{"id":420,"date":"2017-08-07T00:16:51","date_gmt":"2017-08-07T00:16:51","guid":{"rendered":"http:\/\/businessofspeed.com\/?p=420"},"modified":"2017-09-07T00:21:43","modified_gmt":"2017-09-07T00:21:43","slug":"ss-bos-column-august-2017","status":"publish","type":"post","link":"http:\/\/businessofspeed.speedwaysonline.com\/?p=420","title":{"rendered":"SS – BOS – Column – August 2017"},"content":{"rendered":"

Business of Speed<\/strong>
\nThe Money Behind the Motorsports Industry<\/em>
\nBy: Tim Frost
\nDate: August 2017<\/p>\n

This month we will look at the motorsports from track investment in infrastructure and tax perspective on owning a race team.<\/p>\n

The racing season is in top gear, with all the series competing coast to coast from the local short tracks to straight line drag strips to twisting road courses.\u00a0 Economic challenges continue for track operators, sanctions, teams and drivers on the spectator and sponsorship front.<\/p>\n

Successful businesses continue to invest in their products and motorsports is no exception.\u00a0 Race tracks spend for three primary reasons: safety, repairs and maintenance, and spectators.\u00a0 Providing a safe environment for the drivers and fans is mandatory. \u00a0This may include safer barrier installation, stronger fencing and enhanced tire barriers and runoff areas.\u00a0 Outside sporting venues are subject to extreme conditions from weather and race cars.\u00a0 There is ongoing maintenance for track paving and seepage.\u00a0 Track crews must prepare for emergency patching repairs during a race.\u00a0 Fan amenities have evolved over the years.\u00a0 Fifteen years ago, larger tracks expanded seating capacity rapidly.\u00a0 As attendance has declined, grandstands have been removed.\u00a0 These areas are being repurposed into hospitality areas and RV camping spaces.<\/p>\n

Tracks have been seeking clarification on the depreciation classification of selected assets at race tracks.\u00a0 Known as the Motorsports Fairness and Permanency Act, the bill has been temporary.\u00a0 The National Motorsports Coalition which is comprised of affiliated groups of race tracks, motorsports associations and sanction bodies are working on making this legislation permanent.<\/p>\n

The larger track operators continue to make significant investments in their facility.\u00a0 They include Daytona Rising\u2019s $400.0 million redevelopment, Phoenix International Raceway $178.0 million reconfiguration, Indianapolis Motor Speedway\u2019s Project 100 for $100.0 million, and Richmond Raceway\u2019s $30.0 million infield redesign.\u00a0 \u00a0Over the last five years, the three publically traded companies have invested over $750.0 million.<\/p>\n

Racing is an expensive sport.\u00a0 It takes money to go fast \u2013 many drivers spend every dollar they have.\u00a0 A common question \u2013 is it hobby or business.\u00a0 Perfect scenario would be to win races and deduct the expenses incurred to compete.\u00a0 Typical expenses for race team may include: chassis, engines, tires, parts, fuel, travel, insurance, and crash rebuilds.<\/p>\n

The Internal Revenue Service monitors those who claim losses racing.\u00a0 For racing to qualify as a business, it must operate with a profit-making purpose continuously.\u00a0 Detailed records are a must.\u00a0 Documentation such as a business plan, sponsorship proposals, financial statements, car expenditures, travel plans, race schedules, and on-track performance.<\/p>\n

The IRS considers factors of a driver or race team such as: manner of activity (professional or amateur), expertise of advisors, time and effort expended, expectation assets would appreciate, success in participating, history of profit or loss, financial status, and element personal pleasure or recreation were involved.<\/p>\n

The key to taking the checkered flag successfully as a racing business is to operate professional and competent financial advisors.<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Business of Speed The Money Behind the Motorsports Industry By: Tim Frost Date: August 2017 This month we will look at the motorsports from track investment in infrastructure and tax perspective on owning a race team. The racing season is in top gear, with all the series competing coast to coast from the local short […]<\/p>\n","protected":false},"author":5,"featured_media":431,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"_links":{"self":[{"href":"http:\/\/businessofspeed.speedwaysonline.com\/index.php?rest_route=\/wp\/v2\/posts\/420"}],"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\/5"}],"replies":[{"embeddable":true,"href":"http:\/\/businessofspeed.speedwaysonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=420"}],"version-history":[{"count":4,"href":"http:\/\/businessofspeed.speedwaysonline.com\/index.php?rest_route=\/wp\/v2\/posts\/420\/revisions"}],"predecessor-version":[{"id":429,"href":"http:\/\/businessofspeed.speedwaysonline.com\/index.php?rest_route=\/wp\/v2\/posts\/420\/revisions\/429"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/businessofspeed.speedwaysonline.com\/index.php?rest_route=\/wp\/v2\/media\/431"}],"wp:attachment":[{"href":"http:\/\/businessofspeed.speedwaysonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=420"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/businessofspeed.speedwaysonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=420"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/businessofspeed.speedwaysonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=420"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}