Jan 1, 2002
© 2014, Roadracing World Publishing, Inc.
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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.