Mazda Raceway Laguna Seca is beginning what's being called a transitional year of racing while facing a budget deficit.
For the first time since 2005, the MOTOGP World Championship won't be stopping on the Central Coast. While the announcement regarding MOTOGP's departure was made months ago, Central Coast News has a better explanation for why there was no other choice.
Despite bringing in tens of thousands of fans each year, many of them international fans, a tough business decision was made by Mazda Raceway's CEO, Gill Campbell.
"If we had done it, we would have lost about $800,000 dollars and I couldn't do that to this organization," said Campbell. It wasn't an easy decision, because on a personal level, Campbell loved the event and the exposure it brought to our Central Coast region.
"From an emotional standpoint and I have to admit from an egotistical standpoint, it was one of the hardest decisions I've ever made," said Campbell. "We worked so hard to bring it here, and it was so hard to have to let it go."
The split was based around finances, according to Campbell. The 3-day event weekend cost Mazda Raceway an estimated $9.5 million to produce the event.
Consider the costs; the sanctioning fee paid to DORNA (the series sanctioning body) to simply bring MOTOGP to Mazda Raceway was nearly $3 million dollars each year. And that's just to bring the show to town!
There was an additional $6 million for the remainder of the operational costs, which covered everything else, from the equipment, the extra staff, even down to the tables and chairs that were shipped in for the weekend.
Unfortunately, the track is now left with a budget gap of $2.5 million. While Mazda Raceway is now on a 3-year-plan to get back on steady financial ground, Central Coast News learned the state of California was part of the problem.
At least, you could argue that California didn't help the situation.
"At every other circuit around the world that hosts a MOTOGP event including Austin, Texas and Indianapolis, Indiana, they get government subsidies, we don't," Campbell told Central Coast News' Marc Cota-Robles. When asked why, Campbell said, "because California doesn't do that."
Simple as that.
It's a tough financial blow, knowing what could-have-been for the event's future, beyond 2014. That's because MOTOGP alone created a $100 million economic impact to Monterey County. That amount covers the general tourism impact with visitors staying in hotels and dining out at our local restaurants.
In return for that huge economic impact, Mazda Raceway did not get any kickback or tax credit from any government body. That 'lost figure' was estimated to be $2 million dollars a year. Over nine years, that's a potential $18 million dollars our local race track never saw.
To get further insight about what other circuits are dealing with, Central Coast News contacted Mel Harder, at Circuit of the Americas (COTA) in Austin, Texas.
"I was quite surprised when they were not going to have an event in 2014," Harder said during a Skype interview.
Harder is the general manager at COTA, which has hosted the very same MOTOGP event for the past two years. But COTA and Mazda Raceway are very different in terms of government subsidies. "You see a return on investment, it certainly creates a huge economic boom to the city," said Harder.
That return on investment that he's talking about comes from the State of Texas as a special fund. It's based off the sales tax and collected over the race weekend. For COTA, it's more than a million dollars back in their pocket.
Campbell told Central Coast News about the other track that currently hosts MOTOGP in the United States, Indianapolis. The Indianapolis Motor Speedway got a $100 million grant from State of Indiana for upgrades and operational expenses, said Campbell. She told us, "Mazda Raceway cannot compete with that."
Still, there are no regrets at Mazda Raceway; and Campbell is looking at the big picture impact from the event. "Our mission statement is to bring world class motorsports to this community to benefit our sponsors, our community and our charitable organizations, we were fulfilling that mission," said Campbell.
Will MOTOGP World Championship ever return to Laguna Seca? That's a possibility, said Campbell. She added, "We have to get healthy again before we can reach out and bring that show back."
John David, the Communications Coordinator at the Monterey County Convention and Visitors Bureau had an optimistic outlook surrounding the departure of MOTOGP. While it was guaranteed "heads and beds," the weekend is now open to benefit the tour and travel industry. David said in past years, tourists would be turned away or encouraged not to visit on the MOTOGP weekend, if they were not attending the event.
"But motorcycles haven't gone away," Campbell made clear. Not to be confused, fans of motorcycle racing will still see racing action on 2-wheels this season. The ENI FIM Superbike World Championship" races at Laguna Seca, July 11-13.
The Superbike event is one of 5 major race weekends on the schedule in 2014. The Continental Tire Monterey Grand Prix is the first event this year, to be held May 2-4. The Monterey Grand Prix will feature the Tudor United SportsCar Championship.
"This is a gem, this belongs to the people, I wish more people would come up and see us, it's great entertainment and its not just about racing," said Campbell.