business model of support/junior series?

[Roninho]

Hi there,
Always wondered what the business model is of support/junior series like formula 3 or Autogp.

Obviously they get the entry fee off all competitors, but i do not see a serie sponsor in most cases. I would imagine that from the entry fees alone you cannot run a serie (even if you'd have 20 cars on the grid).
How does it work, does Autogp pay to be part of the WTCC weekend, or does WTCC (or the promotor) pay Autogp? Same with DTM and F3.

[Rf1 Fan]

Originally Posted by Roninho

Hi there,
Always wondered what the business model is of support/junior series like formula 3 or Autogp.

Obviously they get the entry fee off all competitors, but i do not see a serie sponsor in most cases. I would imagine that from the entry fees alone you cannot run a serie (even if you'd have 20 cars on the grid).
How does it work, does Autogp pay to be part of the WTCC weekend, or does WTCC (or the promotor) pay Autogp? Same with DTM and F3.

I guess that FIA F3 is paying a bill to race in exchange of a specifications book regarding:

- track time
- tv package
- grid girls
- paddock space


They are making i think good money out of hospitalities , 400€ for a race week-end , 3 people per family of drivers + sponsors....

Let's put 3 people per family + 2 from sponsors.

5*35*400€ = round 70 000€

You duplicate this by the number of week-end.

[Roninho]

Originally Posted by Rf1 Fan

I guess that FIA F3 is paying a bill to race in exchange of a specifications book regarding:

- track time
- tv package
- grid girls
- paddock space


They are making i think good money out of hospitalities , 400€ for a race week-end , 3 people per family of drivers + sponsors....

Let's put 3 people per family + 2 from sponsors.

5*35*400€ = round 70 000€

You duplicate this by the number of week-end.

Thank you for your reply. Any idea what they would have to pay for the tv package, paddock etc (the whole package).

I had not thought of your suggestion of hospitality income. But i would assume that they would have to pay the organizer/dtm a big fee for that as well? Or would that be part of the package?

Just to start with some numbers:
Income
Entry fee: 35x12.500 = 450.000
hospitality: 11x 70.000 = 700.000
...?

[Rf1 Fan]

Originally Posted by Roninho

Thank you for your reply. Any idea what they would have to pay for the tv package, paddock etc (the whole package).

I had not thought of your suggestion of hospitality income. But i would assume that they would have to pay the organizer/dtm a big fee for that as well? Or would that be part of the package?

Just to start with some numbers:
Income
Entry fee: 35x12.500 = 450.000
hospitality: 11x 70.000 = 700.000
...?

Well FIA F3 and DTM have the same shareholder in the person of ITR.

A bit like F1,GP2,GP3 which shares the same shareholder with Delta Topco.

I would think that they would have to pay when they race under WEC umbrella , Adac GT Masters, WTCC or Italian GT.

For example Fia F3 decided to get out of HTTT round in 2013 because Oreca/Gt Tour did not respect their promise in terms of track time.

[rich07]

I'm glad I stumbled across this thread. This is a most interesting read.

So how much more would FIA f3 have to pay if not under their parent organization ITR in a DTM meeting-for example if they shared the weekend with WEC or GT Masters?

[Rf1 Fan]

I guess it is enough of a setback to restrict the size of the hospitality for example.

[Roninho]

Originally Posted by rich07

I'm glad I stumbled across this thread. This is a most interesting read.

So how much more would FIA f3 have to pay if not under their parent organization ITR in a DTM meeting-for example if they shared the weekend with WEC or GT Masters?

much data on raceteam budgets can be found online, but very limited to none on the business model of serie/class organizers/promoters.

The Dutch supercar challenge has like 100 car entries at ~12.000 euro. I can see that they make money, but am curious what they spend to the main organizer (dsc is a support serie) for track time and live tv registration.
A serie like autograph/euro3000 has been around for over a decade, often with just 12-16 cars on the grid. I cannot see the organizer losing forever on that, so they must make money. On the other hand they must pay to be part of wtcc. But what would that be?

Anybody who has more detailed info on questions like these?

[bella]

you're not going to find much information online, partly because it's very commercially sensitive.

for example, renault uk will have a different deal with silverstone for the wsr event than brscc have for a club event. at a club level perhaps the rate is consistent, but in the uk particularly it's a challenge to break even at that level. i believe the circuit hire costs and insurance are a decent amount more here than anywhere else.

remember you have staff working for the series as well to pay. in some series that's a pretty serious payroll. someone else here mentions hospitality. they have a couple of members of staff, a truck driver, home country taxes and charges, a chef, an office/base, the relevant food certifications in their home country, their own insurance costs, accommodation for staff at the circuits...

[andrewc]

It may be a club series, but according to their published accounts the Monoposto Racing Club spent £ 168,015 in 2014 for with race circuits for 33 15 minute (occasionally 20 minute) races over 11 weekends, often 2 grids per weekend, including one non championship race at Spa, another at Mallory and a half day exclusive test at Donington.

They are fortunate in having a large racing membership to split the costs over keeping race entries comparatively low.

They choose to buy track time from race organisers / circuits and take the risk / reward of filling the grids to beyond the break even point.

These figures do not include trophies, club administration, publicity etc

[andrewc]

Further to above, in 2014 they bought 1065 minutes of track time, which works out at roughly £ 160 per minute.

[Roninho]

Originally Posted by andrewc

It may be a club series, but according to their published accounts the Monoposto Racing Club spent £ 168,015 in 2014 for with race circuits for 33 15 minute (occasionally 20 minute) races over 11 weekends, often 2 grids per weekend, including one non championship race at Spa, another at Mallory and a half day exclusive test at Donington.

They are fortunate in having a large racing membership to split the costs over keeping race entries comparatively low.

They choose to buy track time from race organisers / circuits and take the risk / reward of filling the grids to beyond the break even point.

These figures do not include trophies, club administration, publicity etc

Thank you Andrew, that is very helfpull!
So on average that is roughly £14.000 (~20.000 euro) per one day event (i used 12 events, counted the half day at donnington as an event).
I assume this includes also the costs for the track Marshalls and race-director? (since this event is not organised by them but by msvr).

A junior serie like F3 and Autogp probably would like a bit more track time in stead of the 45 to 60 minutes, probably at least double that for a weekend. That should increase costs as well.

And obviously this is not a high profile event (fans/attendance) nor has live tv coverage, which should increase costs as well if a F3 serie would like to get that as well.

On the other hand i can imagine that a hiqh quality junior serie could demand some stuff as well?

Anyway, i found the entry fee for Autogp, which is 30.000 euro per car per season of 6 races.
(http://www.autogp.net/pdf/2015_Sport...ulation_en.pdf )
Assuming Autogp would have to pay twice as much per event as Monoposto (since more tracktime and tv coverage) the costs for Autogp would be 6x 40.000 = 240.000 euro or £168.000.
If they have 15 cars entered in the championship they have 450.000 euro income, which leaves ~200k to cover costs like the organisation of their championship, pr, hospitality, etc. etc.


Another comparison: Superkarts at Gamma racing days Assen (used to be rizla racing days).
417 euro entry fee, 48 karts in the event. That is roughly 20.000 euro for 2 races of 25 minutes each and 1 fp and 1 q of both 20 minutes. And i would imagine that CIKFIA is smart enough to not count on 48 riders so i would imagine that they pay anywhere between 10.000 and 15.000 euro for the timeslots during the event, and add a few k for their own costs.

So if now anybody would have some insight if there is a substantial surcharge for tv coverage and if so how much roughly that would be nice
http://www.cikfia.com/fileadmin/cont..._prix_2015.pdf
417 euro
48 entries

[andrewc]

From memory there were 6 2 day events, 4 1 day events and 1 3 day event, but my club is taking up 8 track sessions per weekend, and the provisional timetable for the next event shows 36 track sessions in all, including a 1 hour race, a 45m race and quite long practise sessions for those races, so the cost of hiring the circuit for the whole day is a lot!

The average £ 160 per minute of track time would cover the cost of going racing, so including marshals, recovery and medical team. In the UK Silverstone and Brands GP are the more expensive, whilst those at Cadwell Park, Mallory etc are the cheaper ones, and to make the entry fees more even a certain amount of smoothing is used - i.e. the surplus raised from a cheap circuit is used to offset costs of an expensive circuit.

As said, that club has chosen for them to take either the financial risk or the financial reward on the entry rather than the organising company (MSVR, BRSCC etc). Other clubs and organisers use different financial models, if they run more than one series of varying success, the healthy grid can offset the losses from a less healthy race series.

I know that this method means the club has to keep a fairly healthy balance sheet as the circuits want paying significant sums of money, and its often mentioned that the balance between profit, or loss can be simply 4 or 5 drivers not entering.

In my breakdown I didn't include one 2 day meeting which MSVR took the financial risk - entry fees went directly to them so I don't know the costs involved.

I would expect the costs for higher profile series to be higher, and to use other income opportunities when possible e.g. hospiality. Last week I was at Donington for the GT Cup meeting, and someone mentioned that sit down hospitality was £ 50 per person, or £ 20 pp for a takeaway service for mechanics etc.

British GT on their website charge £ 100+VAT pp (£120) for full VIP hospitality and team catering £ 28 - £35+VAT pp. Additional paddock awnings are charged (£600 - £ 800 plus VAT) with entry fees being £ 3500+VAT per meeting or approx £ 20,000+VAT for the season.

[ivanalesi]

1h just to rent the satellite feed to broadcast from the circuit to the TV base is about 10k, it varies a lot! But it can be super expensive. TV crews and equipment... I don't know, but the engineers are all highly paid.
I know that many sports actually pay i.e. Eurosport to be broadcasted, most likely also Motors TV.
For me Renault's business model is the best, because they have everything under one umbrella - organizers & technical, marketing...
You can actually check the company data for many of the organizers. I've read from somewhere GP2/GP3's financial reports. They had something like 25mln in revenue and some reasonable profits. Hospitality was bringing 1 or 2 mln.

[andrewc]

There is also income from the technical partners - e.g. the sole tyre company sells tyres to the competitors, but there is also often a payment from the tyre company to the race series. Same with fuel.

Quite a few series in MSVR have switched to Pirelli this season, if paddock rumour is to be believed, is being done to assist Jolyon Palmer's F1 career.

[Roninho]

Originally Posted by ivanalesi

1h just to rent the satellite feed to broadcast from the circuit to the TV base is about 10k, it varies a lot! But it can be super expensive. TV crews and equipment... I don't know, but the engineers are all highly paid.
I know that many sports actually pay i.e. Eurosport to be broadcasted, most likely also Motors TV.
For me Renault's business model is the best, because they have everything under one umbrella - organizers & technical, marketing...
You can actually check the company data for many of the organizers. I've read from somewhere GP2/GP3's financial reports. They had something like 25mln in revenue and some reasonable profits. Hospitality was bringing 1 or 2 mln.

The costs of a full blown high calibre championship is very high. I have some data of this, for example BMP used to promote the BSB before Dorna took over. In 2002 they had cost of sales of 3.8 million and administrative expenses of 1.6 million (gbp). So it cost them ~5.5 million pound to run the championship.
Also the CART annual reports can be found online (since they used to be listed) on sec.gov . Costs for television was like 400k usd per event (for production), cant remember the excact number.

I have some info on BARC Toca regarding the BTCC from companycheck.co.uk but not sure if it is correct (since it is not the audited report but an excel), but that states that BARC TOCA had 2.6 million gbp in costs in 2012.

To me it is clear that for a championship that is the headline event with full tv coverage, etc. etc. can only be covered with OEM and/or TV network support.

There is quite some info to be found on the business model of the big championships, but not so much on the support/junior series.

[ivanalesi]

Absolutely! Without OEM or TV support it's super hard. I think Acceleration realized this last season. In the coming years the TV/Internet broadcasting costs will come down because the technology is developing so fast, but it won't become cheap