Unlimited Hydroplane race sites have to make major changes to stay financially viable
Lack of major sponsor dollars have taken their toll on race sites. Nearly every site has had financial struggles where sponsors either couldn't be found in time, or in some cases, didn't pay their bills.
It's nothing new for event planners who deal with this sort of thing all the time. But it does make for some difficult decisions that include re-evaluating what events to include, or not to include, at each race site.
In the Tri-Cities, Lamb Weston stepped up to fill the void left when Anheuser-Busch pulled it Budweiser title sponsorship, just a year after announcing that they would be associated with the event "as long as hydroplane racing stays in the Tri-Cities." Even with the title sponsor secured, the race committee had to re-evaluate budgets and make tough decisions.
The situation for San Diego has put the event folks in the position of having to make difficult decisions as well. They opted to cut back in several areas, including not paying the appearance fees for the unlimited hydroplanes. Because of that, two race teams have said on the record they are staying home (U-100 from Fred Leland and U-3 from Cooper Racing).
"This is not unlike any other corporation or race site," said U-16 Elam Plus driver Dave Villwock. "They need to make adjustments financially and they are doing just that."
"Every single decision we made in the Tri-Cities had to fit our agenda - maximize revenue and minimize cost," said Kathy Balcom, a past-President of the Water Follies association who was brought back in with two other past presidents to take a fresh look at the organization. Taking a look meant re-evaluating everything. "Just because it had been done that way for 42 years, that alone didn't hold any clout," she said.
Finding major sponsors is darn hard work. And organizations, like most of the race sites, are generally run by good, community-oriented people who volunteer their time. And that sometimes mean decisions aren't made with attention to the bottom line. "They told me they had problems. Honest to God, I had no idea how bad it was," said Balcom.
Balcom said a lot of the sponsorship deals were done at break-even. For example, the HAPO credit union sponsorship of the unlimited lights brought in as much money as was paid out to the lights to appear. So on paper, it looked like a break-even deal. But when you started to add in all the extra costs that are associated with hosting the additional class of boats, it was really done at a loss. Balcom said no event can survive at a break-even point, or running parts of the event at a loss. Based on the amount of available sponsorship deals, "we just couldn't afford them," she said.
So the Water Follies had to make a tough decision. The lights wouldn't race at the Tri-Cities. "It was one of the most difficult decision we had to make," said Balcom. In their place, they got the vintage boats. "We got the vintage boats for less," Balcom said. They put on a great show and the organization kept more of the sponsorship revenue, which allowed them to spend in other areas.
The lights weren't the only changes. A number of sponsorship packages that had been offered for years were pulled off the table. They had been providing services at the same price for many years, but the cost of providing those services had risen dramatically. In several high profile cases, the organization was spending dramatically more money providing the service for a private party than they were charging.
So certain amenities people in private areas were used to had to be eliminated, changed, or they had to pay more for them. In other cases, there had to be cutbacks when additional funds couldn't be raised.
There was quite a bit of criticism over the air show in the Tri-Cities that flies over the Columbia River between races. It wasn't quite up to the same standards as previous years. Now to be fair, the A-10 warthog that was a big part of the show had to be grounded when it hit a bird and put a big hole in its tail, but there simply wasn't a budget for the number of quality aerial acts as in previous years. Again, a decision that had to be made for the greater good.
Think of this way. Let's say you're putting on a rock concert. Between ticket sales, sponsorships, etc. you were able to raise $500,000. But the rock group charges $500,000 to show up and perform. But you've still got all the costs for the venue, security, permits, print costs, advertising, tickets, etc. You couldn't afford to put on the event. And then, think about running the whole things with a staff of volunteers! That's the situation these event sites find themselves in.
The Detroit Regatta has not been immune from the difficult financial times that most race sites have faced. The last three year for the Detroit Regatta have been difficult years financially.
"It took a big hit last year (2006)," said Mark Weber, former unlimited hydroplane driver and current Director of Operations for the Detroit Regatta Association. "It lost small amounts of money for a couple of years, made some for a few years," said Weber.
They've made changes to the way the weekend is managed in Detroit. Weber said they were able to reduce the budget by $85,000. "We're getting down to the nitty gritty," he said.
Weber said there's been a big turnaround. "Black ink is in our future," Weber said.
In the Tri-Cities, Balcom would love to have the lights return. "We'll review it in future years," she said. But it all comes down to budget.
"When Anheuser-Busch decided to pull out, it affected a lot of places," said Villwock. "Without a big sponsor, you have to re-evaluate what's needed." That's the new reality.
"As much as everybody wanted to spend the money, and we wanted to continue to do the giveaways, freebies, and trade that had been established over the years, we just had to say no," said Balcom. "I knew we were going to tick off a ton of people."
"I would wake up every morning going 'Yikes,' said Balcom. "But we knew it was for the good of all (the event as a whole). We had to put it together like a business."
"The only way we could do this was to get an investment commitment from the community - which we did - then watch every single dollar that went through the door, and say no," she said.
"I hope they can get that done," said Villwock about San Diego. "It's a great place to race."
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