14 replies to this topic

[statman]

We all know F1, Indycar, Nascar, V8 Supercars and DTM draw big crowds but when you watch several other racing series during the weekends there's always 1 question that comes to mind:

 

How do they survive (financially)?

 

I'm talking about:

 

F3/F4 series

WTCC

TCR series

(International/National) GT series

etc.

 

I mean, EMPTY stands or at best a handful of spectators.

 

And another question: how do the venues they visit get their income? They still have to put logistics/organization/marshals in place for those weekends.

[V8 Fireworks]

How do they survive (financially)?

 

 

Two words:

 

Rich people

 

Motor racing is just a hobby for rich people... Either they race themselves in GT racing, or sometimes they are a "benefactor" to support an emerging young driver.  Or they may take up a sponsorship of dubious return-on-investment as a kind of tax write-off.  [In the worse cases it is money laundering putting some of the cars on the grid!]

 

Of course there are also "Mom and Pop" racing teams where they put their savings into it for their child, hold fund raisers, and have lots and lots of small sponsors on their race car in Formula 3 or whatever, but this is pretty rare.

 

Realistically, football or isn't a whole lot cheaper for a youngster's family than go-karting anyway, even though the equipment is cheaper (fees for football junior academies are massive, and sadly some families even take on debt to finance the football academy (or go-karting) which is very unwise). 

Edited by V8 Fireworks, 16 October 2017 - 09:55.

[V8 Fireworks]

 

And another question: how do the venues they visit get their income? They still have to put logistics/organization/marshals in place for those weekends.

 

The series pay a fee to use the circuit.

 

At a more modest level, you or I may take our road cars to a track day.  At $100 per participant x 140 participants, that's $14,000 and covers most of the expenses for running the circuit that day plus a profit.   While the fee may be $100 for a club circuit, it may climb up to $250 or more for international grade circuits too...

 

Bear in mind the marshals are mostly volunteers - so unpaid, and on a track day they have the bare minimum number of marshals and mostly rely on CCTV and electronic flag boards rather than people with actual flags.

Edited by V8 Fireworks, 16 October 2017 - 09:55.

[JRodrigues]

TV Rights.

[V8 Fireworks]

We all know F1, Indycar, Nascar, V8 Supercars and DTM draw big crowds but when you watch several other racing series during the weekends there's always 1 question that comes to mind:

 

How do they survive (financially)?

 

I'm talking about:

 

F3/F4 series

WTCC

TCR series

(International/National) GT series

etc.

 

I mean, EMPTY stands or at best a handful of spectators.

 

 

 

Besides let's say you become hooked on motor racing, and want do a national circuit or rally championship at an amatuer level.

 

It's possible to do the whole championship on a budget of say $10,000-20,000 (not including the cost of the car), if you prepare the car yourself and tow it around the country personally behind your Toyota Hilux --- and $10,000-20,000 is about what a posh person would spend on a fancy holiday once a year or a nice kitchen (other types of first world excesses).

 

So the costs of motor racing, at a club level, are not totally out of the norm of other discretionary expenses.

 

It is wasteful, could it go towards the world's famine-affected and war torn?  Yes and no, it's hard to say.

Edited by V8 Fireworks, 16 October 2017 - 10:00.

[chunder27]

Circuits, well I would guess a lot of them make a loss and are held up by rich benefactors.

 

Some will make money from track days and usage for race meetings.

 

Some might money from use of the facilities, like clubhouses and meeting rooms.

[statman]

thanks for the answers guys!

[BRG]

TV Rights.

Hardly.  Other than the biggest series like F1 and NASCAR, these race series don't have much appeal to broadcasters who don't see good viewer numbers for them, and therefore won't be able to sell advertising space for very much.  Hence most of these lesser series - even World championships like WEC and WTCC are covered by networks like Eurosport or Motorsport TV which certainly don't pay them very much, if at all.

 

Circuits, well I would guess a lot of them make a loss and are held up by rich benefactors.

 

Some will make money from track days and usage for race meetings.

 

Some might money from use of the facilities, like clubhouses and meeting rooms.

Not sure what the story is worldwide, where you may well be right, but that is certainly not the case for the UK. 

 

Motor Sport Vision (aka Jonathan Palmer) work their assets very hard.  It is mostly track days and practice days with the proper racing really just a sideshow that gives the circuits the necessary kudos to attract the trackday types.  I was surprised to find that Brands (and doubtless other NSV tracks) even run evening sessions in the summer months. 

[statman]

I was just reading through the company accounts of Motorsport Vision, that holds circuits like Brands Hatch and Oulton Park (Palmer is one of its directors) and they made a loss of 2.5 million pounds last year, and in 2015 barely made a million in profit

 

Looks like margins are pretty tight

 

And an article in the Telegraph:

 

Silverstone is owned by the British Racing Drivers Club (BRDC), a group of 850 motorsport luminaries including Nigel Mansell and Lewis Hamilton.

 

However the BRDC is distancing itself from the track after it burned up net losses of £55.9m over the past five years.

 

yikes!

[BRG]

SIlverstone is a special case in that they have to pay FOM so much for the GP.  Now that is being dropped or re-negotiated, the losses may not continue. But I was surprised that MSV isn't in profit.  It may be that they have been investing in the tracks - since MSV took them over, they have all been spruced up quite noticeably.

[chunder27]

Palmer is sitting though on Bedford Aerodrome, that is being flogged and touted as one of these greenfield building/town development areas, have seen the sales brochure and it is hundreds of houses, shops etc.  That would be worth hundreds of millions probably. Not sure yet if it is a done deal, or still up for review, but it looked pretty impressive.

 

Plus he has purchased a similar thing to Bedford in France at a place called Laon, bought an old airfield, building a race complex there, likely not for motorsport, then sell it for development and housing in a few decades just as Bedford. So that likely explains the losses made. Not sure if it is done or finished yet, but certainly was being sorted.

 

And they bought the rights for Donington, so that probably explains away a poor year. They usually make a profit do they not?

Edited by chunder27, 18 October 2017 - 13:27.

[highdownforce]

We all know F1, Indycar, Nascar, V8 Supercars and DTM draw big crowds but when you watch several other racing series during the weekends there's always 1 question that comes to mind:

 

How do they survive (financially)?

 

I'm talking about:

 

F3/F4 series

WTCC

TCR series

(International/National) GT series

etc.

 

I mean, EMPTY stands or at best a handful of spectators.

 

And another question: how do the venues they visit get their income? They still have to put logistics/organization/marshals in place for those weekends.

 

 

This is not meant to be a complete list, but here it goes:

TRACKS

Hosting Fees that may be reasonably cheap or dirty expensive. Equipment rented at the track and services offered are also charged. The race promoter will pay for this fees using the registration fee that every competitor pays, plus money from event sponsors and to a lesser degree money from eventual the public. Some series go to the extent of being 100% private with no public allowed at the track.
Only series like F1 have the privilege of charging, not the circuit but the local race promoter, for their races to be held at the place.
The track owners involvement comes into play because changes are usually required at the track and the event must have enough return for them in order to pay for these changes.
The racing promoter will also rely on the track owners as partners of the event if the race somehow brings some return for them (the case of public owned tracks).

 

CHAMPIONSHIPS

As said before, money comes from competitors, sponsors, TV rights (when present) and the public present at the tracks.
Some racing series also receive money from automobile clubs and federations as a matter of self-promotion.

Another thing not uncommon is that some series may receive incentives or tax reduction from the government, usually related to a high-performance sports or technology committees.

There are also one-make racing series where a single team is responsible for all cars or bikes, those are drawn before the races. Drivers will pay for racing without having to worry about infrastructure or logistics.

 

RACING TEAMS

Sponsorship from third parties, money from other company's branches (when it's the case), drivers, maybe tv rights and prize money.
Smaller championships will distribute little to none tv rights or prize money.

Some teams are heavily funded by rich enthusiasts that will operate at loss if necessary, but always trying to at least break even.

Other teams will balance their income and costs to reach profit at the expense of sponsorship, pay drivers and other sources.

And some teams will operate as a service, where you pay for their expertise at the track, also they could even rent their cars or bikes.

 

FEDERATIONS

Membership fees, event support fees, homologation fees, other services and sponsorship arrangements for the "development of the sport".

[chunder27]

I think you will find any world series has hosting fees, SBK, MotoGP, WRX, WEC, WTCC.

 

I would guess even series like BTCC and BSB do too.

[TheRacingElf]

TV Rights.

On the contrary even, many smaller series have to pay a broadcaster like MotorsTV to have their series broadcasted.

[highdownforce]

On the contrary even, many smaller series have to pay a broadcaster like MotorsTV to have their series broadcasted.

 

I know some that have set up an online broadcasting company just to be able to put their races on Youtube.