooms.
Transforming the stadium into a racing surface is a complex task. A one-week timeframe would include five days pre and two days post. To prepare a track it takes approximately five hundred truckloads of dirt weighing 12,000 tons covering 80,000 sq. ft.. The playing surface is covered in approximately 6,000 sheets of plywood.
The event promoter owns the dirt and stores it locally during the off-season until the next year. It is actually more economical and allows for consistency of the racing surface. Track prep is a black magic science with lots of regional mixtures (dirt, sand, clay, loam) fine tuned over many years. Caterpillar heavy equipment is used to push the dirt, prep the track, maintain the surface and move the infrastructure equipment. The goal is to return the venue in suitable condition ready for the next event.
Chili Bowl:
The Chili Bowl Midget Nationals is the must attend event held early January in Oklahoma. The holidays are over and racing fans with cabin fever head to the Tulsa Expo Center. Every statistic about this event is impressive.
The Golden Driller – a 75 ft. tall oil-worker statue – state monument – quirkiest destination in the US – welcomes everyone. The current name of the venue, River Spirit Expo is covered under a naming rights agreement with the Muskogee Creek Nation. The fee is $240,000 annually, with several renewal options periods.
Many events are held there including car and boat shows, and the largest gun show in the world. Each Thanksgiving, the USA BMX Grand National are held. This event attracts over 3,000 riders from many countries and is recognized as one of the top events worldwide. The success of this event led to relocation of BMX Racing headquarters from Phoenix to Tulsa.
The Expo Center has over 350,000 sq. ft. of column free space under a cable suspended rood. The clear span of the building is one the key attributes of the facility. It is so big that race car haulers park inside for the week and serve as an inside pit area. The Chili Bowl now features almost 375 entries that compete over five consecutive nights.
The event was established in 1987 by the legendary Lanny Edwards and Emmet Hahn.
The track is a 1/4 mile circle surrounded by 15,000 grandstands. It is packed every night drawing fans from around the country. The Chili Bowl has an annual estimated economic impact of $24.4 million.
The importance of off-season motorsports events may be considered as a sports business success story due to their long history, unique timing, nationwide footprint, strong attendance and ratings and highly desirable demographic audience.