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Does CCES have a car count problem?


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Just looking at things through this past weekend with the conclusion of Hallett. Seems that maybe the answer is Yes?

 

image.png.6e147ac229f493418a1e3fcc8bfd1b9e.png

 

Thoughts...

  • Assuming a $1600 entry, that is $41,600 in lost revenue
  • 2022 event count is +1 over 2021
  • That additional race adds expense vs 2021 to still achieve less car count
    • Track rental
    • Staff travel (airfare, gas, rental cars)
    • Staff meals, hotels, etc.
  • Remove Charlotte, PBIR, Ozarks and only compare repeat events and the change is -22%

 

 

Here is another series, they're slightly up based on a large increase in their season opening race

 

image.png.028dc9251ee1fe9bb44ee17095e229be.png

 

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  • Technical Advisory Committee

I keep seeing this come up and I am wondering what the overall purpose or thought behind it is?

 

 

Champcar and "another series" with different attendance numbers are different products targeted at different markets.

 

Champcar is a "Nonprofit Mutual Benefit Corporation"  - IE our purpose is to serve our members.  We are not trying to make maximum profits, increase share prices, etc.  We are trying to make enough money to host races for our members,  maintain a suitable emergency fund to survive market fluctuations, and have enough capital to maintain our assets, employees, and contracts.   Anything beyond that means we should lower our prices....

 

We could make more profit by hosting less races - that means less overhead for employees (less employees and less travel costs), less track rental fees, less equipment to maintain, etc...  (say, like "another series"), but then we might not be serving our members as well.

 

 

Champcar is fulfilling its purpose to its members in 2022.  It fulfilled its purpose to its members in 2021 as well.   The annual financial statement is healthy, we have almost paid off the previous owner, we own the necessary equipment to host and score races, and we have a large/diverse membership base.  We have contracts and dates with tracks across the country which we are meeting our obligations to maintain (IE we are keeping our dates).

 

Champcar may intentionally choose to host a race that may not make money (or barely break even) in order to maintain our relationship with a track.  That has intrinsic value that isn't represented on a P&L sheet.

 

 

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4 minutes ago, Chris Huggins said:

I keep seeing this come up and I am wondering what the overall purpose or thought behind it is?

Concern over the health of the series.

 

At what point does the decrease in entries actually cause a problem? What if Road Atlanta 2023 sees another double digit reduction in entries? Of course the race won't go away as you say, but it sure is possible entry fees continue to rise to make up the difference, which could create a ripple effect.

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1 hour ago, Chris Huggins said:

Champcar is a "Nonprofit Mutual Benefit Corporation"  - IE our purpose is to serve our members.  We are not trying to make maximum profits, increase share prices, etc.  We are trying to make enough money to host races for our members,  maintain a suitable emergency fund to survive market fluctuations, and have enough capital to maintain our assets, employees, and contracts.   Anything beyond that means we should lower our prices....

 

We could make more profit by hosting less races - that means less overhead for employees (less employees and less travel costs), less track rental fees, less equipment to maintain, etc...  (say, like "another series"), but then we might not be serving our members as well.

 

 

Champcar is fulfilling its purpose to its members in 2022.  It fulfilled its purpose to its members in 2021 as well.   The annual financial statement is healthy, we have almost paid off the previous owner, we own the necessary equipment to host and score races, and we have a large/diverse membership base.  We have contracts and dates with tracks across the country which we are meeting our obligations to maintain (IE we are keeping our dates).

 

Champcar may intentionally choose to host a race that may not make money (or barely break even) in order to maintain our relationship with a track.  That has intrinsic value that isn't represented on a P&L sheet.

 

 

It's great to hear that the club is financially healthy. 

 

The last published annual report indicated the following:

Cash at the end of 2018: $159,699

Cash at the end 2019: $139,887

Cash at the end 2020: $100,616

 

Hopefully that trend is reversing, but most of the rest of us don't have the information that you do.

As far as those numbers suggest, we could be a year or two away from shutting down. 

 

Why compare entries to other series? To see if there are factors effecting the overall market, i.e. fuel prices, as noted above. 

 

 

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3 hours ago, Chris Huggins said:

I keep seeing this come up and I am wondering what the overall purpose or thought behind it is?

 

 

Champcar and "another series" with different attendance numbers are different products targeted at different markets.

 

Champcar is a "Nonprofit Mutual Benefit Corporation"  - IE our purpose is to serve our members.  We are not trying to make maximum profits, increase share prices, etc.  We are trying to make enough money to host races for our members,  maintain a suitable emergency fund to survive market fluctuations, and have enough capital to maintain our assets, employees, and contracts.   Anything beyond that means we should lower our prices....

 

We could make more profit by hosting less races - that means less overhead for employees (less employees and less travel costs), less track rental fees, less equipment to maintain, etc...  (say, like "another series"), but then we might not be serving our members as well.

 

 

Champcar is fulfilling its purpose to its members in 2022.  It fulfilled its purpose to its members in 2021 as well.   The annual financial statement is healthy, we have almost paid off the previous owner, we own the necessary equipment to host and score races, and we have a large/diverse membership base.  We have contracts and dates with tracks across the country which we are meeting our obligations to maintain (IE we are keeping our dates).

 

Champcar may intentionally choose to host a race that may not make money (or barely break even) in order to maintain our relationship with a track.  That has intrinsic value that isn't represented on a P&L sheet.

 

 

I agree with the philosophy you laid out for the club, have races and have enough money to continue to do that.   You would seem to have no concern about attendance levels.  So I would take that as saying the current levels are good enough to survive.  That may or may not be a good assumption on my part.  I think it keeps coming up because as members we are concerned about the health of our club.   What level of attendance is sustainable, we don’t know and are curious.   What if the ambulance lays an egg on the highway?   

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3 hours ago, Chris Huggins said:

 Anything beyond that means we should lower our prices....

 

 

That right there seems like enough reason to be concerned about entry numbers.  This club is for the  benefit of the members, so let's get our car counts up so we can keep our entries down.

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I dont really have any info you don't, other than maybe the 2021 data (that will be out soon if its not already).
Just looking at the bottom number on the charts does not give you the total picture.  For example, from 2019-2020 the total liabilities decreased by ~34k and the total cash on hand decreased by ~39k as you stated.   

 

 

Please don't put words into my mouth.   Myself and the rest of the BOD are very aware of car counts and are actively tracking it.

 

Is it a "concerning" level - well depends on how you define concern. 

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I must apologize to the club. I planned on going to Hallett and life got in the way. Went last year. I am your 4%er for that race. Champcar is the best for my family and friends. Just a bunch of wannabes living the dream to race on a race track. For a good 20 years went by Hallett and wanted to go there and just check it out. Check it out we did. We raced the crap can car out of it. Don't worry about the car count nothing is forever. Let management worry about that. There jobs depend on it. 

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7 hours ago, ABR-Glen said:

 

Cash at the end of 2018: $159,699

Cash at the end 2019: $139,887

Cash at the end 2020: $100,616

 

 

 

 

 

Cash at the end of 2021: $122,632

I'll have the financials up tomorrow.
 

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Happy to hear financials are turning around. 

 

The car counts are concerning but I don't think there is any reason to panic yet. The last few years have been challenging. ie Covid and Inflation. 

 

I do think the east is saturated with races which is hurting count numbers as well. It makes some sense as that is where most of the active teams are currently located. It is a bit of a self-fulfilling prophecy.  Failure to resolve midwest and westcoast issues will result in an east coast only series. 

 

I'd recommend a few less east coast races so individual car counts go up.  And a few select loss leader races in the midwest and westcoast with race dates choosen that don't conflict with other races.  

 

 

Edited by veris
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First, as Chris mentioned, we do study car counts.  A couple of weeks ago I sent the board similar data to what you listed with a few fancy graphs (what I sent is a 5 year trend for every race we have ran during that time, thanks to Andrew S. for the data).  A longer term look seems more appropriate over just a year following covid, lockdowns, runaway inflation, etc.  Each club I assume would be affected differently by those factors plus a hundred other reasons.  We will discuss this subject a bit more in the board meeting next month. 

 

A different question might be, where are our threats coming from long term and how do we counter them?  We put together a swot analysis with input from some on here to see where we are as a club on things like that.  The board has reviewed that and is something we will also pick back up on next month once we get this annual meeting completed tomorrow night.  We can share whatever data we have here or individually after we get a chance to go through it fully if anyone wants it.

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I will say it again, when speed / cost / rules creep get to the point that "Joe average" (yes, I resemble that remark) doesn't feel he/she has a chance on their best day to get to the podium, they will go elsewhere.  Series after series have died after a few at the top want (as much as possible) open rules to allow them to outspend and out engineer the other few who can afford to do so and the "also rans" decided to let them, and went somewhere else to race.

 

There are a lot of other pressures on racing over the past few years (covid and now fuel - and everything else rising in cost), but I think this has been coming to a head for a while.  The realization of the BOD to consider reining in tires is a good start, but I still think more pull back will be needed.

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I've done a bit of research on ChampCar at Nelson Ledges - where I have raced the most:  Looking at the top 10 finishers, and averaging their fastest lap times, the average time from 2011 to 2018 improved by 2.9 seconds - included in that improvement was a repave with curbs which should make the cars faster.  From 2018 to 2021 the average lap time improved by 4.3 seconds.

 

The TCV of my car peaked in 2013 at 474.  Since then we added a rear wing, non-OE hubs on all four corners along with other endurance oriented suspension parts, an aftermarket ECU.  Value for most recent race in 2021 was 388.  

 

I agree it is difficult to read from one year to the next as there are countless reasons why attendance is down.  With that said my car was on the podium at Nelsons in 2018, P5 in 2019 and third slowest in 2021.  I can see the speed and money coming in and I am not excited at the reality of having to make my car that much faster each year or I end up as a rolling chicane.   On the other side of the coin, what is the total addressable market?  Is it shrinking?  I got into this budget endurance road racing to see if we could run a car for 24 hrs.  Well I did that.  So how many people have done it and don't want to put in the work or the $ to keep doing it?  If you are referring to the WRL or AER as the other league - no way I'm racing over there that's even more $.  LeMons - not a product I am interested in.  I never got into road racing earlier because the SCCA has too many rules and barrier to entry is higher. 

 

I have really appreciated so many things I got to do with a race car due to this series, but as a small time operator I'm at a crossroads and it's getting to the point where I might have to find something else to do. 

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