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THE RACERS EDGE

RACE TRACKS TAKE CHARGE—
Tracks opt for vendor permits in 2002
By Russ Bond — Courtesy of INSIDE KARTING Magazine

Editor note: All dollar amounts in this article are listed in Canadian $. The US equivalent is approximately $1.50 for each Canadian dollar.

Ontario tracks have — in the past — been a place for just about any karting dealer to do business on any given race weekend. That is changing. Most of the Ontario track owners have gotten together and have come up with a “vendor permit” that will be required for any kart dealer wishing to go to the track to support their clients.

Tony Ventresca, who manages Goodwood, explained the decision to “Inside Karting”. “It has nothing to do with racing. It has to do with coming into my business, and doing business. This is nothing new. I had it last year. People are coming to my track and doing business, I have to collect something for that.”

Other track owners said basically the same thing and they have a point. Whenever you get an event that draws a crowd, you simply can’t expect to do business on someone else’s property without paying a fee. The amount of the fee is the source of the problem for most dealers that don’t own a track.

“It is $5000 (Canadian) for a year, or $600 per day. But for the OKRA two-day weekend for example, there is a $600 permit that covers the whole weekend,” said Ventresca. At Sutton, home of 3S Go-Karts, the price is a little different. Enzo Chiovitti told us how he came up with his price.

“We basically came up with a $1000 a day (fee), because you (must) look at the profit margin. If we sell $4000 on our property one race weekend — just to say a number—and if we make a 40% markup, that’s $1600. When they come to my property—for an OKRA race, or one of my races, I used to sell $3000 to $4000 worth; the last two years, I sell $200 to $300 worth. There’s 15 guys selling on my property.”

Bob Cameron, who owns the Hamilton track has a different solution. “You can sell whatever you want here, you just have to go through me” In this instance, if you sell your chassis in Hamilton, you sell them to Cameron, and he sells them at his track.

Of the kart dealers and importers we contacted — who don’t own tracks — only one would talk on the record. “I believe it is vitally important that the karting industry support track owners. It is important to have decent tracks where karters can practice and race. The idea of a vendor who attends the local track week in and week out selling products and having to pay a vendors fee is not a new idea”, said Hurricane Racing’s André Champagne.

“I would have no problems with paying to go to support my products at someone’s track if that were the case. Let’s not forget the main reason why vendors exist. They exist because the tracks can’t or have not provided the product lines or the support that all the karters require. This is not a bad thing, it is just reality.”

That is the issue in a nutshell, but looking past the fees and who does and doesn’t own tracks may be the key to understanding what’s going on.

“A lot of things are happening in the industry; there is a kind of changing going on”, said Ventresca, who then added, “Older people are moving on. Leamington has changed hands in the last couple of years, Hamilton changed hands last year. Goodwood is under new management—I don’t own the dirt and the ground, but I do own the business. People are starting to look at these things in 2002 values. You can’t buy these places for $70,000. They are million-dollar properties. I get the same amount as any other dealer — there are only 12 events. People say ‘That’s kind of expensive for 12 events.’ Well, I’m paying $350,000 for those same 12 events.

“I talked to other track owners about it. In fact, I initiated a lot of this: I don’t mind admitting it. I was asking the other owners last year, ‘Guy’s, what am I missing the boat on?’ These guys are coming on my property and doing business for free. We’re giving these tracks to the kart clubs for (as little as) $1200 — someone has got to explain to me how you are paying the bills?”

“If I owned this thing since 1975, and didn’t have a mortgage—life’s a lot different. Enzo (Chiovitti) is in that prime situation. It’s no secret—I’ve seen a listing for 3S Go-Karts for $1.3 million. If you go to prospective buyer’s, (and say) that you’re making $60,000 to $70,000 a year, then factor in a mortgage of $120,000—you’re losing money,” said Ventresca.

Chiovitti backs up the point of what is happening in the karting industry in Ontario: “That’s exactly what it is: people cutting prices and other stuff, then they come into other people’s property to do business. I pay tax. I pay Insurance. I fix the track. I clean the garbage and other people come here to make their business. I can’t do this at Canadian Tire, why should the be able to do it here?”

It’s not so much the manufacturers—because I still sell more karts than anybody else (does) — it’s the ‘dealer-in-the-basement’. They don’t pay rent, don’t pay business tax, don’t pay business tax, they don’t pay anything! Because of the Internet, they go and see the cheapest stuff in the United States, bring it across the border. Then they come to the track and as long as they make a little bit of money to pay for their kid’s racing (they’re happy). They are actually hurting the people that try to make a living out of karting.”

Kart tracks are million-dollar properties these days and they have to be run at a profit to stay in business. Any karter will understand that, but what they might have trouble understanding is that if you are one of the track owners who sell chassis, there is little chance you will be charged to sell your chassis at another track, even though Ventresca points out there is nothing in writing to this effect.

Business for the karting dollar is getting tougher with each new chassis, engine or part that comes into Ontario. Karters have a choice to support whichever dealer they want. They just have to make sure that if they support one that doesn’t make sure that if they support one that doesn’t own a track—take extra parts with you to the races.

About the publication: “Inside Karting” magazine is Canada’s Source for Karting News. Printed bi-monthly, it is available by contacting 416-962-7223 or e-mail to subscriptions@insidekartingnews.com.

END

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