{"id":404,"date":"2017-05-30T21:21:48","date_gmt":"2017-05-30T21:21:48","guid":{"rendered":"http:\/\/businessofspeed.com\/?p=404"},"modified":"2017-05-30T21:24:18","modified_gmt":"2017-05-30T21:24:18","slug":"ss-bos-column-may-2017","status":"publish","type":"post","link":"http:\/\/businessofspeed.com\/?p=404","title":{"rendered":"SS – BOS – Column – May – 2017"},"content":{"rendered":"

Business of Speed<\/strong>
\nThe Money Behind the Motorsports Industry
\nBy: Tim Frost
\nDate: May 2017<\/p>\n

We are pleased to introduce a new feature to SPEED SPORT<\/a> – The Business of Speed.” \u00a0This column will look at the financial aspects of the industry. Whether it’s on the track, passing through pit lane, worked on the race shop, or negotiated in the board room, we will attempt to cover it all.<\/p>\n

The beginning of the season, highlights the involvement of corporations monetary ties with the industry and a look back at the financial results of the tracks.<\/p>\n

Sponsorship Spending:<\/p>\n

One of the key components of revenue in motorsports is sponsorship. Whether it spent on the team, driver, car, or event it is important.<\/p>\n

Companies and brands spend in sports and entertainment properties because they will anticipate receiving a return on their investment. Higher growth properities that can be integrated are desired. Combined digital and social campaigns on multi-platforms are the norm. Measurements from audience data and customer retention are typical metrics.<\/p>\n

According to the IEG \u2013 Sponsorship Report, global spending on motorsports sponsorship is expected to reach $5.75 billion in 2017. This is an increase of 3.1 percent over the previous year. Over the last five years, annual increases have averaged 3.0 percent.<\/p>\n

Global Motorsports Sponsorship Spending<\/p>\n

Year Amount
\n2012 $4.97 Billion
\n2013 $5.12 Billion
\n2014 $5.26 Billion
\n2015 $5.43 Billion
\n2016 $5.58 Billion
\n2017 \u2013 (Projected) $5.75 Billion<\/p>\n

Source: IEG \u2013 Sponsorship Report<\/p>\n

Motorsports represents about 9.2 percent of the worldwide sponsorship market total of $62.8 million. This is a significant amount reflecting the global reach of racing, led by Formula One.<\/p>\n

Liberty Media anticipates new sponsorship opportunities reflecting their new agency of record agreement with CAA Sports. Historically there has been limited in-house sales efforts by Formula One, so attention will be focused on high-growth areas like technology.<\/p>\n

Domestically, Nascar continues to be challenged on the team side. Overall total pricing tiers are staying stable. They are being filled with shorter term deals covering fewer races requiring multiple sponsors to cover an entire season.<\/p>\n

Automotive manufacturers are the leading category for Nascar sponsorship. This is followed by construction and soft drinks led by the Monster Energy premier series backing. The largest group of team sponsorships includes building \/ home products and food companies. Event entitlements are led by automotive, associations and auto parts.
\nTrack Operator\u2019s Performance:<\/p>\n

Revenues for the publically traded track operator\u2019s have been under pressure for the last five years. Overall, they have able to remain stable with a slight increase. Beneath the totals, details tell a compelling story.<\/p>\n

Admission related revenues has been declining steadily. Tracks have removed over 35.0 percent of permanent seating capacity. There are transforming these areas into motorhome camping spaces and corporate hospitality areas. In adidition, they are developing innovative ticketing packages along with allowing free children for Xfinity and Truck series events.<\/p>\n

Television related revenue has been the bright point. When the combined $6.8 billion, eight to ten year packages with Fox \/ NBC were announced, it was a 30.0 percent increase over the prior agreements. Track had contractually obligated income which has more than offset the decline in other sources of revenue. It also served as a basis for the formation of Charter System and Race Team Alliance.
\nTrack Operator\u2019s Revenue (Millions)<\/p>\n

Year ISCA TRK DVD Total
\n2012 $612.0 $490.0 $47.0 $1,149.0
\n2013 $612.6 $480.7 $46.2 $1,139.5
\n2014 $651.9 $484.3 $45.7 $1,181.9
\n2015 $645.4 $496.5 $46.5 $1,188.4
\n2016 $661.0 $512.2 $45.6 $1,218.8<\/p>\n

Source: ISCA, TRK, DVD<\/p>\n","protected":false},"excerpt":{"rendered":"

Business of Speed The Money Behind the Motorsports Industry By: Tim Frost Date: May 2017 We are pleased to introduce a new feature to SPEED SPORT – The Business of Speed.” \u00a0This column will look at the financial aspects of the industry. Whether it’s on the track, passing through pit lane, worked on the race […]<\/p>\n","protected":false},"author":5,"featured_media":407,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"_links":{"self":[{"href":"http:\/\/businessofspeed.com\/index.php?rest_route=\/wp\/v2\/posts\/404"}],"collection":[{"href":"http:\/\/businessofspeed.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/businessofspeed.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/businessofspeed.com\/index.php?rest_route=\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"http:\/\/businessofspeed.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=404"}],"version-history":[{"count":3,"href":"http:\/\/businessofspeed.com\/index.php?rest_route=\/wp\/v2\/posts\/404\/revisions"}],"predecessor-version":[{"id":408,"href":"http:\/\/businessofspeed.com\/index.php?rest_route=\/wp\/v2\/posts\/404\/revisions\/408"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/businessofspeed.com\/index.php?rest_route=\/wp\/v2\/media\/407"}],"wp:attachment":[{"href":"http:\/\/businessofspeed.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=404"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/businessofspeed.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=404"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/businessofspeed.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=404"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}