For many American car enthusiasts, the word “spoon” conjures up images of the idyllic small town at the end of a scenic Southern California road. A place where your average Joe can go to feel like a movie star, for example, or meet the girl of his dreams. For decades, Hollywood has filmed many of its most iconic cars and bike scenes at the half-mile track located in the picturesque city of Los Angeles.
But what if we told you that your typical American town couldn’t support a racing franchise? Or what if we told you that, in order to keep the magic alive, you would have to travel to Europe or Asia to experience top-notch motorsport?
With the 2021 season fast approaching, it’s time to find out how big is Spoon River Speedway. Or as we’re going to call it from now on, simply “Spoon.”
The History Of The Track
Hollywood has always been a big fan of motorsport, especially since it allows for such beautiful and epic car scenes. One of the earliest representations of motorsport in Hollywood was the 1938 film ‘Stagecoach,’ which showcased the dangers and beauty of Western road trips.
The first NASCAR race was held in Los Angeles in 1951, with the first Cup Series race taking place the following year. The Los Angeles Memorial Coliseum was also the host of the World Championship auto races for 11 years, from 1951-1961.
Since then, the popularity of NASCAR in Southern California has waned, slowly decreasing over the years. The last NASCAR race held in the region was the Ford EcoBoost 250 at the legendary Riverside International Raceway in 2020. The race was won by Kyle Larson, giving him the inaugural win of his career.
The lack of local interest in NASCAR was represented in 2021 when just two of the 28 proposed races for the season were held in the region — one in Bakersfield and one in Ontario.
Is It Big Enough?
Let’s get to the good stuff now…
From a financial perspective, is Spoon big enough to be a top-tier property? Let’s take a look. First off, the operating budget for 2021 is not yet publicly available, but we can make some estimates based on previous years’ figures.
In 2020, the annual revenues at Spoon were $4.9 million, with expenditures totaling $4.9 million. Not bad considering the track is located in what used to be the most expensive city in America.
The track’s ownership includes limited partners, with an investment group led by Steve Prise, a former NFL player and current businessman, owning 60% of the property. Steve’s son, Chris, serves as the CEO of the track. The rest of the equity is held by various private investment groups across North America.
On the surface, it seems like Spoon has enough money to continue operations. However, a more in-depth analysis shows that it might not be as rosy as it looks.
Expensive To Run
The operating budget at Spoon is quite high, even by racing standards. It was $5.4 million in 2019 and $5.4 million in 2018. It’s almost certain that, without major improvements, the operating expenses will be at least as expensive in 2021. Even with his team’s success in 2020, Christopher Prise estimates that it will cost his father at least $6 million to run the team in 2021.
To put that into perspective, the average cost to operate a Cup Series team in 2021 is $2.67 million, according to the Alliance of Professional Racing, which includes everything from personnel to licensing, equipment, travel and catering. So, not only is Spoon a premium property to own, but it also requires a sizable budget to operate.
One way to save significant amounts of money at Spoon is to cut back on the non-essential expenditures. That means cutting back on the travel budget, which is high, especially since the team usually rents hotels for the big sporting events.
One way to reduce the hotel costs is to switch to more luxurious accommodations. One option would be to rent executive suites at the local La Quinta Resort & Casino for each race. These rooms are on the pricier side, starting at around $30,000 per night, plus applicable taxes. But, considering that travel costs alone for the whole team are around $30,000 per day, you’d be saving a significant amount of money. In fact, you might even be able to make back half of your investment, depending on how well the team does this year.
Even though the operating expenses are high, they’re nothing compared to what Spoon must pay for racing-related expenses. These are the expenditures that directly affect the bottom line, like pay-per-view fees, driver salaries, gas money, etc. The figures here are also from previous years and not from 2021 yet, but they should give you an idea of the magnitude of this category.
In 2020, the total expenditures for racing at Spoon were $11.9 million and in 2019 they were $11.3 million. In comparison, the average Cup Series team spends around $6 million per year on racing-related expenses. So, the category is definitely a significant one. The main reason for this is the regional nature of NASCAR, with most of the races taking place in and around the Los Angeles area. This has caused the league to repeatedly ask for permission to move the schedules to mid-week or Sunday night so that more people can attend. The problem for Spoon is that moving the dates causes significant economic loss, as many businesses, especially those in smaller towns, base their entire economic model around the races.
This year, the NASCAR schedule had 28 races, with only two — the Daytona 500 and the Indy 500 — taking place outside of Southern California. Most of the others were either postponed or cancelled because of the pandemic. This in turn caused the attendance at the tracks to plummet. For example, the California 500, which was scheduled to take place at Phoenix International Raceway in April, was postponed to October and eventually cancelled. The only race held in California in April was the Monster Energy Open, the first Gander Outdoors Truck Series race in the state.
One of the biggest expenses at Spoon is the annual license fee. This fee, which started at around $25,000 in 2019 and increased marginally to $25,750 last year, is based on the number of cars that will be competing at the track. For example, if you’re competing in five-star events like the Daytona 500 or the Indy 500, you have to pay the $25,000. But if you’re competing in week-long events like the Truck Series race at Talladega, you only have to pay the $15,000.
This year, the license fee will be $25,000 for the Daytona 500 and the Indy 500, $18,750 for the Truck Series race at Talladega and $12,500 for all the other events, including the ARCA race at Talladega, the NASCAR Canadian Tire Series, the NASCAR Mexico Series and the NASCAR Whelen All-American Series.
Another massive expenditure at Spoon is the equipment costs. This includes everything from the cars to the camping gear, the uniforms, etc. The figures here are also from previous years and not from 2021 yet, but they should give you an idea of the magnitude of this category.
In 2020, the total equipment expenditures at Spoon were $6.3 million and, in 2019, they were $6.1 million. In comparison, the average Cup Series team spends around $3.5 million per year on equipment. So, this is another significant category for Spoon. It needs to invest heavily in the upcoming season if it wants to remain competitive.
Food is one of the biggest expenses at a motorsport venue, especially one as prestigious as Spoon. It doesn’t come cheap, either. The figures here are also from previous years and not from 2021 yet, but they should give you an idea of the magnitude of this category.
In 2020, the food expenditures at Spoon were $1.7 million and in 2019, they were $1.6 million. In comparison, the average Cup Series team spends around $1 million per year on food and drink.