Uddeholm Swedish Rally reduces their permanent organization from four people to one. Just two years ago the organization on a full-year basis consisted of at least nine people. I know because I was one of them. Why does this happen and what will it mean?
First, why does this happen?
From the start of 2008, the WRC calendar was divided by FIA and the events now appear every 2nd year in the calendar. This may be good to bring new events into the championship – but for old events it’s a hard time of adaptation. Sponsor agreements are based on an annual event, employees are hired, investments are made – and all economic calculations are based on the (shaky) fact that you need to get a huge amount of money in based on four intensive days of rallying. Events hugely sponsored by the governments may survive quite easily by just saying, “this is the best we can get”, but for the Swedish Rally it’s harder. From what I know they get around 10 percent of the turnover from local authorities/municipalities/etc, and the rest of the incomes need to be paid by sponsors, teams and spectators. FIA is controlling entry fees etc, so not much can be done there. Sponsors and spectators are left to pay – and here starts the problems.
Sponsors pay for marketing, and with no marketing – no money. For short this means “half the events – half the money” (unless your selling talent or market value increase badly). Spectators on the other side are much the same; they pay for tickets, drinks, merchandise, etc during the event – not just to be kind. It’s not very realistic to think that you can just double all the prizes or attract a lot more spectators easily. To adapt and optimize the organization to this kind of settings take a long, long time.
The Swedish Rally tried to be offensive; they created a new rally village with a service area more concentrated around the super special stage and brought their event into the Swedish Championship calendar. But they were unlucky. The weather was bad in 2008, a lot of spectators stayed at home and the Swedish Championship event needed to be cancelled because of the road conditions. Ticket incomes wasn’t good enough, they had to pay back 1M of Swedish Championship entry fees and they still had the two year old (and very important) agreement to sell the billboards for TV coverage of the WRC in Swedish Television. For short: a hard 2008 for the Swedish Rally.
With a new event in 2009, maybe they could challenge for better luck (and weather) and try to get going again by still being offensive (just a little less), limiting costs and hopefully getting back on feet. During this weekend Rally Norway is running over the border with perfect conditions. If Sweden had their event this year everything would be fine – because even Karlstad have a few decimeters of snow currently and the conditions on the stages are even better. But they have no event, so that doesn’t help and the economy wont get better this year.
Instead, I’ll try to answer the second question; what does this mean?
To run a World Championship event is a huge piece of work. The only man left now is Bertil Klarin, “Mr Swedish Rally”. He’s been in the game for a long, long time and I must admit (even though I’ve often been very critical to his decisions) that he is probably better fitted to do the work than anyone else. Why? Because he knows everything about the WRC, he has the contacts – and most of all; now it’s all about surviving! Bertil, along with the board members of the Swedish Rally, will have to do everything they can to get funds to hire people. If they can’t do that, the Swedish Rally story will end. But it’s hard. The current employees will of course disappear to other jobs, and to organize a WRC event isn’t a piece of cake – even though chairman Sven-Åke Enochsson says that “the rally interest is big – there are many people with expertise”. I’ve been working with Sven-Åke and I really respect him, but that sounds like bullshit. A big interest doesn’t at all mean you’re an expert, and arranging a WRC round requires professional competence in many areas; sporting, marketing, logistics, etc. And that doesn’t come by interest. That comes by long experience and education. Sven-Åke -if anyone – should know that.
I don’t say the 12 rounds calendar is bad – but for sure it’s tough to the organizers. Norway has been close to ruin after their event in 2007 which was a huge economic failure (and having no event in 2008), and I wouldn’t at all be surprised if more events went into trouble. I hope the effects of the new calendar will be better events and maybe events that are economically more solid. However, I wouldn’t be surprised if it instead makes organizers leave the championship. It’s hard to build a competent organization without the possibility to hire them permanently, and to hire them permanently cost’s money. Big money.
So, I guess no one knows where it will end. I just keep hoping that Bertil can make it and get at least his three colleagues back into the office making the 2010 Swedish Rally a good one. Otherwise, the Swedish Rally will be a piece of rally history.
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Tags: bertil klarin, employees, fia, personnel, uddeholm swedish rally, victim, WRC
I am curious, do you have any idea which events have the most and least funding among those in the WRC?
In Mexico, at least, I know Rallymex had about 10 full-time employees in 2008, including a full-time graphic designer, two IT engineers, secretary, director, operations manager, sponsor relations manager and others, and a total budget of around 2M USD, although I don’t know if that budget included any contributions not made in cash.