As beautiful Ferraris, Aston Martins, and Porsches race through the streets of Baltimore at speeds close to 200 miles per hour, the experience can be overwhelming. Only in its second year, the Baltimore Grand Prix has been the topic of much discussion since the idea was first proposed in 2009. What can also be overwhelming about the race are it’s economic woes. But who could argue against an event that brings so much focus on Baltimore in an internationally televised event? The organizers promised Baltimore economic prosperity and notoriety.
Those promise makers are gone; the event has gone through three management firms in just two races. After two years filled with mistakes and lost money, the Baltimore Grand Prix should not be allowed to continue another year. The event does not bring as many people to the city or as much economic impact as projected. The more people present, the more money. Declining attendance is detrimental to revenue.` All of the administration of the race has been unable to deliver the promises they made to this city, causing many setbacks and much controversy.
The Mayor of Baltimore, Stephanie Rawlings-Blake, and each organizer of the race have made promises to our citizens that the Grand Prix will bring notoriety to Baltimore through national TV exposure and “huge increases in out-of-town tourism” (Rawlings-Blake). But how “out-of-town” was it? They do not tell you during the 2011 race, hotels reported filling fewer rooms than anticipated, and only 47% of attendees were from out of state (Forward Analytics). The 2012 race was the most watched NBC sports event of the week, but the Neilsen Media ratings were down from the previous year (Lambert). Additionally, the ratings were actually low compared to the higher ratings of the Long Beach Grand Prix and even the Alabama Grand Prix (Lambert).
Despite the good weather of this year’s race, Race On (administrators of the 2012 race) Manager Tim Mayer said the crowds were smaller than last year, and they “expected lower attendance numbers” once ticket totals were counted (Lambert). Attendees of the race, who noted that there was little traffic getting into the city, affirmed this observation; adding that many of the stands crowded last year were now empty (Lambert).
Proponents of the race also argue that the Baltimore Grand Prix brings money into the city. The Mayor released a memo to the city boasting about how the 2011 race brought “47 million dollars in economic impact” (Rawlings-Blake 2012). In addition, after reading the report that the “47 million dollars in economic impact” was derived from, I read into their methodology:
The impact model includes data gathered through survey research with Grand Prix spectators. Specifically, the survey instrument asks spectators to provide spending dollars spent at local hotels, restaurants, retail venues, tourists attractions, and on transportation and parking. In addition, relevant quantifiable data from ticket sales and STAR Reports (hotel reporting) is also incorporated into Forward Analytics’ impact model (Forward Analytics).
Basically, the analyzers simply gathered resources about the gross amount of money spent in the city during that weekend (Forward Analytics). What if these same places spent more money preparing for the event? It is clear that the revenues from the race weekend are actually a lower number. For this year’s race, the race organizers agreed to conduct an economic impact assessment (similar to the one for the 2011 race). This was under public pressure – surely not a comforting sign.
With the media and organizers talking about the money the race brings to Baltimore, has anyone forgot the local sentiment on the race? Both races have caused massive traffic headaches for locals and businesses while preparation is conducted (Sharper et al.). Many restaurant owners, such as the ownership of the famous Pratt Street Alehouse, were frustrated by the race. The alehouse’s patrons were blocked from watching the race by massive safety walls, and they had to listen to the roar of engines over dinner conversation (Sharper et al.). The economic loss due to situations like this was not recorded or quantified. In addition, the environmental impact has been large; with the BGP teams cutting down numerous trees to make way for the race track, to the dismay of local citizens.
Perhaps most important is the management of the race. It has been inconsistent and unreliable. It has gone through three management firms in just two years of racing. The first group, Baltimore Racing Development, was already searching for a new CEO after the first race (WBAL). Baltimore Racing Development then failed to pay the city and vendors nearly 12 million dollars (WBAL). This caused the city to cancel their contract with them. The city was left to search for a new management group before this year’s race. The next group, Downforce Racing, also did not meet the contract requirements and the contract was terminated by the city of Baltimore. Finally, a group called Race On LLC took control of the race. This led to some stability, but the group only had from May 2012 until Labor Day to promote and sell tickets for the race. Despite Race On securing sponsorships from Chrysler SRT, Sunoco, Dr. Pepper, and others the organizers failed to match the attendance numbers of the 2011 race – as they themselves predicted (Race On LLC). This is not just the result of a short timeframe to promote the race; there was a lack of interest in buying the tickets among the public at the price demanded. They had to resort to discount ticket sites such as Living Social to sell tickets (Lambert).
The city of Baltimore is also losing money from the event. The city lost over 1.5 million dollars just in set-up costs for the 2011 race (Brumfield). Despite the Mayor’s claims that the last race had 47 million dollars in economic impact (Rawlings-Blake); those numbers were 23 million less than expected (Jackson). With forecasts for lower attendance numbers and data showing lower ratings for this year’s race, it is reasonable to assume that there will be even less revenue and economic impact in 2012. This means that there will be even less exposure for future Grand Prix Events in the city.
The organizers and City officials in control of the race argue that the Baltimore Grand Prix may do better in the future. The 2012 managers, Race On LLC, believe this as well. They cite revenue lost to startup costs while the race gains popularity (Rawlings-Blake). Eighty-eight percent of the 2011 race attendees said they would attend the 2012 race (Forward Analytics). That statistic was before administrative shakeups that caused the race to have weak promotion and led to lower ratings and most likely attendance. The race has twice performed below expectations of every type, from attendance to revenues. If the race organizers fool Baltimore once, shame on them. What about when they fool us twice?
The bottom line is that it is too unreliable to keep investing money in this risky venture. This is even more evident when considering the bigger picture: Baltimore has a 65 million dollar deficit (Rawlings-Blake). The promises made to the city of Baltimore when this race was first proposed have simply not been met and it will continue to fail to live up to expectations and projections. It should not be allowed to continue.
