The Cheap Seats Don't Keep the Lights On

A single race hosting fee can hit $70 MILLION—and that's before they even sell a single ticket. The real challenge for any track promoter? It’s absorbing the massive fixed liability and turning a one-time race into a year-round, profitable business.

The truth is, the profit isn't in the Grandstands, it's with the executives in the Suites. Premium hospitality is the only sustainable margin driver.

We're putting the circuit business on the lift and exposing the financial engine behind every major racing series, from F1 to IndyCar, using leverage, real estate, and B2B cash flow to survive.

🏁 On This Episode of Business of Speed:

00:00 The $70M Fixed Cost: Your Entry Ticket to Global Racing
04:44 The Ultimate Leverage: Why a Racetrack is an Infrastructure Asset
10:40 The Profit Driver: Why Luxury Suites Fund Your Favorite Race
18:13 Ghost Tracks of Europe: The Need for Year-Round B2B Income
21:30 The Subsidy Factor: How Cities Use Tax Dollars for PR (Vegas vs. Monaco)
27:39 The 3 Non-Negotiables for Track Sustainability Checklist
29:00 Real Estate Leverage: Inside the T11 "Car Condos" at COTA

Creators and Guests

Host

Lali Michelsen

Chief Creative Officer, Business of Speed

Host

Vincenzo Landino

Founder + Managing Director, Business of Speed

What is Business of Speed Podcast?

Business of Speed is the definitive, deep-dive into the money, power, and technology driving modern racing.

We don't report the race, we pull back the curtain on the strategy behind it. This show treats global racing as the ultimate laboratory for competitive advantage, focusing on the high-level business decisions that shape the sports. We move past passive sponsorships to explore how teams, brands, and executives leverage racing for technology transfer, cultural relevance, and operational impact.

This is where the C-suite goes to learn how to harness velocity into a sustainable business advantage.

Lali (00:01.166)
So before we start our episode, Vincenzo, I have to apologize to you, unfortunately, and to our listeners already. It's only our third episode and I'm already apologizing. Because I listened back to our episode one, so we've had episode zero and then episode one. And in episode one I was listening and it turns out I have a catchphrase. Did you pick up on that?

Vincenzo (00:07.738)
already.

Vincenzo (00:28.12)
I'm Colombian. In Colombia.

Lali (00:29.684)
No, it's way worse. I was about to murder myself, actually. Apparently, I like to say the reality is.

Vincenzo (00:38.37)
the reality is...

Lali (00:40.206)
And I'm listening and I'm getting aggro against myself thinking, Lali, how many realities can there be? The reality is, I don't know whose reality I'm living in, but apparently I live in a lot of realities. so I wanted to apologize to everyone and the reality is, it's very unconscious, but I will make an effort today to not say the reality is because I don't wanna...

Vincenzo (00:48.343)
Well, is it your reality or is it everyone else's reality?

Vincenzo (01:04.407)
It's a Colombian thing. It's a Colombian thing.

Vincenzo (01:21.665)
Well, I I wasn't expecting that so I the reality is it's okay. la la la. Welcome back to the business of speed podcast. I'm Vincenzo Landino and my co-host that you've already listened to talk about her realities multiple realities. Lali Mikkelsen Lali. Let's talk a little bit today. We've been having this discussion.

Lali (01:23.95)
you

Okay, ola Vincenzo!

Vincenzo (01:50.893)
We had a little bit of this discussion in New York, and we talked a little bit about it last time we recorded, tracks or circuits or just the races in general, where the races are held. I think there is.

The challenge with financials behind a race is more than just what many of us see. There's what the promoter has to put on. There's hosting fees. There's a rights holder involved, whether it's Formula One or MotoGP or WEC or NASCAR, IndyCar, whoever the rights holder is. And we were talking about this because we had a conversation with a gentleman about

premium hospitality and revenue diversification and how those seem to be the only paths to profitability. And it got me thinking, well, what are those entry costs and what is the kind of behind the scenes for a promoter when it comes to hosting an event? It's beyond buying some good signage, creating some cool videos.

There's there's a massive entry fee, right? And if we talk about we're gonna talk about Formula One, I think because the numbers are bigger there and they're a little bit more People people can take to those numbers a little bit more You're looking at you know, what 70 million dollars Let's say to just have the privilege of hosting an event That buys you a license to operate your event

Lali (03:17.806)
Yeah.

Lali (03:33.72)
Yes.

Vincenzo (03:39.695)
But the first thing that people ask, and we actually recorded this, we had recorded a clip, one of the social clips that we made was around people not understanding supply and demand and why tickets are no longer 50 euros, 50 pounds, $50 for a weekend anymore and why it doesn't exist. So we talked, we thought this was a good path to go down, understanding and answering that question. So.

How do we close the financial gap? How do you make up the difference? You're in the whole 70 million. If you've built a track from scratch, which doesn't happen often anymore, there's another hundreds of millions, if not more, that you're building.

Lali (04:14.708)
Exactly.

Lali (04:26.124)
Yeah. But we can even start with like a track that's built. You've paid your 70 million, right? But so if you think about it, there's this like new show, John Ham. It's called Your Friends and Neighbors and some of our listeners. Great show. And there's a line in it that I adore and I'm paraphrasing him. And he says that rich people aren't broke, they're leveraged. Right. So a racetrack is the ultimate

Vincenzo (04:40.941)
Great show.

Lali (04:53.504)
leverage. You are leveraged beyond anything you've ever been in your life, right? So the promoter starts out in the hole. It's a massive fixed liability. The whole operation takes not only think about it like concessions, hospitality, you have to make the track look beautiful. What if it rains? People don't show up. It's just this scramble to generate revenue. Only

only in the function of offsetting this massive hosting fee that you just said could be up to 70 million dollars depending on the track. So it's really like a gamble, right? It's this high risk game and it's built on one massive and very fixed and very mandatory expenditure right off the bat, right? So yeah, maybe,

people don't realize the level of gamble that a promoter is in. People are like, my God, it costs so much money. I can't believe I'm paying this and that. They don't realize the risk involved for these promoters.

Vincenzo (05:56.452)
Sure. Yeah, and it's not, it's risk, it's real dollar. I these are massive dollars you're dealing with. They're real businesses, right? These are businesses. We, I say we, fans tend to look at these things. We go to a football match or a basketball game or whatever it might be, and you just, you kind of come to expect certain level of.

amenities, right? You expect something when you go there, you're paying a ticket to get a seat, really. But the modern game is a lot different. You have two separate businesses, especially in motorsports, right? Well, I say it's but it's most sports are like this. You have

Lali (06:45.836)
But in motorsports it's a clear model, yes. There's two separate businesses.

Vincenzo (06:48.405)
Absolutely. Absolutely. Yes.

Yeah, that's actually great because oftentimes the promoter may not necessarily own the circuit where they race at either. Right. They're there could they are just paying to race at a circuit. Oftentimes. It's not every day. Las Vegas is very different, but that's also a city circuit. Miami is different. They own. They own that. Not everything is like that. Not every situation is exactly like those. But you have.

Lali (06:59.52)
Austin.

Vincenzo (07:21.411)
two real different businesses going on and they are competing with one another. You've got your rights holder, like we said, Formula One, IndyCar, NASCAR, whoever the racing body is. They're controlling things like the media, the broadcast, major sponsorships, right? Which that also gets tricky. Like in Monaco, where Monaco was sponsored by Tag Heuer. Meanwhile, Formula One had Rolex as the sponsor at the time.

Lali (07:50.158)
Yeah, that was a bit of a walk.

Vincenzo (07:52.012)
Now it's all one, but things like that are a real situation.

Lali (07:56.611)
There are competing interests. Yeah, competing interests, competing stakeholders for sure.

Vincenzo (08:03.085)
How do you take, where do they take profit? What inventory does the promoter get to keep? What inventory can they, what do they have control over?

Lali (08:13.25)
I love this because I feel that this episode, Vincenzo, is going to help really clear up the business model for so many people. And that's why we were both so excited about doing it, right? So you spoke to the rights holders. So think of a racetrack as having two silos. The rights holders that Vincenzo just talked about, that's one segment of the business. And then the other segment is the aforementioned highly leveraged promoter. So they get sort of, think of it like the local cash business.

things like ticket sales, concessions, all the trackside hoarding, and something that is sort of the marquee of a racetrack, the premium hospitality. We're gonna talk about that a lot because there's so much money there. So the right holders get the global value, but the promoter has to really like hustle to extract the maximum.

Vincenzo (08:54.167)
Yeah, we should definitely touch on that a lot. Premium hospitality. Yeah, yeah.

Lali (09:09.224)
local sort of tangible assets. And unfortunately for the promoter, that's where operational risk lives. The rights holder is getting their money no matter what. The promoter, right up front, the promoter, they operate in risk. They may or may not get their money. It's a gamble.

Vincenzo (09:20.191)
Yeah, yep, they get their check right up front.

Vincenzo (09:31.182)
Now it is in the rights holders best interest for an event to be successful, for a promoter to be successful. While the rights holders, you know, they get their money and that could be it. For an event to be successful means you're going to continue collecting that there's recurring revenue coming in. Depending on the type of event, there's other ways for them to make money. Again, sponsorship, an attractive location can attract new sponsorship.

Lali (09:36.984)
certain.

Vincenzo (10:01.141)
Again, we see that with Las Vegas. And Las Vegas is top of mind because it's coming up and we'll be there. there's so many sponsorships that came in to Formula One rights holder because of Las Vegas, which I know that's confusing because Las Vegas actually happens to be the right holder and the promoter all in one. First time ever that that's happened.

Lali (10:23.438)
It's a case study. Yes, it's a unique case study. So we won't focus on it too much because we want this episode to be more broad appeal about, you know, more international racetracks and the business of international racetracks. Las Vegas is a unique case study. In Spanish we say the exception makes the rule. In this case, it's sort of a very confusing rule.

Vincenzo (10:32.375)
Yeah.

Vincenzo (10:43.671)
Yeah. So we were as we were going, we mentioned premium hospitality. We mentioned how the promoter needs to find ways to make margin, make their margin somewhere. General admission doesn't cut it. And that's where the comment we made, I think it was episode zero, about people not understanding supply and demand. That's truly where this conversation comes into play.

Lali (10:51.746)
Yes, I'm excited to.

Vincenzo (11:12.779)
It is not enough to sell, you know, general admission tickets because that makes the fans happy. Yes, as a fan, this is where the conversation gets tough. But as a fan, I would love for everybody to get access. Of course, right? But for the...

Lali (11:30.574)
Of course, of course. And also you never want to see empty grandsons. I unfortunately see it often at IndyCar. And that's not because of pricing, that's because of lack of promotion of the series. That's a whole other episode we can do. But seeing empty grandsons is depressing. Nobody wants empty grandsons, of course.

Vincenzo (11:34.774)
No, of course not.

Vincenzo (11:42.049)
Mm-hmm. Mm-hmm.

Vincenzo (11:48.836)
So paddock club, VIP suites, experiences, know, the stuff that everybody wants to go to and wants to get tickets to or get access to, which is also the same thing that there's a whole subset of people complain about. So that experience, the premium hospitality, there's an entire ecosystem, economy.

Lali (12:05.026)
Yes.

Vincenzo (12:14.679)
behind premium hospitality at these events, especially at events like Monaco, where you have companies, experiential companies that are selling yachts, opportunities to watch the race from a yacht and hobnob with other folks just like you. know, 30, 40, 50, $60,000. I had someone reach out to me. They wanted to go to the Singapore Grand Prix. And they asked me about they wanted premium. They wanted a premium experience. And so I connected them with a contact of ours.

I said, listen, this is your go-to guy. He has all the connections. And they were like, money's no object. We just want that cool experience. When you have someone say those words like, money's no object, we just want to experience this in a way that's either once in a lifetime or maybe people that can afford it more often than once in a lifetime. How can you, as a promoter, say, oh, I want to fill more. I want just more general admission. It doesn't make sense.

Lali (12:47.288)
Yeah.

Lali (13:11.458)
You can't because the reality, it doesn't make sense because the reality of a racetrack is that hospitality is the significant margin driver. So maybe some people listening are familiar with how airlines make money and if they are and if you're not, I'll quickly explain it and I'm sure we'll get messages of people correcting me but airlines make the bulk of their money in their business class section and in the last.

Vincenzo (13:32.995)
you

Vincenzo (13:37.099)
Is this how it works in Colombia or is how it works for the whole world?

Lali (13:39.007)
This is globally, globally darling. So an airline makes the bulk of their money selling business class section and loyalty credit cards. that's think of partnerships like American Express or Visa for instance, where we get miles. That has allowed sort of airlines to act sort of in a way as unregulated banks and it's made very profitable deals for them that can subsidize flying often at a loss perhaps or even breaking even.

Vincenzo (13:41.814)
I'm kidding.

Lali (14:07.968)
So if you think about race tracks, they follow a similar model just in terms of the business class seating, right? So if we think of business class seating as the suites and the corporate packages, they're supremely high priced because they're bankrolling the entire operation. So luxury inventory delivers, depending on the track, depending on the package, five to 10 times a higher profit margin, right? So.

one standard ticket and you're getting 10 times higher profit margin. I mean, there's no competition there, right? So you need to have a good balance sheet at the end. This is a business. This is not a charity organization. So it's kind of simple math. You failed to sell out the sweets. You might not even break even even if you sell the entire hundreds of thousands of grandstand seats. So we like to say that the profit isn't with the fans and the grandstands.

It's with the execs in the suites. That's the reality.

Vincenzo (15:06.947)
When it comes down to that balance sheet and you as a promoter need to continue, know, pay that fee upfront to host, need to absorb all the risk, you need to provide experiences for everybody. You know, you still have, there still is a level of experience you have to provide for even folks in General Admission and grandstands. Like there's still a level of experience.

And I'll again, I'll use Las Vegas as another example. It's the most recent Grand Prix I have been to. They do a great job in the different grandstands to create experiences for the people that bought in that grandstand. So if you buy a ticket in the sphere area, it's a party separate from the the area over by the start finish area. It's a separate party from the padded club. Obviously, it's a separate party from the different terms the Harmon zone, the

Lali (15:56.27)
Yeah, that's great.

Vincenzo (16:01.985)
Like it's a there are different experiences. They've done a really good job at saying we're going to give unique experiences to people in different grandstands. Now those tickets they're reasonable by I would say maybe Americans standards ticketing standards globally. I do understand that tickets are not cheap but there is a really good you get a really good experience there.

Lali (16:24.824)
You do. And I've even heard people saying, I sat here this year, maybe next year I want to experience this. So you're also creating excitement around people wanting to come back and experience a different zone. I've personally heard multiple people say that to me. So they've done something quite clever. And I think that that is a model that can be replicated at other racetracks for sure.

Vincenzo (16:47.467)
We'll shift gears a little bit. A that's used once. Now road or street circuit can only be really used once, Monaco, it takes months to break it down and put it together.

Lali (16:57.848)
Yeah, by definition.

Even more, think I've been to Monaco in middle of March and they've already been putting up a grandstand.

Vincenzo (17:10.113)
Yeah, it's I have a great I have a great video that maybe I'll find a way to share. Good friend of mine lives in Monaco and he he was said he showed a video of the whole tear down like put put together and tear down and yeah, I'm pretty sure it's three, four months before and it takes about a month after so you've got five months a year.

Lali (17:28.266)
Exactly. You're living in fancy Monaco and for four to five months out of the year, there's some kind of chaos for sure. Because I know as a fact, I was here mid-March and it was already a lot of stuff going on.

Vincenzo (17:39.319)
But not every

Vincenzo (17:44.792)
But not everything's a street circuit. There still are regular tracks. A track that is used once or for one type of race, one series, very underutilized, right? We talked about a promoter making their money or a track making its money. How are they making money beyond that one time influx? There has to be a year-round business. It has to be. It's essential.

Lali (17:47.496)
No, no, no, there's... yeah.

Lali (18:12.142)
categorically. Yes.

Vincenzo (18:13.921)
So I ask you what other types of revenue streams can.

these tracks tap into when the big global series leaves town.

Lali (18:26.36)
So there's sort of the old school one. So a track really to be profitable, to have a reason to exist needs to be sort of an infrastructure asset, right? So that means that beyond the marquee event that happens only once a year, maybe if you're lucky, you also get a MotoGP race. So you get two marquee events out of the year, right? But other than that, then that leaves a lot of free time for your track. So you need to do things like OEM testing, corporate driving programs.

track rentals, storage, even you, and you can touch this a little bit. They're getting really creative with the type of events and experiences that they're doing. have some great insight on things happening at Austin, but the reality is, there I go, that you need a healthy B2B, one time guys, put it on the tracker, without a healthy B2B income stream to sort of,

Vincenzo (19:15.393)
Only once.

Lali (19:22.984)
mitigate the cash flow that happens once a year, the track is doomed to fail. And you see there's loads of tracks in Europe, for instance, that are sort of dead and underused or not used. They're ghost tracks because they didn't figure out how to get a healthy B2B income throughout the year. And that is critical for the long-term survival of a track.

Vincenzo (19:49.986)
Yeah, you see, I love how you called out B2B income and it because it is corporations have the money, hard stop. And where, where I try to blend or explain how this works to fans that don't necessarily understand why things have gotten so corporate, things have gotten so expensive in general.

Lali (19:55.266)
Yeah, it has to be.

Lali (19:59.294)
Yeah, I heard so.

Vincenzo (20:18.839)
So unless you, the fan, wants to eat all that cost, like could you imagine how much a lot of these things would cost us sporting events if there was no corporate suites, if there was no corporate sponsorship? Like could you imagine?

Lali (20:18.862)
in

Lali (20:29.282)
Yeah. People complain how expensive. Imagine, imagine. It would be crazy. It would absurd.

Vincenzo (20:34.219)
It if it was truly one of those experiences where it's totally fan powered. Okay, great. Are you going to eat the cost of insurances and all the hospitality and all of the food, the food and beverage? Like, are you going to front for all that because it would be out. You think it's expensive to go to a restaurant now and buy a bottle of wine? Could you imagine what or a drink? Could you imagine what that would cost without all the corporate?

Lali (21:03.374)
I love that you mentioned insurance because we haven't touched on that, but that is a huge cost as well for promoters, right? Imagine the level of cost just to ensure 300,000 people and the drivers and the helicopters and the medical care, like the amount of money, right? It's...

Vincenzo (21:12.225)
Yeah.

Vincenzo (21:20.063)
forget about that, medical, security, all of those things that you don't even think about. That costs a lot of money, a lot.

Lali (21:24.974)
enough

Lali (21:30.478)
Yeah, so and then so then another another thing that that people may not know about is something that is called the subsidy factor right so many races are city-backed and It makes sense for them because it has citywide economic impact right there There's hundreds of thousands of people coming into your city. So that means hotels restaurants. They're spending at your bars it really Generates a lot of income for the city

So a city will choose to subsidize a race just for the opportunity to be a host city because that's a big deal. You can boast that you have a Grand Prix and not every city in the world can boast that. In fact, very few, right? So it's a massive deal for the cities. It brings in beaucoup de bucks and is massive PR. It attracts a lot of tourism, not only for the race, but then people get to see your city, your lovely city on television.

And then you might consider it as a destination for your next family holiday, right? So that is invaluable for a city. So they choose to subsidize some races because of that.

Vincenzo (22:38.423)
Yeah.

the subsidy there or I guess that taught that aspect of it. tying that in to economic impact and economic economic impact is huge right for a visitors a visitors bureau or again in the Las Vegas.

world you have the Las Vegas Convention and Visitors Authority and you have Las Vegas who paid direct sponsorship into Formula One, you know, close to $60 million, I believe it was I don't remember the exact number off top of my head. But they paid a direct sponsorship and a support fee to host Formula One. And it may not sound like a lot, but still that's public dollars, right? So that has to has to bring money back somehow.

Lali (23:25.422)
Yeah, exactly. You need to justify it. Anytime you're using public money, you need to justify it. There has to be a return, because you're going to have a lot of angry people. And people can be opinionated.

Vincenzo (23:34.562)
Yeah. Yeah. And there was there was in 2023, the first Vegas race, the economic impact was estimated over 1.2 billion, there was actual revenue in 2024 of 930 plus million. To me, the gamble paid off, you know, that paid off. That's those are huge numbers. And it's, it's gonna stick around for another 10 years.

Lali (24:02.402)
But because you can justify, because you can say this is going to fund public schools. This is going to get us more teachers in classrooms, roads, infrastructure. So then you're, you're not only telling the people, Hey, we need to spend all this money. We need to inconvenience you by shutting down streets and all this for X amount of time. But the reality is, guess what? We got you a billion dollars in return. So that's going to go directly into the city. So then the people are like, you know what? I can be inconvenienced for two weeks out of the year.

That's fine or whatever. I'm not sure how long it takes to build the Vegas track.

Vincenzo (24:31.799)
Takes quite a while. It's quite a bit of inconvenience for locals there. It's a bit, yeah. And also, here's the other thing, too. And I think we'll talk about this. I'm going to ask you a question that I think you're going to touch on this. But when we talked about Monaco, Monaco's been there for 100 years, the race there. So it's so embedded in the culture of living in Monaco, the race, the historic.

Lali (24:36.034)
Maybe a month.

Vincenzo (24:59.235)
race. All of that is embedded into the culture, motorsport racing in general. Yes, it's an inconvenience, but you don't live in Monaco if you don't know that. You know that's happening. In Las Vegas... go ahead, go ahead.

Lali (25:12.398)
You already moved there knowing that. And I venture guess, yeah. No, just say, this is a very unofficial poll and please Charles Leclerc, call in if you disagree with me. Please Charles, call in. I venture guess that Monagasc's in general, if there was a referendum about whether to keep the Grand Prix or not, they'd probably all want to keep it. Or I'm not going to say all, but I would say a majority would want to keep it. It's part of who they are. It's their essence as a people.

Vincenzo (25:38.957)
Yeah. Yeah.

Lali (25:40.815)
They're so proud of the event if you've if you're lucky enough to have ever been to Monaco They're so proud of this race of the heritage of the culture around motorsports So it's really other people who detest the racing in Monaco or don't think it's it's fun or You can't pass those are more the people that don't like Monaco I think that the Monaco people as a whole are very onside in this one and that's just a very

unofficial take and and i urge charles leclerc to call in if he disagrees

Vincenzo (26:13.655)
Las Vegas, the community there, they don't know motorsport. They don't care about Formula One. it'll be a long, it'll be a slog for Formula One and the Las Vegas Grand Prix for a while before they become part of the community. They still don't feel like part of the community. It's kind of like this thing that came in and disrupted our world. Now, mind you, they've also taken the least

Lali (26:23.982)
Yeah.

Vincenzo (26:41.923)
The slowest weekend of the year and made it one of the busiest But that doesn't matter to people right if you inconvenience and inconvenience them they are they're annoyed and until they build up that motorsport aura It's not gonna matter same thing with Chicago NASCAR. They had a Chicago a street race and People complain now. I heard a lot of good things about it, but there was also a lot of other issues and is there a motorsport community

in the city of Chicago, in the actual city, I'm not talking about Chicagoland or anything like that. Talking about the actual city that people wanted to see that race there. I don't know. Now they're already, believe, they're reassessing and they're not going to have it this year. They might come back the year after, whatever it might be. But you have to build up that motorsport community. I know you're going to talk on this. So I'm going to ask you this question, kind of a final chat here.

Lali (27:33.112)
You have to.

Vincenzo (27:39.029)
If we were advising someone on acquiring a new Grand Prix asset, what would be the top three non-negotiable items on their sustainability checklist?

Lali (27:50.031)
So I think the way you and I and I I'll speak sort of for both of us because we are very in sync It's sort of in our although we disagree on a lot of things. We agree on business a hundred percent Which I is a great thing for a partnership. I think that the first thing is something I spoke about Previously you have to control your premium inventory That's non-negotiable. You have to sell out that inventory the highest rate possible

It's life or death for a circuit. Really. you, if, if, for, for a race to have longevity, you need a promoter to make money for the promoter to make money. They need to sell out this premium inventory. Right. So that's right off the top. The first one. I think the second one we also touched on is your, revenue diversification, right? So you, have to have cashflow, this B2B class cashflow coming in year round.

or else you're gonna end up with these ghost tracks of Europe that are everywhere. You have to find a way to monetize the circuit. People are doing it in unique ways. It's not only the ways I mentioned now, the OEM test days or track days. There's suites being built. There's people who can fly in and bring in their own Ferrari. There's all kinds of really fun, creative ways to make money off your racetrack. You need to get in on those.

and need to find some very clever B2B partnerships. Yeah. Yeah, speak to that. You have something. Yeah.

Vincenzo (29:16.707)
Speaking of that, Koda has the T11 car condos that they built and it is this luxury experience. And I do want to talk about luxury in another episode because I think luxury is a very specific word and it's a very specific phenomenon that Formula One brings on but also other types of racing.

It's luxury automotive. It's a luxury automotive country club essentially there you could buy these homes, condos, they range from I believe if you were able to get in at the very, beginning they were for you know, you can get a smaller one for 400 almost 500,000 us but they went all the way up to 2.45 million. You could get a small 1500 square foot all the way up to 6000 square feet. It's at turn 11 at coda.

Lali (29:47.118)
Okay.

Lali (30:01.422)
cheap.

Lali (30:12.043)
Nice.

Vincenzo (30:12.387)
And there are some really incredible, incredible amenities. I'm actually pulling it up right now because I don't want to miss out on anything. there's a private race platform, viewing platform. There's custom build out so you can build out however you want. There's an entire clubhouse. So think country club. There's a pool. There's conference spaces. There's other clubhouse amenities, like restaurant and bar just for your community there. There's a mezzanine space.

Lali (30:38.23)
Yeah, it's amazing.

Vincenzo (30:40.781)
There's dedicated you get dedicated track time, which again, this is why similar to a golf club, right? A country club, you get dedicated golf time while you get dedicated.

Lali (30:48.619)
This sounds a little bit like the John Travolta home that you hear about that he flies, people fly in their 747s and just park them in their house.

Vincenzo (30:54.416)
You can fly right into it. Yeah

But yeah, so these things like that's really cool. It's a whole that's a motorsport or a racing culture community. They're building there. You can buy into that and you have access to other like minded folks. All it does is it gives it gives the track. It gives the it gives them another reason to stay.

Lali (31:02.339)
Amazing.

Lali (31:09.325)
Yes.

Vincenzo (31:23.509)
around as long as possible, bring more. Now they'll want to bring more racing to the track, right? Because all you have a group of people that are sitting here, they don't want to sit around an empty track constantly that they can't use.

Lali (31:34.764)
of course, but also that brings HOA fees, right? Like that brings other other other revenue streams. So

Vincenzo (31:38.879)
yeah. I got to find that I have to find the numbers. had them at one point because the developer had reached out to me. This is a couple years back. We had talked about doing some some promote co-promotion thing together, but it's yeah, it's just it's very, cool. Very, very cool. Yeah, car condos.

Lali (31:56.611)
That sounds awesome. So going back, you said sustainability. So we said you control your premium inventory, you diversify your revenue. And then I think that there's a third one that is really important and you have to forecast realistically. So it takes time, as you were saying, to build a racing following. You need to establish yourself as a racing destination. You can't assume a sellout. Maybe the first year people decide to show up because, wow, it's Vegas.

Vincenzo (32:25.377)
new.

Lali (32:26.422)
It's wherever you need to, you need to really establish yourself. You can't assume it's going to sell out year over year. but you also have, you also know that, that your hosting fee is fixed, right? So you have to really be careful with your, with your forecasting, be realistic. And really that sort of gives me like a three a or a fourth one, which is listen to your racing community. It's just what you were talking about. Build a racing community, tap into the local fans.

they're going to be major allies for your racetrack. They're going to be the ones when people stop showing up, they're going to be the ones that keep showing up and are there for you to support the racetrack. So you need to really listen to them, tap into them and be kind to that fan base.

Vincenzo (33:13.143)
I mean, that's such a, mean, without the community, you don't have anything. And without a community that is going to become your advocate, right? This is like anything else. Your community is gonna become your advocate. And if you don't have that, you you miss out. I think that, yeah.

Lali (33:19.393)
No.

Lali (33:33.487)
It's the Indianapolis Sergeant Drivers, but it's like if you think about Indianapolis Motor Speedway, right? There are people who have been season ticket holders at Indianapolis Motor Speedway for generations. the season ticket holders, these some of these people don't even follow IndyCar the rest of the year. They show up for this one event because it's their family tradition and they've had these season tickets. And I really I have goosebumps because it means so much to them. It means so much to these families to go

Vincenzo (33:38.019)
Mm-hmm.

Vincenzo (33:49.795)
Yeah. Yep.

Lali (34:02.754)
to the Indy 500, it's part of their family's heritage, their legacy. That track has done a phenomenal job of doing that, of building this community. And truly, they hit it out of the park. They knocked it out of the park.

Vincenzo (34:13.377)
And this, yeah.

The Speedway has become a character in and of itself. It is the main character in its own conversation.

Lali (34:20.246)
Yeah, it is a carter. Yeah, literally people who do not follow any other IndyCar race will show up there and route like it was the last race of life because it's they've the the racetrack itself has so much history, so much mystique, such a beautiful community has been built around that track. Obviously that took a long time, but that is something to to emulate and to try to build in your

local city at your local track those people will show up year after year if you treat them well.

Vincenzo (34:57.537)
I think you've made it clear that what's important for a promoter to do is to focus on things like real estate, negotiation. You you mentioned premium hospit, those are so important. It's not enough to, the racing is very important. Yes, 100%. That goes without saying, but in today's world, there's so many other factors that go into it. It's not just a track.

go race around the track and call it a day. There's so many other things that go into it. I think the circuit business itself or being in that world, it's a discipline of leverage. Yes. There is the hosting fee that you have to pay. That's your entry ticket, right? So knowing that and understanding that pre... Yeah. Understanding that pre...

Lali (35:50.542)
That's your fixed cost, like we all have fixed monthly costs, right? That is your fixed cost.

Vincenzo (35:55.588)
Understanding that premium hospitality is your profit driver and if you don't own that you have to truly own that experience Experience we use the word experience for a reason if you're not owning that premium luxury hospitality experience it You're just a glorified marketing platform for somebody else for a for the rights holder like you're just it's a past You you're a pastor like okay. Yeah, we host our we we have our race there it's a nice layout, but they don't do anything for the fans and

Lali (36:14.19)
100.

Vincenzo (36:25.279)
Listen, we've had a lot of conversations where we've heard things like there are some historic tracks that are not really budging on wanting to come up to the modern age with amenities for folks. And there's a younger generation that's saying, you know what, I'd rather go to Monaco because I want to go hang out on the yachts. Like I don't want to go to this other track that's so historic and that's, you know,

Lali (36:52.715)
Yeah. Well, if you think

Vincenzo (36:53.599)
Incredible racing but I'm using a porta potty and I'm waiting in lines and it's hot they don't even have water you know things like that so all of that goes into effect. You don't want to just be somebody else's marketing platform.

Lali (37:08.192)
No, absolutely not. And you think about it, even the biggest corporations, they can only buy out certain hospitality suites a year. They can't buy them at every race. So you have to make yours the most attractive one. Yours has to have the best experience so that Qatar Airways or American Express or whatever humongous corporation is going to buy a hospitality suite wants to buy yours.

Vincenzo (37:16.995)
Mm-hmm.

Vincenzo (37:32.419)
I think on that note, should, we're gonna call this one, I think that's it for our paddock chat or our circuit chat this week, but we want you to make sure you come back for our next episode and the next episode. What you can do is subscribe to the podcast, any of your favorite podcast player, just go and hit a subscribe. We are publishing weekly. We also do have a newsletter that comes out multiple times a week that is basically an addendum or a

Lali (37:46.081)
all the episodes.

Vincenzo (38:01.387)
in addition to this podcast, but it goes a little bit deeper onto just the world of the money behind your favorite racing series and what's happening behind the scenes, how the sausage is made.

Lali (38:13.71)
Perhaps it speaks of the business of speed, would you say? Ooh. Ooh.

Vincenzo (38:17.149)
yes. That's why we call it the business of speed. I'm Vincenzo Landino.

Lali (38:23.64)
I'm Lali Mikkelsen.

Vincenzo (38:25.368)
and will see you on the next one. Ciao ciao.

Lali (38:27.374)
Ciao for now.