Grand Prix promoter lost about a million on event
By ALICIA CALDWELL, Times Staff Writer
© St. Petersburg Times
published April 30, 2003
The cars were fast and crowds were enthusiastic. But the positive reviews for the Grand Prix of St. Petersburg, a three-day street racing event in February, didn't extend to the promoter's bottom line.
In a report filed with financial regulators, Dover Motorsports revealed the race's losses approached $1.3-million. Patrick J. Bagley, Dover's senior vice president for finance, said that number was "generally accurate," but added that a small part of the loss was attributable to other minor events.
Given that the St. Petersburg race, in its first year, did not have a title sponsor, a loss was not surprising.
"Generally, on an inaugural event, it's very difficult to come out of the gate and have it profitable," Bagley said.
The report, filed last week with the Securities and Exchange Commission, revealed that Dover's operational and marketing expenses increased by nearly $4.3-million for the first quarter of 2003 over the same period last year, but revenues went up by not quite $3-million. The company attributed substantially all of that revenue increase, as well as the bump in operating and marketing expenses, to the St. Petersburg race, the only major event it promoted in the first quarter.
"The inaugural Grand Prix of St. Petersburg event, which was run through the streets of a revitalized St. Petersburg was successful in all operational aspects," according to the quarterly earnings report by Dover Motorsports. "Unfortunately, the event did not meet revenue goals as a result of the soft economy, a threat of war and too few sponsors."
Chris Pook, president and CEO of Championship Auto Racing Teams, which sanctions the race, could not be reached for comment. Pook previously has said he didn't expect the St. Petersburg race to break even in its inaugural season.
CART gets a sanctioning fee from Dover. Part of that fee is "variable based on the profitability and success of the event," Bagley said.
The goal for next year, Bagley said: Get a title sponsor for the race and to make a profit. But he said there was no break-even deadline that would determine the race's fate.
The race, which featured Indy-style cars zooming along at speeds faster than 200 mph, kicked off the Champ Car season for CART. Drivers praised the course, which ran along 1.8 miles of the city's waterfront. Organizers said the event drew an estimated three-day total of 50,000 spectators, which was about half as many as some race officials had hoped for.
The city of St. Petersburg, which agreed to allow organizers to run the race on city streets annually for five years and spent $85,000 improving rough roads, has no direct stake in how the race performs financially.
"Obviously, the better the race does, the better it is for the city of St. Petersburg, but we have no direct financial interest," said Jackie Kovilaritch, an assistant city attorney familiar with the city's deal with race organizers.
Kevin Dunn, the city's managing director for development coordination, said he has heard a lot of positive comments about the race. Now that more people know what the event entails, he said, perhaps attendance will increase next year.
"We've never had anything of the caliber of the Champ Car series," Dunn said. "I got a lot of feedback that it was a lot more than they expected."
Despite the lackluster financial performance of the race, Dover saw improvement in its overall financial condition. The company's net loss for the first quarter ending March 31 was almost $5-million, or 13 cents a share, down from a loss of nearly $28.5-million, or 75 cents a share, for the same period last year.
Dover also reported its debt was $61-million, down from $78.6-million a year ago.
- Alicia Caldwell can be reached at Alicia@sptimes.com or (727) 893-8145
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