Ticket stubs don't equal big pay stubs for tracksBy Ron Lemasters, Special to
NASCAR.COM
September 8, 2004
02:13 PM EDT (18:13 GMT)
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It is a common misconception among some race fans that just hosting a race means
a lot of profit for the track operators. Just throw open the gates and let the
money roll in, right?

Wrong. Big-time wrong.

"It [opening the gates] is a significant expense for us, and one in which we
have to balance providing the best possible service for our customers, providing
the safest possible environment and managing the cost, because you don't want
that cost to get away from you," said Doug Stafford, executive vice-president of
both Speedway Motorsports, Inc. and Lowe's Motor Speedway.
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"We are competing for the discretionary entertainment dollar against a number of
other entertainment options, and to simply say Nextel Cup racing is a slam dunk
is inaccurate," Stafford said. "We have to work hard to convince people to come
to our event, just like the folks who are promoting other professional sports
do, as well as other types of entertainment."

According to financial documents filed by one of the speedways which hosts
Nextel Cup events, simply opening up the gates costs in the neighborhood of
$500,000. When a track operator opens the gates to make ready for an event,
there's a lot that goes on that the race fan never sees.

Security must be in place, and that is a contracted expense with whatever agency
is used. In the case of Lowe's Motor Speedway, those agencies are the North
Carolina State Highway Patrol, the Concord Police Department, Cabarrus County
Sheriff's Department and private security hired for the event. These officers
handle security, traffic control on ingress and egress and various and sundry
other situations which pop up over the course of a race weekend. The state of
North Carolina, the city of Concord and Cabarrus County provide their services
to the speedway for a fee.

"We are very fortunate to have the support of the Highway Patrol, the Dept. of
Transportation and the Concord Police Department, as well as a number of other
law enforcement agencies," Stafford said. "That is even more the case today
after the tragedy on 9/11."
Fans enjoying the racing action. Credit: Autostock
Then you have the myriad personnel whose job it is to see to the arcane duties
of race weekend. People park cars, sell food, drinks and programs, run
hospitality suites and tents, and clean up after 180,000 race fans. All of them
cost money.

"If you take into account the folks who park cars, the people who handle
security for us, folks who handle traffic control, the people who actually man
the gates, stub the tickets and check the coolers, sell the tickets and
concessions, the people who handle all the suite catering and that for the
Speedway Club, the folks who handle our souvenir trailers and all the other
support people, it totals about 5,000 people," Stafford said. "It adds up pretty
quick."

There's also maintenance and engineering personnel to fix what gets broken, and
so on and so forth.

Civic involvement is a goal for every major speedway, and at Lowe's, it's at a
very high level. "A number of the folks who work here, particularly those who
handle parking and work on gate control and a lot of those who work on our
cleanup crews and concession stands are with civic, school and church groups and
other non-profits who are using the races to raise money for their
organizations," Stafford said.

Then there's weather. Should a track open and then have to close for the day, it
doesn't reduce the operating cost a lick. For instance, if a race gets rained
out on Sunday and has to be run on a Monday, then it's another $250,000-$500,000
for that, over and above what it cost the previous three days.

The purse, as we've already observed, is also a cost borne by the promoters and
it runs into the millions of dollars in some cases. Ticket sales cover only a
portion of the outlay required to host an event. For example, say a track has
167,000 seats and the average ticket price for all of them is $50. The revenue
derived from tickets is a shade under $8.5 million.

Television money helps, as traditionally, 65 percent of posted television
revenue goes to the promoter. Under current conditions, that's another $7
million or so, but it still doesn't bring forth images of Scrooge McDuck
wallowing in all his gold coins.
One source of track revenue is RV parking. Credit: Autostock
Then there's advertising. A typical Nextel Cup weekend is popular, yes, but only
a few events do not need additional advertising to sell every ticket. The night
race at Bristol is one of those, having a waiting list for tickets as long as
your arm.

How much a promoter spends on advertising depends on the number of tickets
available, the market in which the advertising takes place and the variety of
outlets that can be utilized.

"A lot of folks assume you don't have to spend very much money advertising a
Nextel Cup weekend, but we are out there competing with other major sporting
events, as well as other types of entertainment," Stafford said. "We place and
pay for a fairly large television advertising schedule. That's not just in the
home market here, but we go into Greensboro, High Point, Winston-Salem,
Raleigh-Durham, Greenville-Spartanburg, Asheville and other markets out of the
area. We purchase television, radio, newspaper, we buy some outdoor advertising
and we do a lot of direct marketing, particularly direct mail. It is a
substantial amount of money. We do it for a couple of reasons. One, we want to
sell tickets, and two, we want to make sure that our sponsor knows that we're
giving them the exposure to which they are entitled."

So throwing open the gates and counting the money is by and large a
misconception held by some race fans when it comes to realizing the work and
expense involved in providing a venue for Nextel Cup racing. There are other
revenue streams, of course, and the corporations and people who own speedways do
not do so out of the goodness of their hearts, but to earn money like any other
business undertaking.

Understanding that simple fact just might make you think a little as you walk
past the person who directed you to a parking space, stubbed your ticket and
checked your cooler as you walked into the speedway on race morning.



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