Street circuit folly and creative counting

[pplater]

Great story you won't find on Speedcafe here: http://www.carsales.com.au/news/2010...een-lost-18578

Excellent article that asks big questions of some of the real issues in motor racing. These include the REAL number of people who pay to watch the race, exactly what is the international TV audience for V8s and real figures of how much 'investment' into the Gold Coast comes as a result of staging the event.

Here's a snippet on Gold Goast V8 attendance:

Of the 205,000 reported attendance at the event, 52 per cent were spectators while the balance (48 per cent) comprised a range of categories that included guests of sponsors and corporate clients, VIP, media, volunteers, race and support teams, officials, free-of-charge guests, and so on.

[dsg]

Interestingly the article says the event returns "a relatively modest return on investment of approximately $3.50 for every $1 of investment" and goes on to say this is disapointing and governments would be looking for double this.

I'd love to see a list of government funded enterprises which give a 7 fold return on investment. Maybe I'm interpreting this wrong.

[cavvy]

Originally Posted by dsg

Interestingly the article says the event returns "a relatively modest return on investment of approximately $3.50 for every $1 of investment" and goes on to say this is disapointing and governments would be looking for double this.

I'd love to see a list of government funded enterprises which give a 7 fold return on investment. Maybe I'm interpreting this wrong.

The dollar spend per dollar put up to stage the event, methinks.

[Holly Wood]

Not sure I agree with your assessment of the article pplater.

Summing the annual expenditure for an event and proceeding to claim that money should have been used to build permanent circuits 18 years ago is ridiculous.

Racing journos should probably stick to writing about racing, rather than economics...

[Holly Wood]

The not-all-that-relevant AGP bashing in the article is interesting also.

Is this the same Geoffery Harris that used to be the Media Manager for the AGP... before leaving that job in bitter circumstances?

[cavvy]

Originally Posted by Holly Wood

Not sure I agree with your assessment of the article pplater.

...

Which bits of pplaters assessment do you disagree with:

Excellent article that asks big questions of some of the real issues in motor racing. These include the REAL number of people who pay to watch the race, exactly what is the international TV audience for V8s and real figures of how much 'investment' into the Gold Coast comes as a result of staging the event.

[Falcadore]

Originally Posted by Holly Wood

Not sure I agree with your assessment of the article pplater.

Summing the annual expenditure for an event and proceeding to claim that money should have been used to build permanent circuits 18 years ago is ridiculous.

Racing journos should probably stick to writing about racing, rather than economics...

This is the same sort of editorial philosphy that insists on putting a dollar value on every time someone is rescued by a state or government (including military) agency. Specifically to incite the uninformed into saying, bloody British-German-Serbian backpacking, hitch-hiking yachtsman from the Melbrisdney suburbia, should have just left them to die and save the money to use put into (insert preferred cause here).

Originally Posted by dsg

Interestingly the article says the event returns "a relatively modest return on investment of approximately $3.50 for every $1 of investment" and goes on to say this is disapointing and governments would be looking for double this.

I'd love to see a list of government funded enterprises which give a 7 fold return on investment. Maybe I'm interpreting this wrong.

When they say a 7 to 1 return on investment, they are referring the return of seven to include not just government, but hotelliers, merchandise sellars, accomodation bookers, travel agents, junk food retailers, event programme seller, airlines and every possible person who might make some money out of a person attending the event.

[Oldtony]

I was involved in tourism and community promotion for a lot of years, admitedly some time back.
In the development phase of event and direct promotion investment the ratio aimed for was always a 7 times factor of spending to identifiable visitor spending.
The Gold Coast event has never looked like meeting that target and the justification for not doing so has always been "look at te magic images going out on TV".
Certainly the Qld, Government should be independently seeking the actual broadcast time and schedule of the race and highlights package and the ratings achieved. Meanwhile my impression is that there is still strong opposition in the Gold Coast business community to the lack of a recognisable international component this year.
The other disapointment is the market demographic identified in the Williams report. Not exactly high flyers.
The article trying to relate total spending to what would have happened if it was spent on a permanent circuit though is way off base. Tho portion of that spending on errecting and dismantling of the circuit is the only part of the expenditure that can be looked on in that way. And that has to be wieghed against the drop in popularity of the event if it was taken out of the CBD to a remote location.

[dsg]

Originally Posted by Falcadore

When they say a 7 to 1 return on investment, they are referring the return of seven to include not just government, but hotelliers, merchandise sellars, accomodation bookers, travel agents, junk food retailers, event programme seller, airlines and every possible person who might make some money out of a person attending the event.

Yes, of course. Thanks Falc.

[Holly Wood]

Originally Posted by cavvy

Which bits of pplaters assessment do you disagree with:

Excellent article that asks big questions of some of the real issues in motor racing. These include the REAL number of people who pay to watch the race, exactly what is the international TV audience for V8s and real figures of how much 'investment' into the Gold Coast comes as a result of staging the event.

Article was proclaimed to be 'excellent'. I disagreed.

As I stated earlier, many of the numbers I believe have been used completely out of context, in order to use the cliche 'should have been spent on a permanent circuit' argument as the angle.

The lengthy discussion about crowd figures is also not what I'd call 'excellent'. When the aim of the event is to generate international tourism through positive exposure, does it matter if not all spectators paid for their ticket into the circuit? As long as the place looks full, and thus good on TV, who cares?

Saying that a sporting event has over-estimated its crowd figure is also a very tired cliche. Plenty of journalists have said this before, we all know it happens.

The finger pointing regarding the failure of A1GP has also been done to death in the media. Digging up a quote from a minister making a claim that subsequently wasn't delivered upon isn't exactly unique.

Nothing personal against Harris or pplater (they are both well respected media folk as far as I'm aware), but I guess I'm just sick of the negativity constantly heaped on big events, particularly this one.

[ForumNick]

Compare:

a) $3.50 return on every $1 invested...

b) 250% 'net' return on investment...


(b) appears to be better than (a) ........ BUT they are the same statistic!!!

It's only the way that you present the statistic (to suit your purpose) that makes the difference!!!

[stoned pony]

Is it difficult to be an apologist, Holly Wood, or does it just come naturally?

Personally, I agree with P Plater that it is an excellent article. The Gold Coast event was a financial black hole right from the start and it was only good media spin and creative government accounting that kept it going and that was long before V8 Supercars and even Cochrane became involved.

These days the Gold Coast street circuit is just rubbish and totally unsuited to its original purpose as the cars have evolved.

A permanent circuit somewhere between the Gold Coast and Brisbane would be much better. What's that? Did someone say Darlington Park? Too late to raise the dead, unfortunately.

[Purist]

If this permanent circuit isn't built to Grade 2 standard, which I doubt it would be, what's the point? Because, if it isn't, this new circuit will NOT be approved to host the same events, and will be incapable of filling the role on the wider stage that Surfers Paradise can do right now. Aside from the Grand Prix, Surfers Paradise is the most known Astralian motorsport event to those outside that country.

And no, if it's turning a profit, it by definition cannot be a financial black hole. If it's $5 million in annual investment, then it's a net return of $12.5 million. That doesn't sound bad at all for one event over one weekend.

And I have no respect or pity for the yuppies who complain about taxes, and then want EMS to just come rescue them when they stupidly got themselves stranded on a mountainside.

[Falcadore]

Originally Posted by stoned pony

A permanent circuit somewhere between the Gold Coast and Brisbane would be much better. What's that? Did someone say Darlington Park? Too late to raise the dead, unfortunately.

Darlington Park was never a racing circuit and was never really going to be a racing circuit. To suggest otherwise is to misinterpret what went on there.

[PVDA]

It's simple really, the Tax Office simply requests the GST be paid on the publicly released crowd figure.....

[cptkablamo]

I remember a similar stat - i.e. the return on investment being the same reason that they canned the WRC in Perth...

In any case it does raise some valid points but also skips some valid points - like what is the ad buy needed for 200 countries for 90 minutes - in the case for F1...or even Gold Coast Indy - what is the cost for that ad buy in the states for a tourism campaign.

What is the impact on the region's reputation internationally - holding an event like a major motorsport event or holding a Netball or life saving carnival, which may bring better % return on investment but will have negligible impact in the wider tourism and reputation benefits.

Sure the Gold Coast event has lost a lot of its shine but can you deny the success of the event to promote the region during the vast part of the last decade?

[stoned pony]

Originally Posted by Falcadore

Darlington Park was never a racing circuit and was never really going to be a racing circuit. To suggest otherwise is to misinterpret what went on there.

Easy to say. I was a bit involved with it from day one and the original internt was to run it as a race circuit. The owner wanted the Qld Government to help bankroll the track asnd it was looked at as a potential venue for the world motorcyle grand prix series so don't say it was never meant to be a race track.

Not having races and not meant to be a race track are two different things.

It would have been a sensational venue.

[Trevor]

I am surprised that some resident accountant hasn't tried to make head nor tails of those numbers.

[ForumNick]

I assume he's on his way to Adelaide ??

[Falcadore]

Originally Posted by stoned pony

Easy to say. I was a bit involved with it from day one and the original internt was to run it as a race circuit. The owner wanted the Qld Government to help bankroll the track asnd it was looked at as a potential venue for the world motorcyle grand prix series so don't say it was never meant to be a race track.

Not having races and not meant to be a race track are two different things.

It would have been a sensational venue.

Yes it would have, but in a day when there was not an alternative to being involved with CAMS, Darlington and CAMS could not come to an arrangement, so the result was the same.

Qld government involvement in more than one international event (Indy) was always going to be unlikely.