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Multiple personality disorder

“Multiple personality disorder is characterized by having at least one "alter" personality that controls behavior. The "alters" occur spontaneously and function more or less independently of each other….”

A medical assessment or a description of motorsport?

Many people involved in racing dream of participating at a serious professional level. And the same goes for track operators. How fantastic would it be to be able to build and operate a Sepang, Nürburgring, Bahrain or Shanghai, or to be able to promote a Australian or Monza GP? Think of the stature, the crowds, the parties, the glitterati … and the debt.

This is not an entirely bleak picture, because these events are the suns that shine light on the sport as a whole. They provide the image, the aspiration and the enthusiasm that spreads down through the ranks to the real customers of most racetracks. If they do not work individually as profit makers for those tracks who choose to promote them, they can work to promote the identity, image and business of their host facilities.

This is the secret that almost every race facility needs to recognize.

Whether you choose to run major events or not, your real business is what happens every day of the year, not just on those weekends when the stars come to town. The real customer is not the pro driver, nor the race series that brings them to your track, nor even the fans that come to watch them race. It is the non-professional driver who puts rubber on the track in club races, during private testing, as a customer of a high-performance driving school or as the guest of a corporate day activity. The real customer is the business that bases its activities at your facility. It is the group that rents your track on a regular basis to bring its retail customers to the circuit. It is the family whose 10-year-old son races karts while he dreams of future racing stardom.

The modern racetrack’s true profit lies in the consistency of its use; the volume of the everyday activity it can generate; the multiplicity of simultaneous venues that can be operated, the multiple businesses it hosts on-site and the low cost of everyday operation it can maintain.

Both the major pro-series and regional racing have multiple personalities.

At Formula 1 and pro-series level, the business of racing is huge, intense, complex, competitive and aggressive. It feeds off racetracks, but in general puts very little back into the facilities it uses. When it does pay to play, the revenues it generates for the track are far less than the cost of the standards it demands. In real terms, the image may be great, but as a business it has very little effect on the vast majority of racetracks around the world.

At regional level, however, the local racetrack is the center around which another whole level of business activity revolves, and this is a business that can be driven by aggressive track owners. Start-up race facilities have opportunities that they can define, develop, own and operate or which they can make available to their potential customers. Existing facilities, many of which operate traditional single activity tracks, can open new doors by adding alternate activity venues, by encouraging corporate use and by opening their doors to customers who do not see racing as the only rationale for their enthusiasm.

And like a modern shopping mall, the modern race facility itself has many alter identities. Each occurs and operates simultaneously and most function more or less independently of each other. It is always possible that conflicts may occur between site users or that one individual element can develop its personality until it overwhelms those of the other groups to become the dominant personality. If this happens, the track owner can find himself and his business driven by his customers and this could become a major factor in his ability to operate the whole facility effectively and at a profit.

The track operator must define and control the image, behavior and overall effectiveness of the project. Equally important, because he is the person who is responsible for the investment that created the facility, he has to make sure that he earns revenues from every possible source of activity taking place at his facility. The track owner has to make sure that he does earn all the revenues that are due to him, from whatever source.

A few years ago I was at the opening of a regional facility that I had designed. The event was a major national karting championship, drawing the best up-and-coming kart racers in the country. The track operator was thrilled to be hosting such a prestigious event, but he was inexperienced and naive. He did not fully understand the contract he was offered by the series owner, and he glossed over some of the small print. These were the clauses that gave the series rights to signage, sponsorship, hospitality and spectator revenues and to open practice fees and which laid on him the costs of tent supply, cleanup, corner workers and more. The series operator even provided all his participants with food (costs added to their entry fees), using a facility rented tent, effectively negating the track’s own catering services.

At the end of a great weekend of racing, the track was left only with good memories and bills that added to a significant financial loss for the weekend.

If this could happen with a kart race, I thought, how could tracks make money hosting more significant series whose operators hoped to follow the same Formula 1-syle model? I asked questions of other more established tracks and found that in many cases they allowed their customers to avoid spending money with the track by, for example, providing their own catering instead of using the circuit’s services or by allowing participants to conduct their individual business activities without paying the track any form of commission for their use of facilities provided by the track owner. They allowed track renters to erect signs, often in direct competition with the circuits own contracted, ‘exclusive’ customers and acquiesced when some clubs even wrote into their contracts that the track was not permitted to allow spectators on site during their race activities.

As a consequence, and as a service to my many track clients, I wrote a “Bill of Rights”, which in short form simply encourages track owners to write into all their track use contracts the simple statement that ALL commercial rights, of whatever kind, rest in the ownership of the facility; that the track’s customers cannot assume that they have any rights to conduct any form of business without the track owner’s permission; and that the track owner has the right to earn revenues from any business activities taking place on his property and that he may choose, at his sole discretion, to charge appropriate fees for these rights.

Nothing unusual here: just the standard modus operandi of any shopping mall. After all, it is the track’s business to be profitable.

Yes, low-level motorsport is a business, a multifaceted, complex and challenging business, but one that offers plenty of profit potential to the well-designed and well-managed facility.

 

Alan Wilson is a principal in the firm of Wilson Sahara Inc, based in Utah, USA. For a copy of his Track Operators Bill of Rights please email him at wilsport@aol.com

 

 

 

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