Indiana Open Wheel - View Single Post

Jonr · 7/25/09, 1:49 PM

I remember a promoter commenting on a thread like this before. He stated that the insurance was a set price, and the type of cars did have a bearing on the cost (open wheel vs stock cars). The other thing that was interesting was the sunk cost for the rain outs.

His comments was that unless you cancel a day or two in advance all rain outs are a money loser. You have all the time and money spent working the track. In order to guarantee that he had all of the hot dogs, hamburgers, breads, etc at the track that he had to place his order earlier in the week. Once the order was placed, he had to accept the order on race day. Some of the items he could hold till the next week, some of it he had to dispose of. It did not matter to the vendor that it was raining. He had an order to deliver.

The other sunk cost was the insurance of a rain out. While I forget the numbers, it was something like he had to pay 25% of the cost just to open the pit gates. 50% payout if the cars packed the track, and 100% if there were any green flag laps.

Two more major cost are your utility bill (electricity for the lights, fuel for all of the track vehicles) and your tax bill. While I have no idea how much the tax bill would be. I do know that you have both the taxes on the revenue (the business) and also the property taxes. I was at a track once where the sheriffs were sent out to on race night to collect the back due property taxes. I belive that the promoter had to pay the tax bill for the track owner in order to keep the races going.

The last major cost that you are leaving out is the hired help. While most of the positions are mimimum wage and some are volunteer. There are some that are high cost. Security, ambulance service, fire service, flagger, pit stewart, etc.

I also agree that the whole operation has to make money. It is not worth the time or the headaches to the promoter unless he is making money on the deal. Also, if it is making money, then there is a chance for improvements to the facility. If the guy is only breaking even, he is not going to paint the place, work on the toilets, improve the lighting, and do all of the other things that seperates a decent track from a great track.

7/25/09, 1:49 PM	#9 Re: Purse Structure, Could this work?
Jonr Senior Member Join Date: Sep 2008 Posts: 1,723	I remember a promoter commenting on a thread like this before. He stated that the insurance was a set price, and the type of cars did have a bearing on the cost (open wheel vs stock cars). The other thing that was interesting was the sunk cost for the rain outs. His comments was that unless you cancel a day or two in advance all rain outs are a money loser. You have all the time and money spent working the track. In order to guarantee that he had all of the hot dogs, hamburgers, breads, etc at the track that he had to place his order earlier in the week. Once the order was placed, he had to accept the order on race day. Some of the items he could hold till the next week, some of it he had to dispose of. It did not matter to the vendor that it was raining. He had an order to deliver. The other sunk cost was the insurance of a rain out. While I forget the numbers, it was something like he had to pay 25% of the cost just to open the pit gates. 50% payout if the cars packed the track, and 100% if there were any green flag laps. Two more major cost are your utility bill (electricity for the lights, fuel for all of the track vehicles) and your tax bill. While I have no idea how much the tax bill would be. I do know that you have both the taxes on the revenue (the business) and also the property taxes. I was at a track once where the sheriffs were sent out to on race night to collect the back due property taxes. I belive that the promoter had to pay the tax bill for the track owner in order to keep the races going. The last major cost that you are leaving out is the hired help. While most of the positions are mimimum wage and some are volunteer. There are some that are high cost. Security, ambulance service, fire service, flagger, pit stewart, etc. I also agree that the whole operation has to make money. It is not worth the time or the headaches to the promoter unless he is making money on the deal. Also, if it is making money, then there is a chance for improvements to the facility. If the guy is only breaking even, he is not going to paint the place, work on the toilets, improve the lighting, and do all of the other things that seperates a decent track from a great track. _________________________________________________ Last edited by Jonr; 7/25/09 at 2:13 PM.