Rally Norway threatened by bankruptcy?

[Viktory]

Just read in the local newspaper, NWT, that Rally Norway is in danger of bankruptcy after their first WRC round. It also stated that the Swedish rally made a loss. However they only made a loss of 800 000 kronor (roughly €80 000 ) compared to 14.5 million kronor (roughly €1.45 million) that the Norwegian round lost.
The main reason for this is that they failed to charge all the spectators entry to the stages. They had anticipated a loss of 3 million kronor. They have until June or July (can't remember) to sort it out, with sponsors that they owe this money to, otherwise bankruptcy is the only option.

[JAM]

Just read in the local newspaper, NWT, that Rally Norway is in danger of bankruptcy after their first WRC round. It also stated that the Swedish rally made a loss. However they only made a loss of 800 000 kronor (roughly €80 000 ) compared to 14.5 million kronor (roughly €1.45 million) that the Norwegian round lost.
The main reason for this is that they failed to charge all the spectators entry to the stages. They had anticipated a loss of 3 million kronor. They have until June or July (can't remember) to sort it out, with sponsors that they owe this money to, otherwise bankruptcy is the only option.

If true, it's a pitty because Rally Norway was a succes to WRC. But this situation leave us to the importante question of thinking about the costs.

FIA charges organizers to include them on the WRC callendar. They pay big entering fees, FIA made big demands on them that cost a lot of money. All of this are costs that must be covered by the return of the event.

But the main question is: Is FIA making the right promotional steps to elevate the WRC to a level that gave a fair ROI to the organizers? The answer IMO is NO it isn't.

In conclusion we have a championship that demand big fees and big investments, but this championship is not able to generate the return to cover these investments. You have always a good way to cover the financial holes with some help gave by governments in the name of a suposly national interest.

[DonJippo]

If true, it's a pitty because Rally Norway was a succes to WRC. But this situation leave us to the importante question of thinking about the costs.

FIA charges organizers to include them on the WRC callendar. They pay big entering fees, FIA made big demands on them that cost a lot of money. All of this are costs that must be covered by the return of the event.

But the main question is: Is FIA making the right promotional steps to elevate the WRC to a level that gave a fair ROI to the organizers? The answer IMO is NO it isn't.

In conclusion we have a championship that demand big fees and big investments, but this championship is not able to generate the return to cover these investments. You have always a good way to cover the financial holes with some help gave by governments in the name of a suposly national interest.

The main reason why Rally Norway is threatened by bankrupcy is said to be the fact that they failed to charge all the spectators entering the stages. Now can you tell me what the hell FIA has to do with that? It is true FIA has done lot of mistakes and sadly will do that also in the future but to blame FIA about everything that happens around WRC is just plain stupid IMHO.

[swordsman]

Talking about this you also must remember that one part of Rally Norway being so good is that they took big economical risks. If they arranged the rally with 15M crowns less (which is said to be what's missing) in their budget we would have seen a rally not as good as it was now!

[Brother John]

I.M.O. the date in the calendar is also not good for the two organisations!
Now they lose both money, all fans cannot permit themselves financially 2 weeks holiday and make a choice in there own country, more problems if you have 2 neighbouring countries with a WRC rally! Same problem with all the coupled rallies such as Spanje-Frankrijk, Duitsland-Finland! It is costs saving for the teams but certainly not for the organisations!

Off topic!
As the only festival organizer in Europe, I went down with the entrance price instead of higher prices and i can tell you it was financially a terrible good decision!

[AndyRAC]

The main reason why Rally Norway is threatened by bankrupcy is said to be the fact that they failed to charge all the spectators entering the stages. Now can you tell me what the hell FIA has to do with that? It is true FIA has done lot of mistakes and sadly will do that also in the future but to blame FIA about everything that happens around WRC is just plain stupid IMHO.

Rally Ireland aren't charging spectators entry fees either, are they? I wonder if they will lose money as well. The problem is the F1A think the WRC can be like F1, and charge silly money to hold events, this has got to be re-thought. You shouldn't have to pay to be a round of the WRC, crazy. F1 can get away with it as it's swimming with money, WRC is tiny by comparison, when will these people wake up and realise this.

[Iskald]

FIA is not the cause of Rally Norways economical troubles. Neither is selling to few tickets to spectators. In total Rally Norway sold tickets to 49 000 spectators, split into three-day rally passes, one-day passes and one-stage entry. They could have sold even more with a better ticketing service, that is true, but not near enough to cover the 1,6 mill. Euro loss they have accumulated. To achieve that they would have had to sell 70 000 more tickets or so, and that is simply utopia...If they really have budgeted with this kind of income from ticket sales, the responsible persons must be called irresponsible.

Actually Rally Norway have had no control on the budget and overall costs. This is the reason for their troubles.

When that is said, I don`t believe one second that this will jeopardize the rally`s chance of running a WRC-event in 2009. The money will be found to cover the loss and the company running the event will continue to work towards 2009.

[BDunnell]

FIA is not the cause of Rally Norways economical troubles. Neither is selling to few tickets to spectators. In total Rally Norway sold tickets to 49 000 spectators, split into three-day rally passes, one-day passes and one-stage entry. They could have sold even more with a better ticketing service, that is true, but not near enough to cover the 1,6 mill. Euro loss they have accumulated. To achieve that they would have had to sell 70 000 more tickets or so, and that is simply utopia...If they really have budgeted with this kind of income from ticket sales, the responsible persons must be called irresponsible.

I'm not one of the 'blame the FIA for everything' brigade, but even so, I can't help but feel that its delusion as to the global status of the sport could be held partly responsible for these losses. In reality, we all know that no rally could ever hope to sell 120,000 tickets, but equally we all know that event organisers of all kinds exaggerate their audience figures and put the best spin possible on their events' significance in order to try and attract sponsors. Sometimes, this ends up with them writing cheques they can't (lterally and figuratively) cash.

I'm no economist or marketeer, but when something like the WRC starts being marketed as more of a global brand than it really is, it seems to me that the potential for such things happening is multiplied.

[AndyRAC]

I'm not one of the 'blame the FIA for everything' brigade, but even so, I can't help but feel that its delusion as to the global status of the sport could be held partly responsible for these losses. In reality, we all know that no rally could ever hope to sell 120,000 tickets, but equally we all know that event organisers of all kinds exaggerate their audience figures and put the best spin possible on their events' significance in order to try and attract sponsors. Sometimes, this ends up with them writing cheques they can't (lterally and figuratively) cash.

I'm no economist or marketeer, but when something like the WRC starts being marketed as more of a global brand than it really is, it seems to me that the potential for such things happening is multiplied.

That is indeed the problem. The WRC is not a global brand, no matter what people might think,FACT,it's not. It might have been a few years ago, but it has disappeared off the radar completely. So organisers should cut their cloth accordingly.

[JAM]

The main reason why Rally Norway is threatened by bankrupcy is said to be the fact that they failed to charge all the spectators entering the stages. Now can you tell me what the hell FIA has to do with that? It is true FIA has done lot of mistakes and sadly will do that also in the future but to blame FIA about everything that happens around WRC is just plain stupid IMHO.

First mistake: To charge spectators to see a event that is held on public roads. In a circuit you have a place built to that, and that has costs and spectators must pay to enter, but a stage rally?

The teams pay to get in and pay material to race, the organizers pay fees and have to pay the costs of running the structure of a rally, the spectators have to pay to stay on public places... Everybody has to pay, pay, pay, pay... there's not enough money to all of this and not many people ta accept pay to see a rally.

And in Norway seems don't even have money to pay the rally organizarion. Maybe the problem is on the costs and not on the profits.