The changes to the Indianapolis Motor Speedway's road course to accommodate motorcycle racing means the track's operators will forfeit around $500,000 annually in ticket revenue for the Indianapolis 500 and Brickyard 400.
Due to modifications just south of pit road and directly north of the oval's first turn, several thousand seats on the inside of the first turn will be removed after this year's Brickyard 400.
Work to prepare the track for next year's MotoGP motorcycle race-which includes laying 13,300 tons of new asphalt-is set to begin in earnest July 30 and conclude before next May's Indianapolis 500. The inaugural MotoGP race at the Speedway will be Sept. 14, 2008.
IMS President Joie Chitwood said while the project is considered a "major initiative and a massive undertaking," facility officials are not overly concerned about the lost seating and resulting revenue loss.
"These are entry-level tickets, and we are working to find new seats for all these displaced ticket holders," Chitwood said. "While displacing fans is something you never want to do, we think this will have minimal impact."
Also lost in the inside of the oval's first turn will be parking for the Gasoline Alley suites. The IMS, Chitwood said, will work to find new parking areas for those patrons, many of whom are corporate executives.
IMS officials do not divulge attendance to their events, and would not say how much capacity would be lost with the removal of the inside first-turn seats. Those familiar with the facility said several thousand seats will go, and with ticket prices in the area starting at $40, the resulting loss will be registered in the millions within a few years.
Industry observers said lost revenue for each race could easily reach $250,000 annually.
"This might be a big hit for some facilities, but with the size of the Indianapolis Motor Speedway and the events they hold, the impact won't be felt immediately," said Tim Frost, president of Chicagobased Frost Motorsports, a consulting firm specializing in motorsports business.
The IMS has an estimated 300,000-plus capacity and its two biggest events-the Indianapolis 500 and Brickyard 400-bring in tens of millions of dollars in ticket revenue each year, industry experts said.
Still, the cumulative impact of the lost seats over a number of years can't be ignored, said Dennis McAlpine, a New York-based analyst covering the entertainment and motorsports industries.
"Pretty soon, this becomes real money," McAlpine said. "Pretty quickly, it becomes millions of dollars lost."
Chitwood declined to say how much the modifications would cost, calling the change a multimillion-dollar project. Industry experts estimated the IMS spent $75 million on the original 2.6-mile road course and predicted the modifications would cost $8 million to $10 million.
"This project involves a lot more than simply laying down asphalt," Chitwood said. "There's a lot more to it than that and it has taken some careful planning."
The changes were mandated so the high-speed motorcycles, which reach speeds greater than 200 miles an hour, can navigate the serpentine course without the risk of slamming into a wall.
"If a motorcycle crashes, the driver has to have room to slide," said Don Becklin, president of Motorcycle USA, a California-based magazine focusing on street machine testing and the motorcycle racing industry. "An outside wall can be catastrophic."
The changes also involve smoothing out the S-turns on the northeast corner of the road course to allow the motorcycles to take them faster and more safely. The race will travel counterclockwise around the road course, the same direction the Indianapolis 500 and Brickyard 400 race around the oval.
The course changes will also accommodate Formula One and other auto races should those be scheduled at a later date. The Speedway's road course is now one of the few in the world to have approval of the major automobile and motorcycle sanctioning bodies.
Speedway officials are betting they will be able to make up any money lost from the Indianapolis 500 and Brickyard 400 with the MotoGP race.
"With a sanctioning fee between $1 million and $2 million, and with attendance projected around 100,000, they should be in the black in short order," Frost said.
Already, Speedway and MotoGP officials have landed an active title sponsor-energy drink maker Red Bull-which Frost said should add to the event's profitability.
The F1 race at the Speedway was without a title sponsor in five of its eight years, and the event never garnered a truly active title sponsor.
"We think Red Bull is going to be a really active sponsor involved in marketing, promotion and other fan activities at a number of levels," Chitwood said. "We have a deal in place that will be beneficial to the Speedway and MotoGP."