MotoMatters.com | Kropotkin Thinks

more money than MotoGP itself?

A venture capital firm financing a purchase? I thought the point of venture capital was for people with too much liquid assets, go give the firm their money and they in turn invest the millions/billions in cash in different ventures, like MotoGP, startup companies, other private firms? Maybe that is just around here.

Nice one clx. Anyway,this isn't about Rossi. Its about supply and demand.
One area where F1 has always eclipsed GP in the modern era is 'bang for your buck' so to speak.
A rule rethink (yet again) may be worth looking at. A GP runs a frenetic 45 minutes or so,whereas an F1 race has far more nuances to captivate its audience for up to 2 hours.
FI is the pinnacle on tarmac for 4 wheels as is GP on 2. The difference is that F1 throws up more long term suspence. Generally,these days, a GP race is fairly predictable after the first 1/4 of the race,barring the odd controversy and/or catastrophe. With F1,'Johnny come lately' is in with a shout at a surprise finish should he keep it together,merely because of race distance if nothing else.
Keeping a TV audience captive for a longer period of time generates more revenue. Demand drives the supply and the pair feed off each other generating revenue.
Lets face it. On any Moto GP or F1 Sunday, the vast majority of F1 afficianado's will devote Sunday afternoon to F1. The majority of Moto GP followers that I know in my neighbourhood dedicate about 1 hour on any Sunday to the sport we are fanatical about. You get the picture. 'I want to watch the GP race,so tell Aunt Polly we will be there a half hour late'. F1 Sunday 'tell Aunt Polly we can't make it Sunday..sssh, I'm watching F1'.
I reckon GP has to elevate itself in terms of support events. F1 is THE event of the day on 4 wheels. GP certainly is on 2 wheels, however, its captive audience time frame is too short. Dorna should perhaps consider thinking in terms of keeping any Sunday's semi-commited 2 wheel audience captivated by TV for the entire afternoon,by lengthening the spactacle from a 45 minute dash to maybe a full hour or 200km fast canter/gallop. The cream will rise to the top anyway,but the potential unpredictability of the spectacle will no doubt reschedule visits to Aunt Polly in line with F1 Sundays.
Any hardcore GP fanatic will not miss a thing from Red Bull rookies,through 125,Moto 2 and of course GP,but for the general GP neighbourhood fan, the organiser's may consider captivating the premier audience for more than 40 minutes on any Sunday.
If that means another 6 litres of race fuel coupled to better economic viability/ profits and spectacle for Moto GP,
Hell !!! Why not ?

The delta in profits between Moto GP and Formula could probably be explained in merely the difference in sanctioning fees. From what I understand Moto GP charges only around $1.5 to $3 million for the privilege for hosting a race. Formula 1 on the other hand charges from $15 to $30 million.

For Moto GP to even charge half of what Formula 1 does per race, they'd have to dramatically improve the draw of Moto GP, and that would result in fans paying a boatload more money to watch a race. I certainly don't want that to come to pass.

That said, if Dorna could expand the fanbase of Moto GP significantly they could at least get better TV deals and attract more blue chip title sponsors. I'd imagine that'd be good for boosting their profits a by a few million per year.

Maybe this is where Dorna wants to go by having 3 GP rounds in the US. At the end of the day, Speed's coverage is horrible - 45 minutes of racing where we miss a couple of laps every commercial break, and 15 minutes of a completely lame pre-race show where the announcer simply seems to take pleasure in pronouncing rider's names properly.

If 3 races is able to elevate the US's perception of MotoGP (something which I have strong doubts about) then maybe Dorna would then be able to negotiate rights for a decent TV package that could bring in more revenue. If Dorna can generate enough interest and show the US market that their product is viable and has an audience, then maybe a major network or ESPN would be interested in the property.

Making the GP races longer would certainly help, but they should have enough content between the 3 classes to fill 2-3 hours on a Sunday. They just need a TV package that lets them string it together, instead of an hour at 8 AM, an hour later in the afternoon, and an hour on Tuesday for the 125cc race.

Of course that means that fuel limits would have to go, which I don't think should make anyone too upset.

And Thus revenue - By widing the awareness / appeal in the U.S of Motogp.

Many of my friends have no idea what motogp is and sending them a clip is pretty challenging as the fun police at Dorna have them down usually within hours. One thing dorna is extremely good at taking clips off of Web in record time.

If they'd let some of this slide they could attract more views, more advertising and subscription dollars? Just a thought. (I can't belive the audience they get for Nascar - not nearly as exciting as Motogp).

Great article David something I have had interest in for along time but had very little idea about.

Bernie Eccelstone knows that television is where its at when it come to generating revenue, not so much the money that comes through the gate. So for the most part, F1 makes its money from the sanctioning fee and TV ad revenue. The gate, concession fees, track advertising, etc is how the promoter recoups his fees, and hopefully makes a profit.

Bums on seats are a huge liability, requiring a safe environment (not easy) food, water, toilets, policing, and safe entrance and exit strategies. So expanding the gate (can they possibly get more spectators into Spanish tracks?) or increasing the price of admission would only marginally increase Dorna's revenues. (through an increased sanctioning fee).

So Dorna has to re-think its entire marketing strategy and take some lessons from F1, which is seldom as exciting as a good m/c race, regardless of class, IMHO. Some good ideas have already been expressed, but unless all M/C race organizations find a way to make TV coverage more relevant, meaningful growth will never be realized.

ghostdog. The US coverage of GP on Speed is horrendous. 45min of racing, missed laps due to commercials, joke of a pre-race show and zero post race coverage of press conferences and interviews. How do they expect to expand GP's audience if they don't even give their current dedicated fans more to chew on? Look at F1: practice session coverage, 1 and a half hour qualifying show, half hour pre race show, long race with great analysis, post race press conference and analysis and dedicated round table shows later on for more in depth analysis. How can GP in the states compete with that?? I don't think longer races will ever materialize but they could definitely make huge strides with better coverage. My suggestion (if it was worth anything) would be to have a dedicated 30min pre-race show (similar to what all the major sports in the US have), show moto2 afterwards as the appetizer, GP as the main course after that and definitely have at least 15min of post race press conferences and analysis. That would be a solid 2 and a half hours of GP racing that current fans would kill for and introduce several more people to the sport. Of course this is just a wish and the odds of speed reducing its obscene amount of NASCAR coverage for motorcycle racing (something that used to return responses from friends of "Moto what??" when I tell them I won't make the Sunday morning ride because I have to wake up at 7am to watch a race out Portugal) but one can always hope...

Years ago, Bernie Ecclestone didn't walk away from his chance to buy MotoGP for no reason...

Bridgepoint allegedly own 75%. Dorna owns 20%, and IIRC Ezpeleta himself still holds 5%. We don't know how they chop the pot, but let's assume that a vast majority of the expenses are run through the sport. If that is the case, Bridgepoint would be taking about 20M-30M out of MotoGP--barely enough to cover the interest on their debt (assuming they borrowed 500M euros).

As Suppo has pointed out, MotoGP spends all of its time plotting cost cutting, but raising revenues is the real problem. Let's suppose that MotoGP spends around 100M on the show (like F1), and let's assume they pay IRTA a piddling 50M to show up. If that's the case, Dorna and Bridgepoint are chopping up just 60M. Everyone is getting screwed by this arrangement. The manufacturers are not getting paid. IRTA are not getting paid. Dorna is not getting paid. The fans are tired of the piss-poor racing and the grid contraction. Bridgepoint is probably barely breaking even.

And so the dilemma presents itself. The fans hate the 21L rule, and outside manufacturers cannot play as long as the 21L rule is in place. If we eliminate the 21L rule and upset the apple cart, will it lead to significantly higher revenues?

The answer is yes, but half-a-billion-euro loans have a tendency to make executives balls shrivel. They will attempt to solve the problem by doing as little as possible. Unless they catch a break, it won't work.

Sounds a lot like my last job - they spent their time making nickel and dime cuts in cost, and never bothered to assemble a sales team capable of going out and getting more money in the door. Dorna really is in a tough situation - the racing won't improve until the manufacturers no longer have a stranglehold on the only race-winning equipment (and rightfully so, as they designed and built it) and really I can't see bringing in the more casual fan unless the racing gets better - and by better, I mean bikes scrapping for the win. Personally, if I want to see a good dogfight, I watch WSBK. I watch GPs because to me it is interesting to see who has been able to achieve the best setup and who can run the most mistake-free race - the race to me really is the culmination of the weekend's work, but unless something untoward happens, the result is usually pretty well obvious. Because I love and appreciate that aspect of the sort, GP interests me. I don't think a casual fan is going to get that.

Apparently Ducati sales are on the rise in the USA, not surprising considering they seem to be actually marketing using things like product placement. Recently I have seen the Ducati desmo prototype mentioned and pictured in two TV shows, and I just read it is featured in the remake of Tron. F1 does it (Iron Man 2), I'm sure they got a whole new bunch of casual fans from that venture into advertising. Also BMW pulls out of F1 and instead spends their budget on movie product placement.

I watch the ASP World Tour (surfing), they provide free live streaming of all events and free on demand viewing of sessions, I guess they do it to increase their fan base and visibility, If your visible and you have good products to sell, it does not take a genius to understand you will make money. I am not suggesting Dorna gives up its subscriptions, but their removal of free video from you tube etc is like marketing suicide.

60 Minutes Australia did a story on Casey Stoner & Chris Vermuellen in 2008, it was a human interest story, featuring some footage of MotoGP, amongst a lot of other things. Dorna removes it for copyright infringement, but does not make it available on their official you tube site. They just take anything of interest away and then it is gone, and tracking down a copy is way to much work even for a fan of the sport.

I wish Dorna would wake up, MotoGP really should have a huge fan base and not just in countries that have a high percentage of motorbike riders.

Maybe if Dorna would take note of the fact that blocking people from uploading things to YouTube is keeping their baby out of the public eye…

Sure, if someone uploads a whole race that's a no-good situation, but if someone uploads a couple of neat clips? That has no downside in reality.

whilst the Spanish Motorcycle Federations are doing such a sterling job of promoting riding academies and programs, they allow a fuster cluck like Dorna to progressively eliminate the opportunities for their many graduates to attain the results they aspire to.

The teams need to grow some cajones, organize a FIM sanctioned breakaway series with a competent promotional entity and tell the MSMA and Dorna to go forth and multiply.

On the American West Coast we have a company called In-N-Out Burger. It’s hard to imagine a business that generates more long-term loyalty - multi-generation loyalty. My parents took me there as a child; I take my children there. The respect for their business is somewhere between religion and jealous love – for a great product, but in no small measure for keeping it simple and pure in a topsy-turvy world. They have not let the market success, of say McDonalds, denture them from their obsession.

Product success is NOT measured by finance alone. I can’t help but think of Bernie and the F1 boys dreaming of ways to “get more of what MotoGP has”.

Bridgepoint/Dorna/MotoGP (granted, no In-N-Out, nor will they ever be) nevertheless should be informed by F1 but not let them, or anyone else, defocus them from allowing MotoGP to stay its own path to product righteousness.

And say maybe the mistake is that they are overestimating the size of the product they have to sell. As much as I love and live motorcycling it is not something that has (or will) catch the interest of the general population. And racing sport motorcycles is a niche part of motorcycling in general. Cruiser riders, a large portion of riders here in the US at least, for the most part have little to no interest in roadracing. Same for dirt riders. Do the hundreds of millions of scooter riders in Asia care about MotoGP or low gas costs? Given the limited appeal of the product, how can they possibly hope to compare to F1? F1 is a cultural icon worldwide. They have Ferrari, another worldwide icon. Not to knock Japanese mfgrs who are the backbone of GP bike racing but they have only rarely been producers of collectible exoticia and have nowhere near the cache of Ferrari or even Lotus or Mercedes. That is where F1's luxury multiplier comes from.

Add to this the problem with buying at the height of the market and expecting to expand and instead hitting decreased valuations and financial contraction there should be no surprise over the financial condition of MotoGP. Their profits are eaten up by interest payments on the huge loans. Yet another reason I find it funny that they did not fight tooth and nail to be able to keep tobacco and alcohol sponsorship. Yes, I would be happy to run a team with their sponsorship. Rossi along with many other racing greats did. Ducati still is though I wonder how long they will be allowed to.

An analogy is there's no sense building a huge stadium if you will never be able to fill it. You'll only look bad by having half empty seating at best and huge constructions costs to repay. If bike racing is only attractive to a small percentage of the population then plan accordingly. Never give up on trying to attract new adherents but don't make selling outside your core audience a main part of your plan.

Chris
http://moto2-usa.blogspot.com/

I hope Dorna can help themselves this way but...

1) Just about everyone in the world can identify with cars (even motorcyclists). Relatively very few in the world can identify with motorcycles.
2) Actually only a small percentage of avid motorcyclists can be called motorcycle racing fans.

Even though motorcycle racing is far more exciting than car racing, because of the above mentioned reasons, it will never be as popular (or as profitable) as car racing.

As a die hard racing fan this does not concern me in the least.

MotoGP, or WSBK or any top of the shelfs motorbike competition, could attract far more viewers if given enough advertisement time. It's not about the show (cos we know it's exciting), it's about how much people are anticipating it. And how much you make them want it bad.

Give it enough budget and care, good directors, editors and a known tune below it and MotoGP would become a favorite cos it is spectacular and as said Acidraine, you don't need to be a biker to enjoy it.

There's an interesting thing happening here, in Belgium. RTL Sport, one of the biggest media corporation in Europe, is sponsoring a Belgian rider in Moto2. It's advertised on their main national channel and already attracting people outside the "motorbike niche". They have been sponsoring a Superbiker event for a few years now and this event attracts bikers, of course, but also families and people having little to do with the sport and it has become a major all sport event of the year, with tens of thousands of people showing up. Why ? Because RTL has made it look exciting, fun, thrilling (and dangerous while glossy) and they advertise it on prime time TV, numerous time, over and over, treating it like they would treat a soccer game finale or F1.

So, I reckon one of the obstacle to Dorna and FIM is to really believe it can indeed become a multi-million viewers event every sunday and start treating it like something that is indeed marketable: put ressources where it matters (outside the niche and make it shine).

Truth is, you don't even have to lie your way as the show IS exciting, fun and thrilling (and wait if you give back 24L to the 1000cc...).

Of course F1 may always have a wider audience but the ratio towards MotoGP is completely unproportioned.

There are more card drivers than motorcycle drivers but football (soccer for the over the pond) is enjoyed but loads of people more than actually play it. So is tennis and many other mainstream sports.

Dorna on top has (very soon had) a wonderful sweet spot by having in these days an extraordinary champion where some other sports are lacking a personality figure able to draw media frenzy attention. Just consider that Rossi is in the top 10 of most payed athletes in the word!

Thus I believe is legitimate to ask if something better could (should) be done to raise that commercial value of this sport.

I am not saying I have the answer or that it should reach F1 popularity .... but something better than this is not out of the equation.

i rode, but did not follow racing until i saw faster. i had seen races before but never cared i did not know the backstory, faster taught me this, then it began to spread, after motogp, ama 1000's and 600's, then wsb and wss, then the 250's and supercross, even bsb, and stopped with 125's. all started from faster, i no longer watch ama racing as the idea of nasbike does not excite me. the one thing i never see on any tv here is the us is commercials for any motocycle racing. just some background info on the racers with a montage of wrecks and passes is more than worth it's weight in gold, the friends that will watch it with me are mainly waiting for a crash, an awesome pass is not beyond them but i need to point out what happened for them to understand the beauty of it.
-2cents

I personally don't think the current state of GP racing will strike the hearts of the world anytime soon irrespective of how exciting they make it look through new advertising campaigns.

Over here in Australia one of the biggest (and most profitable) markets is V8 Supercars. Dinosaur technology and only two makes (Ford vs Holden) yet it strikes up passionate supporters through generations who all serve up their own version of one (red or blue) eyed support to the series. The racing is generally pretty close and unpredictable, and most of the year it builds up to the zenith of the Bathurst 1000 (the traditional 1000km race at Mount Panorama).

It's a simple concept but they are printing their own money.

I love motorcycle racing and have lived and breathed it since my old man and uncle used to drag me out to Oran Park to watch the Doohans and Gardeners of the time.

But MotoGP is often pretty lacklustre in excitement, and the racing relatively processional. A few flag to flag races and some press conference attitude aside, it's a pretty hard sell to the casual fan let alone trying to sell it to a complete outsider.

I know that I am simply stating one of the problems and not offering an alternative, but if WSBK can produce the grid numbers and close racing that they do at any given meet, I really don't see why the apparent pinnacle of the sport can't aim up and grab the sport with both hands, shake the living fuck out of it and bring back the excitement.

Cheers

There IS NO product righteousness in the 4 stroke era. The whole movement has devalued the RACING in favor of the machinery. The only hope for the series is to promote closer racing and racing personalities from ALL the major markets including S. American and Asian countries, which will bring more advertisers and TV money into the sport. Bridgepoint is losing and will lose a bundle on this deal. It's "buy low-sell high" not "overpay-then-overhaul"...these guys always think they are smarter than they really are.

I just finished the book “MotoGP Technology” and, ya know, it’s a must-read. Paramount information. I’m familiar with the esoteric nature of Formula 1, but had no i-d-e-a the depth of technical rigmarole in MotoGP. I knew it was hidden there somewhere, but it’s rarely discussed in broadcasts.

When reading I kept thinking about all the bellyaching I’ve heard over the years (online) about how “real racing” is now a thing of the past in GP. Many people look askew at high-electronics, fuel restrictions, and other recent developments and controls – the formula. I feel many such people are completely missing the point of a “prototype” series: they’re missing over half of what’s going on here.

What MotoGP broadcasts need is a Steve Matchett type character to highlight and discuss (with rightful glee!) the more technical aspects of the series – to bring the broadcast back into alignment with what the sport currently is – a constructor’s competition, as much or more than a riders competition or team effort. Maybe the trackside reporter can step it up a few notches (or be replaced?) All the current announcers can muster is inane discussion on prime tires – I mean hard tires – I mean white.., or was that red? They can’t even get tires ..squared away. (Although, in all fairness, Steve Matchett’s crew botches that one too.)

Consumer’s understanding what the product actually is seems to me a critical first step to financial success.