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SBJ/20110103/This Week's Issue
Panel recommends one-third cut in NASCAR hall's operating budget
Published January 3, 2011
The NASCAR Hall of Fame took a big step last month toward cutting nearly one-third of its operating budget.
That move follows earlier discussions of a reduction in the 20 percent range to help cope with rising deficits and slow ticket sales. Instead, the Charlotte Regional Visitors Authority, the operator of the hall of fame, is opting for what it bills as a worst-case scenario. The visitors authority budget committee recommended a $4.8 million cut to the $15.3 million operating budget, a reduction of 31 percent.
This month, the full visitors authority board will vote on the budget changes, which would take place immediately. The hall of fame operates on a fiscal calendar that ends June 30.
Last month, the visitors authority submitted a financial analysis to the Charlotte City Council outlining projections for the rest of the fiscal year. Based on expected attendance of 250,000 people — down from a projected 575,000 in the original budget — the visitors authority expects the hall of fame to lose $1.3 million during the current fiscal year. That figure represents a $2 million difference from the projected profit of $793,000 in the initial budget.
Along with revised spending, the committee recommended adjusting the anticipated revenue from ticket sales and other income sources by $6.9 million, to $9.2 million, from $16.1 million.
Cuts included lower royalty payments because of lagging attendance, reduced marketing and promotions and much lower spending on a range of contract services. The marketing budget loses one-third of its funding, dropping to $1.6 million from $2.4 million. Even the signature induction ceremony for the second hall of fame class in May will be a discounted version, with $225,000 pared from the $725,000 budget.
No jobs will be cut as part of the reduced budget. Winston Kelley, executive director at the hall of fame, said some savings have already been realized by adjusting the schedules of part-time workers as the traffic patterns of busier and slower times have become apparent. The hall of fame employs 27 people full time and has 100 part-time workers.
Hotel taxes are the main funding source for the $200 million, publicly owned hall of fame. It opened in May and has endured a string of disappointments since then, starting with sluggish ticket and corporate-sponsor sales.
A visitors authority reserve fund will repay the anticipated operating deficit. If the hall of fame loses $1.3 million, as expected, the reserve fund would be left with $3.7 million, the visitors authority budget committee reported this week.
Erik Spanberg writes for the Charlotte Business Journal, an affiliated publication.