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Finding the right formula

NEWS STORY
11/11/2011

Scarcely a month goes by without talk of a new race being added to Formula One's calendar. In the past year alone we have heard reports of Grands Prix being planned in Argentina, France, Hong Kong, Mexico, Poland, South Africa, Thailand and even more in America which already has two races due to join the calendar over the next two years. In 2014 there will be a Russian Grand Prix and by then F1 will have two races more than the maximum number agreed by the teams in the Concorde Agreement, the contract governing the distribution of the sport's profits. All it takes is for a couple of the planned races to be signed and F1 will have to drop a total of four of the current Grands Prix. It could leave a lot of top circuits in need of a replacement for F1 to engage fans and keep them on the motorsport radar.

The current Concorde expires at the end of next year and the teams are currently renegotiating terms with F1's boss Bernie Ecclestone. As Pitpass has reported, there are clauses in the agreement for the teams to increase the limit beyond 20 races which would suit Ecclestone down to the ground because more races means more profit.

According to F1's industry monitor Formula Formula Money, the average fee for hosting a Grand Prix comes to 18.7m ($29.7m) so there is a lot at stake. Pitpass' business editor Christian Sylt understands that the teams may consider increasing the number of races beyond this limit in return for them getting more than their current 50% share of F1's profits. Ecclestone says that this is not an option so it would seem that the 20 race limit will stick which brings us back to the question of what is the best route for a circuit to take if it loses a high profile event such as F1. They may need to think laterally

A good example they could follow comes from America where the Richard Petty Driving Experience (RPDE) offers fans the option of riding in a 600bhp NASCAR-style stock car which is either driven by them or a trainer driver whilst they sit in the passenger seat. It is named after NASCAR legend Richard Petty who won its championship seven times and scored a record 200 race victories. The RPDE operates at 22 circuits in the US but one venue shows the potential for benefit better than any of the others.

This venue is in the unlikely location of Walt Disney World in Florida where its Speedway hosted the first round of the Indy Racing League (IRL) in 1996. The Speedway is owned by Disney but its estimated 3.8m ($6m) construction cost was funded by IRL. Capacity is 50,000 plus hospitality suites in the infield and for several years spectators watched NASCAR's Craftsman Truck series race there as well as IRL. The last race it hosted was in 2000 which is when the RPDE knocked on their door.

"Disney was looking for tenants who would be at the race track a lot more, so we came in," says Dave Williams, operations manager for the RPDE at Disney World. Whilst a race gives a temporary boost to a circuit's exposure, an event such as the RPDE brings fans to it year-round.

"The Richard Petty Driving Experience started in Charlotte and they opened a permanent facility in Las Vegas at the end of 1996 so the driving experience was looking to expand," says Williams. "What better place to expand to than Walt Disney World where you have people from all over the world coming every day."

He adds, "I've driven on about 20 of the tracks around the country in a stock car and [the Speedway] is one of the top five tracks for me. It is a technical track, it is a drivers' track." This is reflected in the success of the RPDE at the circuit. A customer survey gave the experience high marks, and one-third of the customers said they'd come back for another drive in the next 12 months. "We do about 10-12,000 ride-alongs at this track each year," says Williams and at an average cost of around 250 ($400) it gives the RPDE revenues from that single circuit of around 3.1m ($5m).

The circuit's biggest cost is a low double-digit revenue share deal with Disney and Williams says that "after that [our biggest costs are] labour and probably racing fuel. We take about 8,000 gallons at a time so that's a big cheque." He explains that around 20 people work at the circuit every day and 12 cars are kept there with around 100 in total run by the RPDE.

Overall, the RPDE has over 100,000 customers annually who either choose the 'ride-along' experience - three laps with an experienced driver for 69 ($109) - or one of the driving programs, the most popular of which is the 'rookie experience,' with eight laps behind the wheel for 251 ($399).

When the company first started it bought old cars from NASCAR but as it grew bigger it found that it was more beneficial to build its own vehicles. "First of all we can build them the way we want them," says Williams explaining that "for example, the windows you have to climb through are slightly bigger because all different body sizes need to get in and out. We also have fibreglass bodies so they last longer and look better for longer. If you buy cars from different race teams they would all have different parts but when we build them every car is exactly the same which is a lot more cost effective for us." RPDE even builds its own engines. "We have a full blown shop," adds Williams.

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