NASCAR 'White Elephant' loses another $1.6M
The NASCAR Hall of Fame lost $1.6 million during the fiscal year ended June 30, results disclosed in newly released annual financial figures compiled by the Charlotte Regional Visitors Authority. The $200 million auto racing museum, which opened in May 2010, has run deficits since its inception.
Members of the visitors authority’s executive board learned of the results last week, followed by the NASCAR Hall of Fame advisory board. The visitors authority runs the publicly owned hall of fame, located in uptown Charlotte, next to the convention center.
Tom Murray, the visitors authority CEO, told me in an interview at his office Wednesday, “The ultimate goal for us is to make money” at the hall of fame. A pre-audit report provided by the visitors authority showed the deficit for fiscal 2012 was $835,281. The numbers were calculated differently, so making a direct comparison and saying the deficit doubled is difficult. The 2012 figure excludes money for improvements to the exhibits allocated after construction had started; for the fiscal 2013 statement, that expense totals $900,000. A CRVA spokesperson said the comparable deficit for 2012 was $1.8 million.
Despite the deficits in fiscal 2013, Murray said the results beat projections by $600,000. If you're confused, the simple math works this way: the NASCAR Hall of Fame is still losing a lot of money and the visitors authority is revamping sales and advertising tactics to turn things around.
During its first full year, the hall of fame lost $1.5 million. Previous estimates by the visitors authority projected a profit of $800,000.
NASCAR licenses its name to the visitors authority for use at the hall of fame. As part of the arrangement, the racing sanctioning body receives sales royalties on hall of fame ticket sales and other revenue. Until the museum turns a profit, all royalties are deferred.
Deferred royalties totaled $800,000 for the just-completed year, up from $700,000 in 2012. Murray and the visitors authority board introduced a new method for determining financial results in 2012. Known as “One CRVA,” the formula spreads costs among multiple venues and businesses. The concept has made it harder to calculate how the hall of fame and other CRVA-run buildings, including the convention center and Bojangles’ Coliseum, are faring on a month-to-month basis.
Marketing, human resources and other departments share responsibilities for various buildings, making it harder to determine what portion of expenses should be allocated to individual venues, Murray said. On an annual basis, the visitors authority makes those distinctions in an effort to be transparent as a public agency, the CEO added.
“There’s a good news story and that is that we did a lot better than we thought we were going to do,” Murray said of the hall of fame’s financial performance. “The other side of that story is we have a lot more work to do. And we didn’t plan on solving all of the problems the first year. But we have made significant strides.”
While the NASCAR Hall of Fame still runs deficits, Murray said the overall visitors authority had a successful year. Revenue grew by 11 percent over 2012, to $51.5 million. The visitors authority was able to invest $2.5 million in its reserve fund, boosting the reserve fund total to $4 million.
Industry taxes subsidize millions of dollars worth of advertising and convention-recruiting expenses for the visitors authority and also pay down debt on construction costs for the convention center, hall of fame and NBA arena, among other taxpayer investments.
For fiscal 2013, which ended June 30, the hall of fame received $500,000 from the city for maintenance and other costs associated with building upkeep. That money is included in the racing museum’s $6.3 million in revenue for the year.
Cocktail parties, receptions and other rentals have helped the hall of fame. Last year, the NASCAR museum booked 309 private events, including $300,000 worth of business from Democratic National Convention-related bookings. A year earlier, the hall of fame hosted 254 private events.
Attendance fell to 176,838 this year, down from 197,410 visitors in 2012. During the first full year the museum was open, ending in April 2011, attendance totaled 278,046.
Original projections called for 800,000 visitors during the first year before declining to 400,000 in subsequent years. Ticket prices are unchanged at $19.95 for adults and $12.95 for children, but Murray said a $10 conventioneer ticket introduced in July and more combination ticket packages have been created to attract more visitors. Charlotte Business Journal