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The Pro Tour / Ipswich Saga

The underlying reason(s) for the next event on the 2011 Rotax Pro Tour moving from Ipswich to Warwick next month are a hot topic in the discussion forum on Kartbook at the moment (read the thread HERE).

A communication from the Ipswich Kart Club to its membership is now in the public domain (and on the club's website), and is thus published below. A response from IKD Managing Director Ian Black is below that.

Communication from Ipswich Kart Club:

To all IKC Members

We are sure that most if not all of you now know that the proposed round of the Pro Tour which was to be held at Ipswich in July will not go ahead. Instead the promoters (IKD) have decided to move the event to Warwick.

We are disappointed that IKD have chosen to release a statement that puts all the blame for the cancellation on the Ipswich club and is an inaccurate summary of the discussions that took place. There are always two sides to every story and below is our side of the story.

Firstly, some background information for members who may not be aware of what it actually takes to run the club:

The Ipswich club is run as a viable business. Our aim is to make the club the best possible venue for kart racing.
To do this takes money – lots of it.
Our Membership and Practice fees pay the standard monthly bills – lease, rates, utilities, repairs and maintenance etc.
Race meetings are a source of income which we need to make any improvements to the facility.
Our club meetings provide on average over $8,000.00 clear ex tax profit per meeting.
Hosted meetings, where we hire out the track to external organisations and help organise the event, are an opportunity to raise the profile of the club and make extra income to fast track some of the projects to improve the facility.
Hosted meetings require an enormous effort from the club as these are normally run over two or more days and require extra work not normally done at club meetings. Therefore we would expect that such meetings should be more profitable than a single-day club meeting.
To date this year we have hosted CIK, Pro-Kart and Supercheap Series rounds. CIK provided a healthy profit for the club whereas the Pro-Kart meeting was run at a loss and the Supercheap meeting provided only a quarter of our normal club meeting profit.

Now to the Pro Tour event.

IKD established event guidelines and provided these to the Club (these guidelines can be made available to any club member if requested). From the outset we had many questions as the guidelines seemed to stipulate everything that the club must do and things that IKD may do. We were definitely not in agreement with the financial arrangement, which stipulated that IKD would take $60 per entry from the $200 entry fee and the club was to foot most of the expenses for the meeting.
At that early stage we put the documents aside for later scrutiny and discussion as the event was in July and we had 8 meetings to plan and arrange before that, including the CIK event.
After the conclusion of the Supercheap Series round a few weeks ago we turned our attention to the Pro Tour round.
The Committee decided that the $60 fee per entry and having to pay most of the expenses was too much. A $40 fee per entry was considered more realistic. After crunching the numbers we found that the profit could be as low as $5,000 depending on the number of entries. Whilst such a figure might be acceptable to some clubs, at Ipswich that would be close to a loss, given that the track would be closed for normal practice the whole weekend.
The treasurer then put forward the idea of charging a fixed track hire fee for the event instead of the profit sharing model put forward by IKD. That would give the club certainty regarding the income. The onus would be on IKD to promote the event well and, if they had a large number of entries, they could well make more than the $60 fee they were asking for.
A letter was sent off to IKD with an income and expenditure spreadsheet showing that, under IKD’s terms the club would not be making a reasonable profit on the event.
The letter stated further that we preferred a straight track hire fee for the 3 days required for the event, plus the extra day we would need to close the track for practice. The fee would be $10,000 including GST. We felt that was a reasonable charge, given our club meetings are generating $8,000 profit ex tax for one day’s effort. IKD would also need to cover all the expenses for the meeting.
IKD responded to the Secretary by phone saying that they would not agree to those terms.
The treasurer called Mr Ian Black of IKD to discuss the matter further. He said that the club stood ready to run the meeting but that the financial arrangement was not acceptable. The treasurer asked Mr Black whether he could suggest another figure that might be acceptable but Mr Black was adamant that we accept their terms or the event would not be run at Ipswich.
At this point there was a stalemate. The club could not accept their terms and they would not accept ours or suggest an alternative.
The Treasurer then asked Mr Black to formally respond to the letter. Mr Black responded that the meeting would not be held at Ipswich.

This is the full and true story. The important things to note are that we did not cancel the meeting. IKD did. We were willing to negotiate. IKD was not. So unfortunately there will be no Pro Tour round at Ipswich this year. The Committee sincerely apologises for the inconvenience to Rotax competitors. We wish Warwick well for the event and we hope that next time IKD will come to the table prepared to negotiate rather than assume their terms will automatically be acceptable to the club.

Andrea McKay
IKC Secretary

Communication from IKD:

Hello again,

I would like to respond to the letter sent by Ipswich Kart Club….I am not even sure where I should start.

The overall financial side of the Pro Tour is the following: Entry fee is $200. Club gets $140 and IKD gets $60

IKD spends more than we get on promoting and running the Pro Tour. We spend the money in the following areas:-

IKD pays for Graeme and Jeanette Monds to attend each and every event. Graeme is our series Clerk of Course and we pay for his airfares, accommodation, car hire etc in full. We do this so that we have a consistent Clerk of the Course and he does a great job too.
Trophies, IKD usually spends around $4000 on trophies at each event (host club pays $2000 and IKD pays the difference)
Grid Girls etc…paid by IKD in full
Commentator and Media Duties (Ian Salvestrin/Matt Payne) we pay for their services, air fares, car hire, accommodation, food etc
IKD has 3 or 4 staff at every event to assist the host club in many areas. These people are paid and also have to be fed and accommodated. The track dress up for example takes 2 people most of Thursday alone.
Samantha Coghlan works at IKD on average 3 days per week. It is hard to tell exactly but I would guess 70-80% of her time is taken up with the Pro Tour. Preparing Supplementary Regulations, arranging Flights, accommodation, communicating with clubs and competitors, ordering trophies, arranging Grid Girls, organizing prizes or social events, designing & organizing series T-Shirt, organizing dates with host clubs for next year, updating the Rotax website, managing the Rotax Rankings, updating all the Pro Tour documentation, Facebook, Twitter etc etc.
Any special events that we have done are also all paid in full by IKD. These have included free BBQ’s and dinners, magician, comedian, singers, sports psychologist, Jason Richards dinner evening etc. IKD also gives away prizes at each event.
IKD has invested $3,000 into a tyre sniffer and about $3,500 into software and bar code scanners etc so that we can help police tyres at each and every event
IKD has invested $4500 on custom made software to facilitate the Rotax Rankings to ensure their integrity and longevity
IKD has invested $2000 on a special printer to print bar coded registration cards so that we can fully utilize the scanning equipment we have invested in
$10 from the $60 IKD receives will go to the drivers who attend the Rotax Grand Finals in Dubai
The list goes on and on

FACT…IKD spends far more than we get from the event. Sure, we do this to promote Rotax and it provides racing for Rotax which generates tyre sales etc but our $60 (really only around $55 once GST is accounted for) does not even come close to what we spend on the Pro Tour. So when we already do our fair share and a club attempts to get more at the last minute I have an issue with it.

Now to the clubs side, essentially clubs take care of the normal expenses of running the event. Like they do at any event they run BUT in this case they get $140 per head which is quite good money. Is it enough money??? Well, generally speaking clubs are fighting for events. Clubs like Todd Rd, Geelong, Dubbo, Port Macquarie and Canberra have all hosted events and have all indicated that it was a financial success for the club and they want the event again. I have even had a club report a profit of $25,000 for the event and I think that is great. I think $15,000 profit would be a minimum and $20,000 is probably about the average a club would make. The more the better for the club because facilities need to be upgraded and maintained. Coolola, Toowoomba and Warwick were all prepared to take this event once Ipswich was cancelled which shows that this is a sought after event from a clubs perspective.

So overall, the financial side of the Pro Tour is generally under control. Clubs make an earn and IKD does not lose too much and everyone is happy….except Ipswich it seems.

Now to the Ipswich Kart Club letter specifically.

I did not provide an “inaccurate summary” of the events as stated by Ipswich in their letter. The letter from Ipswich says it perfectly, it was a “summary”. Nothing I wrote was inaccurate. Hence why I was happy to put it in writing for all to see
Ipswich complain that I place all the blame on Ipswich for cancelling the event. Sure, the final decision to move the event was taken by me but it was due totally to what Ipswich did. I did not change my mind or decide I wanted to cancel the event, it was the last thing I wanted to do but I had to do it because of what Ipswich did…not really all that hard to work out and everyone seems to have worked it out except for Ipswich
Ipswich’s calculations where they say they will make $5,000 are flawed in many areas. It was based on 90 entries, so far this year our average entries is around 135. There is a $6,300 black hole in the figures straight away (45 x $140). Admittedly, no one knows exactly what the entries would have been for this event but like any race meeting the club has to accept some element of risk that people will show up
In the expense breakdown, Ipswich have a permit fee of $1,100 and they quite cleverly write in brackets that this figure is “based on last event”. Well the last event we ran with Ipswich was a National Title and the AKA permit fee is higher for that event. The Pro Tour permit fee is no different from that of a normal club day.
The new proposed arrangements from Ipswich included a track cleanup fee of $1,000 that we would have been paying, this is another area where I objected
There is no mention of canteen profit in the expenses, an area where clubs usually do very well over a Pro Tour weekend. Ipswich did tell me that the canteen was leased out to another party so maybe they only collect some rent from the canteen etc but there is no mention of this in the breakdown
Ipswich wrote in their letter that “from the outset” they had many questions about our guidelines. No questions were put to IKD despite the fact that they had the guidelines since September last year
Ipswich openly declare that they put the documents aside for later scrutiny. This is clearly unprofessional and where it all started to go wrong. If they had an issue with it they should have let us know before they went ahead and sourced a date etc and led us to believe all was OK. Waiting till the last minute and then totally changing the financial arrangements is the real issue here and they openly admit that this is precisely what they did…yet it is IKD’s fault that the event has been cancelled.
Ipswich claim they were willing to negotiate. I told them their offer was unacceptable and was told that the decision was firm. Who was playing hard ball here? The company that put guidelines in place last year or the entity trying to negotiate substantially more money for themselves at the last minute? I think the answer is clear. I then advised Richard in the telephone call that we would have to make karters fully aware of the circumstances leading up to this decision and I went as far as telling him that I suspected that the club would not come out of this looking too rosy so they really cannot say they were not warned

It is not normal for me to get involved in a public slanging match with a club. Clubs and their officialdom are a much needed aspect of our sport and at each and every Pro Tour event I publicly thank the club and its members for their help. I also firmly believe that as a sport we are not appreciative enough of the efforts that go on behind the scenes to run a race meeting. However, this set of circumstances is far different to anything I have come across ever before. I am glad that IKD has received overwhelming support on this matter via phone, email and on forums such as Kartbook and I think this speaks volumes about the overall situation and the root cause of the issue and blame.

I have said enough now and I will not be writing any more about this situation because we have moved on to organizing the event at Warwick and I am glad we have.

Lastly as a side issue, when I returned Richards call last week (sorry I am still unaware of his surname) I was told he was now the President of the Club. Only the day before on the telephone with Andrea McKay I was told there was no President. Now, in the letter from Ipswich Kart Club they refer to this person as the Treasurer. Now it really does not matter to me one bit what his title is but there seems to be some confusion within the ranks as to what his title actually is. This maybe something that an Ipswich Kart Club member may want to ask about in the upcoming general meeting.

Best regards,
Ian Black
Managing Director

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	The Pro Tour / Ipswich Saga The underlying reason(s) for the next event on the 2011 Rotax Pro Tour moving from Ipswich to Warwick next month are a hot topic in the discussion forum on Kartbook at the moment (read the thread HERE). A communication from the Ipswich Kart Club to its membership is now in the public domain (and on the club's website), and is thus published below. A response from IKD Managing Director Ian Black is below that. Communication from Ipswich Kart Club: To all IKC Members We are sure that most if not all of you now know that the proposed round of the Pro Tour which was to be held at Ipswich in July will not go ahead. Instead the promoters (IKD) have decided to move the event to Warwick. We are disappointed that IKD have chosen to release a statement that puts all the blame for the cancellation on the Ipswich club and is an inaccurate summary of the discussions that took place. There are always two sides to every story and below is our side of the story. Firstly, some background information for members who may not be aware of what it actually takes to run the club: The Ipswich club is run as a viable business. Our aim is to make the club the best possible venue for kart racing. To do this takes money – lots of it. Our Membership and Practice fees pay the standard monthly bills – lease, rates, utilities, repairs and maintenance etc. Race meetings are a source of income which we need to make any improvements to the facility. Our club meetings provide on average over $8,000.00 clear ex tax profit per meeting. Hosted meetings, where we hire out the track to external organisations and help organise the event, are an opportunity to raise the profile of the club and make extra income to fast track some of the projects to improve the facility. Hosted meetings require an enormous effort from the club as these are normally run over two or more days and require extra work not normally done at club meetings. Therefore we would expect that such meetings should be more profitable than a single-day club meeting. To date this year we have hosted CIK, Pro-Kart and Supercheap Series rounds. CIK provided a healthy profit for the club whereas the Pro-Kart meeting was run at a loss and the Supercheap meeting provided only a quarter of our normal club meeting profit. Now to the Pro Tour event. IKD established event guidelines and provided these to the Club (these guidelines can be made available to any club member if requested). From the outset we had many questions as the guidelines seemed to stipulate everything that the club must do and things that IKD may do. We were definitely not in agreement with the financial arrangement, which stipulated that IKD would take $60 per entry from the $200 entry fee and the club was to foot most of the expenses for the meeting. At that early stage we put the documents aside for later scrutiny and discussion as the event was in July and we had 8 meetings to plan and arrange before that, including the CIK event. After the conclusion of the Supercheap Series round a few weeks ago we turned our attention to the Pro Tour round. The Committee decided that the $60 fee per entry and having to pay most of the expenses was too much. A $40 fee per entry was considered more realistic. After crunching the numbers we found that the profit could be as low as $5,000 depending on the number of entries. Whilst such a figure might be acceptable to some clubs, at Ipswich that would be close to a loss, given that the track would be closed for normal practice the whole weekend. The treasurer then put forward the idea of charging a fixed track hire fee for the event instead of the profit sharing model put forward by IKD. That would give the club certainty regarding the income. The onus would be on IKD to promote the event well and, if they had a large number of entries, they could well make more than the $60 fee they were asking for. A letter was sent off to IKD with an income and expenditure spreadsheet showing that, under IKD’s terms the club would not be making a reasonable profit on the event. The letter stated further that we preferred a straight track hire fee for the 3 days required for the event, plus the extra day we would need to close the track for practice. The fee would be $10,000 including GST. We felt that was a reasonable charge, given our club meetings are generating $8,000 profit ex tax for one day’s effort. IKD would also need to cover all the expenses for the meeting. IKD responded to the Secretary by phone saying that they would not agree to those terms. The treasurer called Mr Ian Black of IKD to discuss the matter further. He said that the club stood ready to run the meeting but that the financial arrangement was not acceptable. The treasurer asked Mr Black whether he could suggest another figure that might be acceptable but Mr Black was adamant that we accept their terms or the event would not be run at Ipswich. At this point there was a stalemate. The club could not accept their terms and they would not accept ours or suggest an alternative. The Treasurer then asked Mr Black to formally respond to the letter. Mr Black responded that the meeting would not be held at Ipswich. This is the full and true story. The important things to note are that we did not cancel the meeting. IKD did. We were willing to negotiate. IKD was not. So unfortunately there will be no Pro Tour round at Ipswich this year. The Committee sincerely apologises for the inconvenience to Rotax competitors. We wish Warwick well for the event and we hope that next time IKD will come to the table prepared to negotiate rather than assume their terms will automatically be acceptable to the club. Andrea McKay IKC Secretary Communication from IKD: Hello again, I would like to respond to the letter sent by Ipswich Kart Club….I am not even sure where I should start. The overall financial side of the Pro Tour is the following: Entry fee is $200. Club gets $140 and IKD gets $60 IKD spends more than we get on promoting and running the Pro Tour. We spend the money in the following areas:- IKD pays for Graeme and Jeanette Monds to attend each and every event. Graeme is our series Clerk of Course and we pay for his airfares, accommodation, car hire etc in full. We do this so that we have a consistent Clerk of the Course and he does a great job too. Trophies, IKD usually spends around $4000 on trophies at each event (host club pays $2000 and IKD pays the difference) Grid Girls etc…paid by IKD in full Commentator and Media Duties (Ian Salvestrin/Matt Payne) we pay for their services, air fares, car hire, accommodation, food etc IKD has 3 or 4 staff at every event to assist the host club in many areas. These people are paid and also have to be fed and accommodated. The track dress up for example takes 2 people most of Thursday alone. Samantha Coghlan works at IKD on average 3 days per week. It is hard to tell exactly but I would guess 70-80% of her time is taken up with the Pro Tour. Preparing Supplementary Regulations, arranging Flights, accommodation, communicating with clubs and competitors, ordering trophies, arranging Grid Girls, organizing prizes or social events, designing & organizing series T-Shirt, organizing dates with host clubs for next year, updating the Rotax website, managing the Rotax Rankings, updating all the Pro Tour documentation, Facebook, Twitter etc etc. Any special events that we have done are also all paid in full by IKD. These have included free BBQ’s and dinners, magician, comedian, singers, sports psychologist, Jason Richards dinner evening etc. IKD also gives away prizes at each event. IKD has invested $3,000 into a tyre sniffer and about $3,500 into software and bar code scanners etc so that we can help police tyres at each and every event IKD has invested $4500 on custom made software to facilitate the Rotax Rankings to ensure their integrity and longevity IKD has invested $2000 on a special printer to print bar coded registration cards so that we can fully utilize the scanning equipment we have invested in $10 from the $60 IKD receives will go to the drivers who attend the Rotax Grand Finals in Dubai The list goes on and on FACT…IKD spends far more than we get from the event. Sure, we do this to promote Rotax and it provides racing for Rotax which generates tyre sales etc but our $60 (really only around $55 once GST is accounted for) does not even come close to what we spend on the Pro Tour. So when we already do our fair share and a club attempts to get more at the last minute I have an issue with it. Now to the clubs side, essentially clubs take care of the normal expenses of running the event. Like they do at any event they run BUT in this case they get $140 per head which is quite good money. Is it enough money??? Well, generally speaking clubs are fighting for events. Clubs like Todd Rd, Geelong, Dubbo, Port Macquarie and Canberra have all hosted events and have all indicated that it was a financial success for the club and they want the event again. I have even had a club report a profit of $25,000 for the event and I think that is great. I think $15,000 profit would be a minimum and $20,000 is probably about the average a club would make. The more the better for the club because facilities need to be upgraded and maintained. Coolola, Toowoomba and Warwick were all prepared to take this event once Ipswich was cancelled which shows that this is a sought after event from a clubs perspective. So overall, the financial side of the Pro Tour is generally under control. Clubs make an earn and IKD does not lose too much and everyone is happy….except Ipswich it seems. Now to the Ipswich Kart Club letter specifically. I did not provide an “inaccurate summary” of the events as stated by Ipswich in their letter. The letter from Ipswich says it perfectly, it was a “summary”. Nothing I wrote was inaccurate. Hence why I was happy to put it in writing for all to see Ipswich complain that I place all the blame on Ipswich for cancelling the event. Sure, the final decision to move the event was taken by me but it was due totally to what Ipswich did. I did not change my mind or decide I wanted to cancel the event, it was the last thing I wanted to do but I had to do it because of what Ipswich did…not really all that hard to work out and everyone seems to have worked it out except for Ipswich Ipswich’s calculations where they say they will make $5,000 are flawed in many areas. It was based on 90 entries, so far this year our average entries is around 135. There is a $6,300 black hole in the figures straight away (45 x $140). Admittedly, no one knows exactly what the entries would have been for this event but like any race meeting the club has to accept some element of risk that people will show up In the expense breakdown, Ipswich have a permit fee of $1,100 and they quite cleverly write in brackets that this figure is “based on last event”. Well the last event we ran with Ipswich was a National Title and the AKA permit fee is higher for that event. The Pro Tour permit fee is no different from that of a normal club day. The new proposed arrangements from Ipswich included a track cleanup fee of $1,000 that we would have been paying, this is another area where I objected There is no mention of canteen profit in the expenses, an area where clubs usually do very well over a Pro Tour weekend. Ipswich did tell me that the canteen was leased out to another party so maybe they only collect some rent from the canteen etc but there is no mention of this in the breakdown Ipswich wrote in their letter that “from the outset” they had many questions about our guidelines. No questions were put to IKD despite the fact that they had the guidelines since September last year Ipswich openly declare that they put the documents aside for later scrutiny. This is clearly unprofessional and where it all started to go wrong. If they had an issue with it they should have let us know before they went ahead and sourced a date etc and led us to believe all was OK. Waiting till the last minute and then totally changing the financial arrangements is the real issue here and they openly admit that this is precisely what they did…yet it is IKD’s fault that the event has been cancelled. Ipswich claim they were willing to negotiate. I told them their offer was unacceptable and was told that the decision was firm. Who was playing hard ball here? The company that put guidelines in place last year or the entity trying to negotiate substantially more money for themselves at the last minute? I think the answer is clear. I then advised Richard in the telephone call that we would have to make karters fully aware of the circumstances leading up to this decision and I went as far as telling him that I suspected that the club would not come out of this looking too rosy so they really cannot say they were not warned It is not normal for me to get involved in a public slanging match with a club. Clubs and their officialdom are a much needed aspect of our sport and at each and every Pro Tour event I publicly thank the club and its members for their help. I also firmly believe that as a sport we are not appreciative enough of the efforts that go on behind the scenes to run a race meeting. However, this set of circumstances is far different to anything I have come across ever before. I am glad that IKD has received overwhelming support on this matter via phone, email and on forums such as Kartbook and I think this speaks volumes about the overall situation and the root cause of the issue and blame. I have said enough now and I will not be writing any more about this situation because we have moved on to organizing the event at Warwick and I am glad we have. Lastly as a side issue, when I returned Richards call last week (sorry I am still unaware of his surname) I was told he was now the President of the Club. Only the day before on the telephone with Andrea McKay I was told there was no President. Now, in the letter from Ipswich Kart Club they refer to this person as the Treasurer. Now it really does not matter to me one bit what his title is but there seems to be some confusion within the ranks as to what his title actually is. This maybe something that an Ipswich Kart Club member may want to ask about in the upcoming general meeting. Best regards, Ian Black Managing Director Home
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