It costs an enormous amount of money to put on a car race on a temporary road circuit like Edmonton or Toronto.
Millions of dollars.
Promoters usually know this going in and budget for it.
Because the circuits are temporary, the promoters usually form partnerships with the municipalities involved. There are often financial subsidies or, in some cases, the municipality could agree to sponsor some or all of the race.
Such was the case in Edmonton. Last July, the city of Edmonton and Octane Management of Montreal (promoters of the Canadian Grand Prix), reached agreement for Octane to promote three IndyCar races at Edmonton’s City Centre Airport and the city would put up $5.5 million as a major sponsor.
The Edmonton Indy was started in 2005 and was an instant success, although attendance started tailing off almost immediately because it was primarily a “local” event. Outside of the people connected with the race, few people from outside Alberta went there for the race.
Octane saw this as a terrific opportunity. It planned to cross-promote the IndyCar race at the Grand Prix and planned to sell air-hotel-race packages to F1 fans to go to Edmonton to watch the Indy cars.
Everything was peachy until Octane became aware that changes were being made at the airport that it — apparently — didn’t know about and which would have a serious impact on their ability to promote the race without losing their shirts.
There are two runways at the airport. Previously, the Indy car race used one runway while the other remained open for private planes and for medical emergencies.
In August, several weeks after this year's race when the Octane deal was sealed, the city closed one of the runways permanently and asked Octane to come up with a new track design that didn’t involve using the other one.
As you can imagine, this was a bit of a gobsmack. And to make matters worse, when Octane configured a new track and came up with an estimate to pave it, the figure came in at between $2 and $3 milllion. When Octane asked the city to help pay the additional bill, the city said no.
As a result, word leaked out yesterday that Octane had pulled the plug on the Edmonton IndyCar race. A full statement was promised for today.
A source told me this morning that the runway closing was always in play. “That’s why they moved the grandstands this year from Turn One to the pit straight,” he said. “It was a bit of a dry run.”
But then my source dropped his own little bombshell.
“I don’t think Octane was aware, at the time they signed the contract, of what was coming,” he said. “Other people did, but not them. I think they made a deal predicated on what they saw and what they were told. I don’t think the runway would have come up or else they might not have made the deal they did.”
I can imagine Octain is browned off. So is IndyCar. Terry Angstadt, president of the IRL’s commercial division, did not sound pleased when he said, more of less, that Edmonton is now off their list.
I suggest, however, that this thing is not over. When other members of Edmonton city council become aware of what’s happened, and the timing, questions could be asked. The Chamber of Commerce could become involved, not to mention the fans.
Edmonton has a team in the NHL, giving the city an international presence. The Indy car race also served that purpose.
Which means this race might be on the canvas, but I don't think there's been a knockout.
Angstadt, incidentally, said IndyCar is really interested in going to Vancouver. Unfortunately, there is no place to map out a circuit for an Indy car race anymore. The Expo ’86 lands have all been developed.
Which leaves Calgary — always a possibility. But would Edmontonians sit back and let that happen?