Tuesday, June 28, 2011

What Makes an Event?

SO Jenny (Mrs JP to you), Pressdog and myself were standing around at the Iowa tweetup (expect a punchline soon?) talking about how Pressdog does such a great job each year pulling off a successful event at Iowa Speedway… We all chuckled at the Idea that Bill was to be commended for the event’s success.  It was nice to have a successful oval event to laugh about. 
But what was sad was this.  During the chat, Bill was wearing his Chicagoland Ticket lanyard, Jenny was wearing her Kentucky Speedway Lanyard and I my Milwaukee Mile Lanyard.  Standing at the most successful oval event outside Indianapolis (Texas is slipping and when you compare the size of the markets…) we were all representing another event that we each cared about.  Unfortunately each of those events was in a different stage of death.  Chicagoland – Gone.  Milwaukee – back from the dead but seemingly with a round trip ticket. Kentucky – Deadman walking.
There are particular circumstances that contribute to each’s situation, no need to hash them over here, but the conversation turned to “What Makes Iowa so successful?”  We never really put a finger on it.  But It has the three bases of any successful event covered.
  • First – A title Sponsor.  Suppose good title sponsor comes in at around $300k.  That is equal to 10,000 $30 tickets.  What’s more, this is prime the pump money.  It gets there before the event and provides the upfront budget to advertise and promote the event in order to get fans in the seats.  The title sponsor themselves will often promote the event themselves which is free advertising for the league and event. 
  • Second – Opportunities for corporate revenue.  At Ovals, this means suites.  At Temp Circuits it means hospitality areas (either way it is an opportunity for businesses to wine and dine their B2B clients or reward their employees).  It can also mean booth or exhibit space to market to the captive consumers at the event.  It can even include massive blocks of tickets distributed to loyal customers of a company (think all those fans through the years who went to races because Philip Morris was thanking them for smoking).  But no matter the product being sold to corporate entities, it is a very important source of revenue for an event in that it comes in big chunks, not $100 at a time but $5000 at a time for example.
  • Third – Fans.  The easiest part of the equation for most of us to understand is usually the only one that casual observers consider when they gauge an event to be a success.  The fans in some quantity must be present or it will be difficult to maintain a locally based event sponsor on a versus broadcast.  If a majority of your corporate revenue is based on exhibit or booth space then it is also vital to making those opportunities return positive ROI to the corporate entities that invest in them.
Overall a successful event breaks down like this…35,000 fans in a reasonably thought out and stratified ticket scheme will cover the league sanctioning fee for staging the event.  The revenue from corporate sources covers the expenses in operating and promoting the event.  A title sponsor is the profit that makes the whole extravaganza worth pursuing for the promoter.
Let’s think about the last two races for a moment…
Milwaukee – Not title promoter…No upfront money to get out there and market tickets or the event with.  No Luxury boxes, no hospitality areas and no foresight to harness the rest of the state fairgrounds property to create corporate revenue.  And finally what we saw on TV…no fans.  It is sad, but this wasn’t even close to ever having a chance…The only glimmer of hope going forward would be a title sponsor coming on board within the next 60 days.  If one arrives, I have some additional thoughts HERE.
Iowa – Iowa Corn as the sponsor, Plenty of luxury boxes, most of the booth and tent space in the fan village sold inside and outside the main gate and of course the necessary 35,000 fans that make the rest of the pieces of the financial ROI puzzle work.
You can apply this same kind of analysis to each of the events yet to come this season to gauge its overall health.
I have no Idea how Pressdog, the Iowa Speedway staff does it each year but they are to be commended, they are quite the success story on the IndyCar schedule.  Perhaps the presidents of the other oval tracks IndyCar races on need to make a visit to Des Moines and take some notes.  This little independent gets it done.  Something that can’t be said at the other independent ovals or even the ones owned by the big boys at SMI and ISC.

3 comments:

  1. A great take on the whole situation on how an event becomes (or even has a chance at becoming) a success, as was your piece on how to fix the Milwaukee race (those ideas should be placed into service next year with no changes). Sorry that I didn't manage to find you at the track, or have time to really attempt to find you at the track when I had a block of time more than 3 minutes (seemed I was always running for a pork chop, running to buy t-shirts for my nephews or running to my seat for something). We'll have to meet up at Indy or Iowa next year, for certain.

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  2. Non article related question... I have a DVR and fast forward through ALL of the commercials, but still see bits of the lead out and lead in commercial. Are these two slots more expensive than mid break slots? one of your previous posts got me thanking about that as I was watching the F1 race this weekend. Again, always nice to read your unique insight.

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  3. First of all, it was great to meet you and Mrs. JP that weekend. Second, you're right on the money regarding the comparison between Iowa and Milwaukee. The Iowa event weekend was a great example on how to do a race weekend right!

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