Potential promoters peek under Indy's hood
The promoters of Canada's only Formula One auto race are kicking Edmonton's Indy tires.
|It is sad that a race that draws so many fans can't even break even|
"Yes, it's true, we have expressed a level of interest," said Normand Prieur, an official with Octane Management Inc. of Montreal. "As you know, we are specialized in organizing motorsport events with the Canadian Grand Prix F1 race in Montreal and the Nationwide ( NASCAR) race on the same track. It's true. We have expressed a level of interest, but as we are speaking now, nothing is firmed up."
But it still might be seen as progress since private promotion is part of a new and sustainable financial model for the Honda Indy Edmonton. The Indy Racing League sanctioning deal with Northlands expires after this year's race and city council has wisely reached out to private promoters in an effort to take the financial burden of the event -- $9.2 million in losses over two years and a smaller deficit to come this summer -- off the taxpayers.
Northlands president Ken Knowles said Monday that at least two and maybe three other parties have shown interest in running the Indy here beyond this July. Octane Management is obviously one of them. It's believed Green Savoree Promotions of Indianapolis and Toronto is another, though Kevin Savoree did not return Journal phone calls Monday.
Prieur said Octane's interest in Edmonton would begin with the 2011 race and it's believed Green Savoree would be in a position to take over then as well. However, when asked about Northlands' potential involvement, Knowles said his organization would be open to discussing a role in what he called the "transition period" if another party takes over promotion of the event. He also said repeatedly that Northlands would do what is best for Edmonton, as determined in this case by city council.
The civic politicians have indeed been charged with deciding Indy's future, and it's obvious that private promotion is a key component of their go-forward plan. Coun. Kim Krushell said recently she would not support a contract extension with the IRL if the taxpayers were left on the hook.
A permanent road-race facility must also form part of a new foundation for the race, since the current venue at the City Centre Airport cannot be viewed as a long-term solution. One runway is set for closure in August and the entire property is scheduled for major redevelopment over the next two decades.
Castrol Raceway in the County of Leduc may top a list of viable options, but not until 2012 at the earliest. The road course in its current state does not meet IRL standards and Castrol co-owner Rob Reeves has said it would take about $5 million to get his facility up to speed. They currently have seating for 10,000 fans and would need to boost that to perhaps 30,000. The venue also requires upgrades to concessions and washrooms. Castrol Raceway has committed ownership and management who have held preliminary talks with sanctioning bodies of other major road racing events and their aim is to make the Raceway a destination facility.
But you won't find a race promoter or venue owner anywhere in the world willing to invest significant time and money on such a massive project unless the various levels of government and sanctioning bodies are on board with long-term commitments.
Octane Management arrived at just such a five-year deal to ensure the return of the F1 race to Montreal. The City of Montreal is in for $1 million annually, Tourism Montreal and the federal government are contributing $5 million each and the province of Quebec $4 million. Indy's viability requires a similar, though less costly, arrangement in Edmonton.
Having Northlands take over race promotion in 2008, at the behest of city council, was a short-term solution to a desperate situation and that time is up as of July 25. Once a private promoter signs on, the City need only act as a major race sponsor -- perhaps to the tune of $1 million annually -- and could also help out with policing and transportation issues. But the city simply cannot write a check every summer to cover a shortfall.
More arm-twisting certainly has to be done with the provincial and federal politicos because, at this point, their contributions don't get the job done. The financial hit has to be spread out well beyond the city limits for this thing to become attractive to a promoter like Octane or Green Savoree. They are for-profit businesses, after all. But they also have expertise in the industry that ensures cost savings and stables of established and portable sponsors that will bolster the revenue side.
Northlands has done its best to tighten the budget, it shrunk from about $14 million to $10.5 million since 2008, and this race still loses money, in part because startup costs total about $4 million annually. This year Northlands has attracted more sponsors and relied on the Go Indy Committee of local business people -- led by Sutton Place Hotel Manager Richard Wong -- to sell corporate hospitality suites and tickets. Knowles said ticket sales are "on par basically with last year" but the IRL deal forbids them from releasing the count.
So the deficit will be smaller. But it will still be there after the race.
"I think we've done a very, very credible job," said Knowles.
They have done what they can and now it's time to let somebody else take the wheel. It would behoove city council that happen sooner than later, but the IRL hasn't reached any sort of drop dead date yet.
"We're not panicked. We're in the throes of developing next year's schedule and we have a spot and we hope to keep Edmonton's name on it," said IRL commercial division president Terry Angstadt. "There is no real hard and fast date for an extension. What we are interested in doing is working with two good partners, so we are going to give them as long as we possibly can."
He said there haven't been any discussions on the specifics of an extension, but the IRL is open to either a one-year pact or a long-term deal. And while a change in promoter isn't ideal, he didn't seem worried.
"We think Northlands has done an outstanding job. I think there are a number of talented promoters out there."
Edmonton should be able to find one of them. Edmonton Journal