USA Pro Challenge On Five-Year Path To Profitability, But Losing $2-3M Per Year Now
The USA Pro Challenge "is losing" $2M-3M per year, but is "still on track for a five-year plan to profitability," according to Jason Blevins of the DENVER POST. Event CEO & co-Chair Shawn Hunter said that the three-year-old race, which concludes Sunday, "would be profitable two years earlier than planned" if "struggling Boise wind energy company Exergy Development Group had not failed to make $2.5 million in contractual sponsorship payments" to the event last fall. He added that USA Pro Challenge Founder & Owner Rick Schaden "is happy" with the event, and the race's profitability "could arrive sooner if he is able to secure a title sponsor 'that fits with Colorado and fits with the sport.'" Hunter: "If this race were funded by the public we would not be sitting here today" (DENVERPOST.com, 8/21). Hunter yesterday said that the Colorado event "was guaranteed" through '15. VELO NEWS' Neal Rogers noted the seven-stage race is "believed to cost" approximately $10M per year to run. Hunter: "As I’ve said before, we are a not-for-profit for our first five years. Selling sponsorship and international TV rights are our biggest revenue streams, and these take time. Something like this takes patience and a unique financial commitment, and fortunately we have that from the Schaden family." He added of the path to profitability, "This is similar to what we did with the Tour of California, which is now in its eighth year." One thing that "sets the USA Pro Challenge apart from other events is that it owns its own framework -- the start- and finish-line gantries, announcing stages, signage, and festival infrastructure." That "meant a significant initial investment in capital expenditures." But Hunter said that he has "been able to amortize that expense over many years." Hunter: "We continue to grow the top line, we’ve stabilized expenses, and we continue to add sponsors -- we added $1.4 million in new sponsorship year over year from 2012 to 2013." He said that the format of using host cities as both finishes and starts the following day "seems to be popular with riders, fans, and the host cities themselves" (VELONEWS.com, 8/21).
IS RACE BENEFICIAL FOR ASPEN? Aspen Mayor Steve Skadron said that to "understand the benefit of the race, one has to take the long view." He added that economic benefits "may not be felt on race day." The "payback comes years down the road." Skadron: "The idea behind the race wasn’t necessarily searching for a one day bump in sales. It’s really about the long term impact that an international marketing event like this one, can have on our town" (ASPENPUBLICRADIO.org, 8/20).