Thousands Of Free Tickets Curbed Profits From Miamis Grand Prix Audit Shows
Written by Susan Stabley on January 9, 2003
By Susan Stabley
Raceworks gave away nearly as many tickets as it sold for its October auto race in downtown Miami, according to a city audit.
A memo from Victor Igwe, director of the Office of Internal Audits, reports that 14,526 tickets were sold for the Grand Prix Americas and 12,174 were given out for free.
The numbers don’t include tickets given away for hospitality, said Grand Prix Americas President Chuck Martinez. He estimated the race drew 85,000 over three days, counting a person for each race attended.
Raceworks partner and Miami developer Willy Bermello in July had predicted 12,000 out-of-town fans. He owns 33.33% of Raceworks, attorney Peter Yanowitch 63.67% and racing legend Emerson Fitipaldi 3%.
In the end, 25% to 28% of tickets sold were from Broward County, Mr. Martinez said. The rest, he said, came from "all over." In addition to tickets sales, about 40 people from each of the 77 racing teams came to Miami, he said, plus sponsors and media.
The city got free tickets and about 1,500 went to the Miami Sports & Exhibition Authority, Mr. Martinez said. That city agency in July gave Raceworks, which has a 25-year city license for the race, a $2 million loan to build infrastructure.
Championship Auto Racing Teams, or CART, has vowed to buy 60% of Raceworks once the promoter and Miami settle a suit brought by Homestead-Miami Speedway because the race contract lacked competitive bidding. Mr. Martinez said this week a contract with CART should be signed by month’s end.
He attributed lower-than-expected attendance to a lack of marketing and the pending suit.
"There were a lot of problems. The race was on and off because of the suit with Homestead Speedway," said former assistant city manager Frank Rollason, who said he wasn’t surprised by low attendance and justified the free tickets in light of national TV coverage.
"How much is that ad worth? How much better is it to give out tickets than have empty bleachers?" he said.
Bill Anderson, market research director for the Greater Miami Convention & Visitors Bureau, said Tuesday that seven downtown hotels averaged 85% occupancy the first and second days of the race and 90% the third.
"Definitely a few said the impact was directly attributed to the Grand Prix," he said.
The audit comes as Miami reviews the surcharges it’s due from Raceworks, which was to pay the city and Bayfront Park Trust $1 apiece for each ticket sold.
In November, the city got $12,037, according to the memo, but Mr. Igwe’s office documented 28,379 tickets sold or free. The difference – 1,679 – is tickets exchanged for in-kind services.
The audit determined that Raceworks owes the city and the trust $16,205 each.
For now, Mr. Martinez said he’s concentrating on the next race, Sept. 26-28.
"We are moving forward and with every expectation to exceed this event in every area, not just in attendance, but in the quality of the event." he said. "We’re trying to build excitement. With 10 months ahead of us, we already have tickets sold."