\u201cPeople would call NASCAR on the Monday after the Daytona 500 and say, \u2018I want to build a racetrack in my area.\u2019\u00a0 NASCAR\u2019s response is ‘well we\u2019re not in the racetrack business.\u00a0 We\u2019re in the sanctioning body business.”<\/p>\n
by Michael and Ziva Allen<\/p>\n
http:\/\/www.autotrackdaymonthly.com\/index.php\/articles-general\/featured-articles\/trackextras\/254-tim-frost-takes-us-behind-the-scenes-of-the-motorsports-industry<\/p>\n
June 1, 2014<\/p>\n
<\/p>\n
![\"frost1\"](\"http:\/\/www.autotrackdaymonthly.com\/images\/frost1.PNG\")
A bunch of rich folks are sitting around the paddock after an event and they start talking about how they want to buy some cheap land in a rural location and build a track.\u00a0 \u201cHey, great idea!\u00a0 Then we can drive whenever we want.\u00a0 And yeah.\u00a0 We can write off our track driving costs and probably make money too.\u201d<\/p>\n
If they are serious and smart, the first thing they do is call Tim Frost.\u00a0 When looking for the ideal consultant, then Frost is the ideal motorsports industry insider to have on your side.\u00a0 All of his businesses revolve around motorsports, and yet he is not a driver. \u00a0In fact, Frost will tell you that if you have a question about driving, do not turn to him.\u00a0 Drivers are emotional.\u00a0 We love track events and our cars and we think everyone else will too.\u00a0 But Frost brings objectivity to the scenario.\u00a0 And that is a good thing.\u00a0 Otherwise the venues we love to attend would probably sink like rocks without that business perspective. \u00a0Frost does not participate in the hobby.\u00a0 \u201cI came into this industry from a little bit of a different background.\u00a0 I became involved in this industry from a business perspective.\u00a0 I didn\u2019t come in as a driver.\u00a0 I didn\u2019t come in as a sponsor.\u00a0 I didn\u2019t come in as a manufacturer.\u00a0 In the mid-90s I came in actually from a corporate finance background.\u00a0 A numbers background.\u00a0 And while I was with one of the larger accounting firms, I was working in our sports and entertainment division doing appraisals, finance and evaluation and we got involved in doing feasibility for a proposed racetrack in the Detroit, Michigan area.\u201d<\/p>\n
Frost got involved early on and found a niche that was not being filled by other experts.\u00a0 \u201cThe ability to prepare some type of analysis or study of the industry is what our clients needed.\u00a0 Nobody was doing work in that aspect of the sport nor had the ability to find out information, such as the economics of the sport and the numbers behind the industry, from an event perspective and from a facility perspective.\u00a0 It really didn\u2019t exist.\u00a0 So we worked on that.\u00a0 In 1996 we worked on a project at Gateway International Raceway.\u00a0 At that time, the developer of that facility was Chris Pook, the founder of the Long Beach Grand Prix.\u00a0 That in itself was quite the eye opener, to work with someone as esteemed and respected and knowledgeable as Chris Pook.”\u00a0 Frost comes in, analyzes the proposed facility and makes his recommendations.\u00a0 As he says, “If you build it, will they come?\u201d\u00a0 Frost has the answers.<\/p>\n
There are various revenue streams needed to keep a track afloat.\u00a0 Frost explains that \u201cby assessing the economics of the event, you\u2019re basically looking at revenue and expenses associated with that event.\u00a0 And in that case, with a motorsports event, you\u2019re typically looking at four different types of categories.\u00a0 One would be admissions, one would be track rental, one would be sponsorship and advertising and another one would be concessions or food and beverage.\u201d<\/p>\n
In order to realize the greatest revenue stream, Frost encourages maximal use of the land and the resources available.\u00a0 For example, multi-purpose facilities that are set up to run more than one event on the same day give a better return than single purpose facilities.\u00a0 \u201cIf you look at some of these tracks that have two circuits,\u201d says Frost, \u201cyou have two in and out roads and the ability behind that is to have pit areas which can serve both so there\u2019s a practicality with separate circuits and the ability to run multiple configurations independently.\u00a0 So if you take Palm Beach, for example and if you go back to the Moroso days, the road course, which is a return road and part of the drag strip – well that meant that only one circuit could be used at a time.\u00a0 So that meant you were limited on the amount of event days.\u00a0 Part of their redesign was to then separate the drag strip from the road course.\u00a0 And therefore each could be operated independently without having to close any down.\u00a0 So if we take a place like Palm Beach, we would typically divide that place into three, four maybe five different venues. \u00a0We would take the drag strip, the road course, go kart track and then we would probably take part of the paddock area that is being used for the parking area.\u00a0 And then you could take the mud bog.\u00a0 Each of those has its own ability to be programmed to generate revenues.\u00a0 And the whole idea with a facility like that or any facility is the word \u2018utilization.\u2019\u00a0 How many days or event days could we get out of the place to keep it going and to bring different groups in there?\u201d\u00a0 When Moroso sold the company and it became Palm Beach International Raceway, the tracks were re-designed and some turns were sacrificed to allow for the multi-usage Frost discusses.\u00a0 In fact, for some, their all-time favorite turns are now gone!<\/p>\n
Just to give you a sense of the counter-play between emotion and practicality, Frost talked about just one way that he acquires his projects.\u00a0 \u201cWe found out the sanctioning body for the leagues would get calls all the time saying, \u2018hey I want to go and build a racetrack, what do I do?\u2019\u00a0 Well typically people would call NASCAR on the Monday after the Daytona 500 and say, \u2018I want to build a racetrack in my area.\u00a0 I have a whole bunch of land just sitting around.\u2019\u00a0 NASCAR\u2019s response is well \u2018we\u2019re not in the racetrack business.\u00a0 We\u2019re in the sanctioning body business.\u2019\u00a0 So the next question will be, \u2018who do I contact?\u2019\u00a0 And then they would get in touch with me.\u201d<\/p>\n
As a consultant, Frost is often called in to work closely with track designers.\u00a0 Says Frost, \u201cYou get Alan Wilson and other people similar to Alan and they know the designs and the ins and outs of what it takes to engineer or to design a facility.\u00a0 So Alan would come in and he would design the place but then people would potentially need the business plan or a feasibility study or some other type of document and so Alan would say, \u2018hey here\u2019s a person you may consider calling.\u2019\u00a0 I\u2019ve been fortunate to work with Alan on probably half a dozen to a dozen projects over the years.\u00a0 Alan is highly respected in the industry and people know who he is and he kind of has his signature design.\u00a0 When you\u2019re in the paddock area talking to other people, some people like his tracks and some people don\u2019t.\u00a0 There\u2019s really no in between.\u00a0 For myself, I can take the fifth on that because I\u2019m not a driver!\u201d\u00a0 (Our April article on Alan Wilson goes into more depth on the controversy around designing a track with safety in mind.\u00a0 Read what Wilson himself has to say about the highly controversial designs of Herman Tilke.)<\/p>\n
We took the opportunity to talk to Frost about the perceived expansion of the track day world.\u00a0 In Frost\u2019s expert opinion, he sees a demand for![\"frost3\"](\"http:\/\/www.autotrackdaymonthly.com\/images\/frost3.PNG\")
\u00a0track days and club use to be fairly strong.\u00a0 Again, always thinking in numbers, Frost arrives at this conclusion from a number of different ways.\u00a0 \u201cOne, you can actually see that there has been a growth in facilities from road courses over the last 10 years. \u00a0There have probably been about 15 new tracks that have been built and\/or reconfigured from a road course perspective.\u00a0 And then when you actually look at the number of track days that are out there, I think you\u2019re seeing more companies and more people that are establishing businesses as track day schools.\u201d One example of this expansion is the recent news that Chevrolet is coming out with a track dedicated version of the Camaro reviving the Z\/28 name (see our March issue article on the Z\/28). \u00a0And we asked Frost about this development. \u00a0\u201cI think from a Chevrolet standpoint, they decided that it\u2019s part of their realignment of their performance division that they are backing certain series that are out there as far as the Corvette and other things. So I think the manufacturer support is strong, but again that comes down to a kind of budgetary decision over the health of the car company and what programs that they are going to support on an annual basis.\u201d\u00a0 Frost helps us to realize that Chevy is marketing itself as a performance division and is using motorsports to drive that image.\u00a0 It seems that the win on Sunday, sell cars on Monday adage is thankfully at work in driving revenue towards our activity.<\/p>\n
Frost is involved in several other motorsports related businesses in addition to his financial consulting company.\u00a0 \u201cWell like anything that you do when you\u2019re looking for ways to learn and ways to obtain information, I came across a publication called National Speedway Directory, which had been in existence for about 30 years\u201d say Frost.\u00a0 This massive Directory contains every track in North America, the entire professional race series\u2019 schedules, every sanctioning body, museums, and lists of every motorsports publication.\u00a0 \u201cSo I got to know the owner of this publication, a gentleman by the name of Alan Brown.\u00a0 He\u2019s probably one of the most knowledgeable men about racetracks in this entire country. \u00a0And I say, \u2018hey Alan, if you ever want to do anything with it, let me know.\u00a0 I\u2019d love to see about buying or doing something.\u2019\u00a0 So we acquired the publication five years ago in 2009 and we\u2019ve been doing it for the past five years.\u201d\u00a0 This year, the publication celebrated its 35th\u00a0anniversary!\u00a0 Frost says that, \u201cit\u2019s pretty much considered as the bible of motorsports.\u00a0 It\u2019s considered a pocket handy guide and it\u2019s something that you keep on your desk or in the race shop or you keep it in your briefcase.\u201d\u00a0 In 2010, Frost and his associates released a companion telephone application called Track Guide, which is available for both Android and iOS cell phones.<\/p>\n
We may only think about road courses, but did you realize just how many tracks there are?\u00a0 Frost indicates that \u201cWe have oval tracks, we have drag strips and we have road courses.\u00a0 There are approximately 1,300 tracks in the United States and Canada.\u00a0 Of those tracks, 75% are oval tracks, 20% are drag strips and 5% are road courses.\u00a0 Of oval tracks, we have two types.\u00a0 We\u2019ve got two surfaces.\u00a0 We\u2019ve got dirt and we have paved.\u00a0 Of those, 75% of oval tracks are dirt and 25% are paved.\u00a0 So if we work this out, there are approximately 1,000 oval tracks, 200 drag strips and about 100 road courses.\u00a0 And if you divvy that out, there\u2019d be 750 dirt tracks, 250 paved tracks and about 200 to 250 drag strips and about 100 road courses. \u00a0The National Speedway Directory lists information about all these tracks in one handy guidebook that can fit in your pocket.\u201d<\/p>\n
In addition, Frost was approached by the organizers of the Performance Racing Industry (PRI) trade show about establishing a business conference associated with the annual event.\u00a0 \u201cIn 2012 we established the Race Track Business Conference. \u00a0The idea of this conference is to gather industry professionals in an education and networking environment.\u00a0 We initially did it in Orlando and then we were in Indianapolis this year.\u00a0 In our initial year we had Humpy Wheeler come and speak as our keynote and this year we have Mark Miles who is the CEO of Hulman and Company and associated with Indy Car and Indianapolis Motor Speedway.\u201d<\/p>\n
Most telling is what Frost had to say about the people involved in motorsports.\u00a0 \u201cThe beauty about our industry is people are very friendly.\u00a0 The majority of people are pretty accessible and the willingness to share information is unlike most other forms of activity.\u00a0 I think the interesting part is when you\u2019re dealing with people\u2019s passion, people\u2019s desires, their dreams; this industry is a lot more focused and a lot more accessible. \u00a0The barriers to entry inside this industry are lower than others.\u00a0 If you\u2019re dealing with proprietary technology with software or manufacturing, it\u2019s much harder to get that type of information or people aren\u2019t going to share that with you.\u00a0 If you\u2019re dealing with a commercial race series and you\u2019re talking about your setups and all the other things, of course no one\u2019s going to give you that.\u00a0 It\u2019s much more competitive.\u00a0 But I think you see a much more collaborative effort on many fronts within this industry.\u00a0 It is much more open.\u00a0 People are much more willing to share.\u201d<\/p>\n And ain\u2019t that the truth!<\/p>\n","protected":false},"excerpt":{"rendered":" \u201cPeople would call NASCAR on the Monday after the Daytona 500 and say, \u2018I want to build a racetrack in my area.\u2019 NASCAR\u2019s response is ‘well we\u2019re not in the racetrack business. We\u2019re in the sanctioning body business.”<\/p>\n","protected":false},"author":3,"featured_media":307,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"_links":{"self":[{"href":"http:\/\/businessofspeed.speedwaysonline.com\/index.php?rest_route=\/wp\/v2\/posts\/305"}],"collection":[{"href":"http:\/\/businessofspeed.speedwaysonline.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/businessofspeed.speedwaysonline.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/businessofspeed.speedwaysonline.com\/index.php?rest_route=\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"http:\/\/businessofspeed.speedwaysonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=305"}],"version-history":[{"count":1,"href":"http:\/\/businessofspeed.speedwaysonline.com\/index.php?rest_route=\/wp\/v2\/posts\/305\/revisions"}],"predecessor-version":[{"id":332,"href":"http:\/\/businessofspeed.speedwaysonline.com\/index.php?rest_route=\/wp\/v2\/posts\/305\/revisions\/332"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/businessofspeed.speedwaysonline.com\/index.php?rest_route=\/wp\/v2\/media\/307"}],"wp:attachment":[{"href":"http:\/\/businessofspeed.speedwaysonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=305"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/businessofspeed.speedwaysonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=305"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/businessofspeed.speedwaysonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=305"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"frost9440x\"](\"http:\/\/www.autotrackdaymonthly.com\/images\/frost9440x.png\")
If all that is not enough, Frost is also involved in motorsports radio programming.\u00a0 \u201cWe hooked up with Dennis Michelson and his company, Race Talk Radio and what we wanted to do is identify a niche in the business where I thought that there was ability to create a weekly radio show on the business of motorsports and the idea for that was to kind of bring in people in the industry and talk about their business involvement.\u201d\u00a0 The variety of guests on the program has run the gamut.\u00a0 Everyone from track operations to the promotions side to the suppliers to the actual sanctioning bodies have all been interviewed by Micheleson. \u00a0Frost discovered this niche when he recognized through investigation that nobody was focusing on road racing.\u00a0 The radio program covers many different aspects of motorsports.\u00a0 But two years ago, Frost established a show specifically covering road course racing called At The Apex. And this show covers anything from club days, to bikes, to cars and everything in between.\u00a0 Frost says, it \u201cfocuses in on the participants of the sport.\u00a0 Not as much from a business perspective but more from a road course perspective.\u201d\u00a0 At The Apex follows teams and drivers and Frost believes that this particular show has actually been one of their more exciting ones.\u00a0 Through this show, people in the road racing industry are given an avenue through which they can tell their story and get their perspective heard.\u00a0 You can find At The Apex and all of the other on-demand motorsports radio programs at\u00a0www.racetalkradio.com<\/a>.<\/p>\nThe Human Factor<\/h3>\n