Forum: HoseHeads Sprint Car General Forum (go)
Moderators: dirtonly  /  dmantx  /  hosehead

Maybe this is why some people think the tickets are to high.

Resturants usually try to keep there food costs at 30-33%  and then most factor labor and other things in as 33% as well so usually the food you buy is 3x higher than the food cost to make it 

if you apply this to Ticket prices for the Rock N' Roll Gold Cup  you find that if there was 3646 fan a night for all 3 days  you would make a the same profit margin as resturant would make off thier selling product.

Now I went back and saw that someone on a earlier discussion said the seating capacity of Husets was 9,000-10,000  so if you sold 9000 tickets to get the same profit margin you would only have to charge an average of $28 per night.

Depending on who Badlands is bringing in for the Concert but the Bigger Artists usually gets 85% of the ticket sales and the promoter gets 15%

1.) The only thing affecting people's opinions on ticket prices is that individuals interpretation of the value, or potential value, those ticket dollars will return to them. The Knoxville Nationals ticket prices are likely almost cost prohibitive for many people who attend, but the perceived value they get from the racing/after hours activities is enough to justify the cost.  

2.) Since Badlands is a new/unknown entity and trying to promote an event that doesnt make a lot of sense to people (non-points USAC race a thousand miles from home, etc.), the value proposition doesnt line up with the ticket costs.  I would guess that somebody told Badlands' about entering a market with premium pricing as a means to increase the brand's perceived value.  What appears to be missed, is that this model is horrible for customer adoption.  It's a shortsighted pricing model that focuses only on short-term profits, not fostering long-term customer (fans) relations. People rave about Eldora for their $2 beer prices, which is a simple marketing tactic to forgo short-term profits for great(er) long-term customer relationships, same thing applies to their relatively stable ticket prices. 

3.) The Operating and Overhead costs of running a race track are in a totally seperate ballpark than a restaurant. Apples to oranges. 

4.) Your statement about a $28 ticket assumes a fixed cost pricing model, which certainly does not apply here.  More patrons = more concession workers, more ticket takers, higher insurance premiums, etc. 

Dead on the money.

Most places would have a ball park estimate on the amount of people who may attend so they know what they need so the costs would be pretty close to fixed...my point is that if you factor in 250,000 for the purse,$250,000/$83,000 a day operating cost (Which I think is quite Generous) Badlands would still be making a 250,000+ profit if only 3646 showed up at the current ticket prices. I think Badlands would be expecting that there would be more people showing up. Plus none of this factors in  Merchandise, and Food Sales which I believe would a higher profit margin than 33% .

 Obviously I don't no the actual operating costs but I think most tracks get by on less than 83,000 a day .....but maybe not Im sure someone here will tell me this.

Operating Costs should be contained withing 15k, and most tracks are between 5-8.

these facilities don't bring in $$$ every day of the week 365 days a year.  Operating costs include costs for the year (insurance, advertising, salaries, property taxes, income taxes, payroll taxes, water, electricity, equipment maintenance, facility maintenance, etc., etc.).

People make the same arguement about Knoxville making a killing during Nationals, but the reality is that is not the case.  You can't make the assumption that ticket costs minus purse, minus expenses over those 4 days = profit.

The facility cost $XX to sit empty with no activity every day of the year (what that figure is, I don't know, but I bet it isn't as cheap as many believe it is).

If your home is assessed at $200,000 and your property taxes are $2500 per year, your tax rate is ~$1.25 per$1000 of assessed value.  IF the business rate is $2.00 per $1000, a $5 mil assessment would cost $100,000 per year for property taxes.

Let's say that Badlands is assessed value is $5mil, what will property taxes alone run on a yearly basis?  Businesses are taxed at a higher rate than residential in most states, so what is that amount?  Are they paying $100k a year in property taxes (I wouldn't be surprised if it's not more than that personally, so that alone is $274 per DAY every year)?

What about electricity (hate to break this to everyone, but business rates are again HIGHER than residential rates.  My guess is they use A LOT more electricity for just safety lights computers, etc. than pretty much everyone on here uses on a monthly basis at their home.  So what are they paying out on average monthly?  $400 or so maybe

As you can see, all of this adds up and the "profits" made on an event are used to pay these bills when there is $0 coming in the gate from events.  (not to mention what happens when an event rains out and you have the expenses (advertising, payroll, insurance, etc.) and no revenue to offset it.

While I personally think the ticket prices are out of line, the only decision I get to make is whether to attend or not.  I'm fairly certain Chuck's finance people are telling him that he won't make any $$ if he charges less.

Knoxville is not a good example for one particular reason. It's a property owned by the county as it is a part of the County Fair. So taxes in particular are probably assessed at a much lower rate than say a privately owned racing facility or other business. Most if not all of the race tracks in our neck of the woods are county facilities. Badlands is a privately owned facility/business, so it is probably assessed differently. But I have to believe the property value is pretty reasonably assessed because in all reality the property isn't really suitable for much else. Have you ever been there? As for the off season, there isn't much electricity flowing through it at all, or water usage, so utilities would be low, also. And I know the insurances are spiked on race days and I would think the insurance costs are reduced during the off season. Regardless of all all those things, ticket prices can be priced at what ever price a promotor or owner wants. No limit. But, like anything else, there are models that should be considered when trying to attract a particular crowd like race fans. To pay more for this event than the Knoxville Nationals tells me that the finance people you refer to that Chuck may be listening to are just like Chuck.....nuts! I know you also feel the ticket prices are out of line so this is not intended to reflect negatively on you. I just can't believe that overhead is the determining factor of the ticket prices. I think it may be more to do with the fact that he is used to a very fast and large return on his money in his other business' and wants to do the same with Huset's. 

I was speaking about Badlands (pretty sure it's private) in my example.  While I don't particularly like the switch to Saturday nights, it's his business and he can do as he wants.  Everyone on here (and multiple other message boards) always use the same reasoning no matter what track it is, they think that ticket prices  multiplied by capacity  minus purse = profit.  That is simply not the case with any venue....

As far as insurance goes, no insurance company is going to lower their rate on non-race days (the racing insurance through KLK Insurance for the event is seperate insurance alltogether), the facility itself has to be insured for loss due to natural disaster (and in their case at Badlands, they probably are required to have Federal Flood Insurance as well), fire, theft, etc.  That would be based on what it would cost for the insurance company to replace it in the event of a total loss.  You can't just take the insurance off of it when race season ends.

Utilities are still going to be wayyyy more than many people think.  In my previous job, i ran a retail store (~12,000 ft2) that we only ran the lights from 9am-6pm daily - electricity was over $5000 per month (in 1997).  that was with the most energy effecient lighting available at the time.  Water, the water company is going to charge the minimum every month no matter what, you can have it turned off, but they will charge you a fee to turn it off and then turn it back on again in the spring, so it's probably a wash.  unless they have their own well on site at Badlands, during the Summer Months they are probably using 100,000 gallons of water or more per month (take a look at your water bill and extrapilate), and to top it off, they more than likely have to pay city sewer fees in Brandon as well (sewer fees are typically DOUBLE that of the actual water usage in most cities).

I'm not defending Chuck's ticket pricing, seems too high to me for what they are offering (both for me, and the racers ($350 to start, which is less than 1% of the winners share)). 

Only time will tell if his business model is successful.  It can be debated and bit$hed about until he## freezes over.  My opinion is that Chuck believes he can draw a crowd at those prices and he'll make a bunch of $$$ (which is what he is in it for).  If he doesn't draw a crowd and loses $$$, it will be interesting to see what their "plan B" is (that is, if they have one).

 I don't think I will be able to afford this Badlands show. Not to far from home but the cost for GA is outrageous. I will always go to Knoxville for nationals and that is a big expense just 2 weeks before. What he has to offer for a sprint car program is not worth the price to get in.

You can tell an ass... but, you can't tell 'em much

From the BMS website, Gold cup tickets for the 1st two nights are now $40, & the final night is $50
Or you can get the 3 day pass for $110.

Pity the poor fools who may have already purchased their tickets at the original prices.

No doubt about that. Hopefully they'll get a refund.

Can't find anything on the concert. Who's Playing? Is there a four day ticket? Some need to decide and plan how many days we are coming for.

All have been fully refunded

Thoughts? Yes. If you can't afford to go don't go. I can afford to go and will be going. End of thought. 

I don't think you will see any more then 35 wingless sprints mid 40's for the WOO I would go to wingless show for $25.00 but not $60.00  Glen Murra

Closer to $10 million. It's all done.