WILMETTE, Ill. — The return to the “new normal” is happening at rapid pace, and the motorsports industry is at the front of the field.
In this month’s edition of The Business of Speed, we examine the path ahead and how racing entities are part of that plan.
The pandemic-related shutdown during the 2020 season impacted the sports and entertainment industries hard. Key aspects of the revenue streams were not able to operate at levels that would maximize profitability.
Fast-forward 18 months and the outlook is much different. Cautious optimism has returned with the COVID-19 vaccination progressing to more than 50 percent of the population.
Federal, state and local municipalities are rapidly revising their guidelines toward normalization. Indications are that most areas will be fully open at the start of the summer.
This is great news for the economy, especially those dependent on spectator-based activities.
Utilization is key to any facility, and that is accomplished by hosting primary events and secondary options.
The home team or key tenant gets first choice of dates. When schedules are finalized by the leagues (in this case racing series), then those days are set on the calendar.
The last two years have seen “typical” schedules under constant change with shortened seasons, and canceled and rescheduled events.
The key has been flexibility.
There is hesitancy to set a date for third-party events in the short because uncertainty still exists over pandemic limitations. These bookings include music concert tours, family-oriented shows and sports-centric competitions.
Many stadiums and arenas host more than 200 events annually. This is comprised of primary tenants at 50 percent and third-party events at 50 percent.
There are expectations that the number of ancillary bookings could double next year as facilities try to make up for lost revenue. This could lead to a record-setting year for live entertainment related tours.
Performers are ready to go on the road again to maximize earnings. Entertainment continued its creative process by writing new music and releasing it on video platforms.
Streaming music is the norm but generates lower revenues than traditional album sales and downloads. Touring is highly attractive and there is pent-up demand from both the artist and the consumer.
Motorsport facilities will play host to many of these third-party events. The large footprint and the ability to self-contain are favorable characteristics of race tracks.
Tracks have hosted music concerts (Country 500 at Daytona Int’l Speedway) and festivals (Electric Daisy Carnival at Las Vegas Speedway) in the past. Most events of this nature have a finite lifespan due to promoter and artist changes or consumer preference.
It is expected that new ones are being planned and will return to these types of venues.
Racing schedules have also undergone changes. Series took the shutdown as a chance to reset, resulting in a few tracks not hosting events. This was done for financial reasons with fan and sponsor input.
Track officials are reaching out to promoters and booking agents, letting them know that their facilities are open for business.
Legislative efforts continue to support the race track’s place in the economy.
The RPM Act — Recognizing the Protection of Motorsports Act of 2021 — was reintroduced into Congress.
This bill seeks to amend the Clean Air Act and provide an exemption from certain antitampering provisions for modifying a motor vehicle that is not legal on the street of highway and is used solely for competition and other purposes.
The goal is to guarantee that the industry can offer parts that enable competition to continue.
The state of North Carolina has earmarked $45 million for the motorsports industry. These funds are part of the American Rescue Plan.
Charlotte Motor Speedway, Rockingham Speedway and North Wilkesboro Speedway are each receiving $10 million. The remaining amounts are going to smaller tracks and the development of a Motorsports and Moonshine Heritage Trail.
Motorsports was hit hard but remained flexible and worked hard at developing plans and relationships that will benefit its future.