Edmonton predicting $1.5M loss on race
The 2008 event was a financial wreck and this summer's edition will lose at least $1.5 million, but Edmonton Northlands officials are already talking about extending their three-year deal with the Indy Racing League.
"We have been working on the future of this race since we took it over and we learned a lot last year," said Mike Burton, Northlands director of major events.
"We probably will be considering an extension after 2009, after we have reviewed the performance. We haven't asked (the IRL) about an extension, but last year they were very impressed."
The inaugural Rexall Edmonton Indy was indeed impressive, right up until Northlands announced a $5.3-million loss, a whopping $4 million more than they forecast. The pool of red ink brought out the yellow flags.
The City of Edmonton was forced to swallow hard and cover the shortfall. City councilors nonetheless pledged their faith in the folks at Northlands, who spun the loss as civic government's investment in the future of the race.
Opting for semantic gymnastics over straight shooting was foolish. A loss is a loss and Northlands would have been better off owning up, rather than insulting the intelligence of taxpayers by crowing about economic spinoff and investment in a prestigious event.
And that seems to be what they're doing now, meeting the economic challenges of this race head on, so maybe they have indeed learned on the fly. Burton said Northlands has trimmed $1 million off its race expenses for this year and will stage the proceedings on a budget of $14.5 million.
As mentioned, they will nevertheless lose at least $1.5 million, and there is no appetite in this community or this economy for another outlandish bottom line miscalculation and Northlands knows it.
"We're in a pretty challenged economy, but we're still pretty confident we can meet that number," Burton said of the $1.5-million loss.
"The expense side is really well in hand. We are using fewer contractors from out of town and using more of our in-house expertise. We have new, local suppliers and that brings the cost down."