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DATE News (chronologically)
07/20/09
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Edmonton race stuck in neutral
The course is constructed, the grandstands are up, the weather forecasts are good.

In one week, cars will hit the pavement at the Rexall Edmonton Indy. But the sporting event's financial sustainability has become the topic of almost as much discussion as the race itself, after a deficit last year put city taxpayers on the hook for $5.3 million--$4 million more than anticipated.

Councilors appear split on whether the costs have been worth it.

"It's a question mark," said Coun. Ed Gibbons. "It's still early to say whether the Indy was right or wrong to do, and you can't cancel it anyway. We went in with the business plan thinking we'd do well by it. A vote's a vote and we're living with it. And I'm hoping for the best."

Indy boosters such as Coun. Tony Caterina have no doubts the cars and crowds have been good for the city.

"The publicity, you can't even put a price tag on it. The Indy is being seen by countries around the world," he said.

"We know the Indy has huge worldwide appeal," said Coun. Karen Leibovici. "Every time the cars go around the track on the TV screen, people see Edmonton. We can't afford the kind of advertising we get."

When councilors agreed in 2007 to backstop any losses on the Champ Car World Series--which has since merged with the Indy Racing League --they anticipated losses of around $1 million for at least two years. But the exposure Edmonton would receive in international television markets would be worth the money, they reasoned.

The$5.3-million loss caught everyone by surprise. Now, in the midst of a recession, Northlands is under intense scrutiny to run the$14.5-million event on budget. The expected deficit this year is $1.5 million.

The organization has been tossed a few surprises recently. Last week, it emerged the Edmonton Regional Airports Authority will charge for the use of its land, a fee waived last year. Add$250,000 to costs. On Thursday, Caterina said federal funding had been secured for the event. Add a potential $400,000 to revenues.

Coun. Ron Hayter, who unsuccessfully petitioned for an audit of last year's Indy, thinks Northlands is prepared for the race.

"They're working very hard to make sure that expenditures are looked at very closely and they're putting on a strong promotional effort. I'm cautiously confident they're going to put on the event this year without hitting the taxpayer between the eyes."

Northlands has had a full year to promote this year's Indy, unlike 2008, when the merger of the two racing leagues left the organization with two months to market a new and much larger event.

Indy merchandise, which was conspicuously absent last year, has already made it across the border, which should boost revenues. And the Edmonton Indy should be able to play off the race's re-introduction in Toronto this year.

One week before the race, ticket sales are "going well," Northlands major events director Mike Burton said Friday. The Indy Racing League, however, does not permit the release of ticket-sale numbers.

Burton said his organization has been running a tight operation this year. It's expensive, however: Major expenses include a sanctioning fee to the racing league, grandstand construction and television rights.

"Watching every dollar that we spend has been an important part of this process, and I can tell you, I'm really satisfied with the way we've managed our expenses this year," Burton said.

The Indy Racing League has said it's interested in keeping the race in Edmonton beyond the 2010 contract. It's unclear whether councilors will be willing to support an event that has yet to break even.

"I'm interested in seeing what our citizens are thinking moving forward, and Northlands would have to agree that they'd want to continue to do it," said Coun. Kim Krushell.

"After three years, that's when it will be time to decide whether there's a business case or not. It will be a cost-benefit analysis." Edmonton Journal

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