Jan 1, 2002
© 2017, Roadracing World Publishing, Inc.
(This original, copyrighted material may not be copied, cut and pasted, published or otherwise reproduced in any way in any medium, which means, don’t post this on another website or BBS. If you want somebody else to see this, send, share or tweet a link or post a link to this page.)
Copyright 2002, Roadracing World Publishing, Inc.<BR><BR>AMA gave up $11.4 million in guaranteed fees and another $8.1 million in potential membership revenue when it switched promotion of the AMA Supercross Series from Clear Channel Entertainment (CCE) to JamSports, a Roadracingworld.com analysis has concluded.<BR><BR>To justify the move in economic terms, AMA will have to net $19.5 million from a start-up series that will compete against the established CCE Series, which is continuing without AMA sanction.<BR><BR>The $11.4 million and $8.1 million figures represent revenue over the seven-year term of a proposed contract renewal rejected by the AMA.<BR><BR>Annual payments CCE would have made to the AMA (related to the Supercross Series deal) include the following:<BR><BR>Supercross sanction fees: $1 million<BR><BR>Back gate (rider licenses and entries, mechanic passes): $200,000<BR><BR>Rider medical insurance fees paid to AMA: $93,000<BR><BR>Official fees: $90,000<BR><BR>Contingency program administration: $50,000<BR><BR>In additional, CCE offered to buy AMA sanctions for other CCE motorcycle racing programs not currently sanctioned by AMA, (including National Arenacross, Regional Arenacross, CCS road racing, F-USA dirt track and F-USA road racing), for a total of $200,000 annually.<BR><BR>The above annual fees total $1.6 million, for a seven-year total of $11.4 million.<BR><BR>In addition, an estimated 15,000 riders and 15,000 mechanics at CCE motorcycle events (9000 in arenacross, 300 in Supercross, 5500 in CCS and F-USA road racing, and 100 in F-USA dirt track, with each rider bringing just one crew member, a conservative estimate) would have been required to buy $39 AMA memberships worth $1.2 million per year or $8.1 million over seven years.<BR><BR>CCE also purchased a Supercross transponder scoring system for $100,000 which will have to be replaced by AMA for its own series.<BR><BR>It's impossible to estimate a value for AMA brand exposure associated with TV coverage of CCE Supercross and Arenacross events.<BR><BR>But the immediate impact of the decision to switch from Clear Channel to JamSports over a seven-year period is a $19.5 million decline in AMA revenue.<BR><BR>To see if it was a good decision, all we have to do is see how much revenue the AMA realizes from its 2003 Supercross season with JamSports.