What impact will the world-wide economic downturn have on Grand Prix motocross racing in 2009? With the motorsport community harshly affected by budget sheets, sales figures, currencies and stock quantity, we took a look at the current state of Grand Prix motocross with exclusive words from the head of the major manufacturers, the FIM, promoters Youthstream and some important names from within the paddock to see if the already over-worn adjective of “crisis” can actually be applied to the world championship.Within the global motorsport industry costs are being slashed. Manufacturer’s priorities now have less to do with titles and more to do with clearing the stock room of unsold units, fighting falling profits through currency craziness and the coping with the fallout of consumer prudency — all by spending the least possible on racing. The big question is: How will this affect world championship motocross?For all the saving to rescue millions wiped off company books through a lofty Yen, grey imports and a suicidal dollar, will the average race fan notice much of a difference? All indications are that 2009 will be “business as usual” — at least for the first part of the season — but a shallow carve to the skin reveals brands attempting to shave budget wherever possible and teams are being affected by this as well as potentially reduced support from sponsors and technical partners.
Despite the growing popularity of motocross, the strong Yen and the weak dollar took a toll on the profits of Japanese manufacturers in 2008.
Numbers…So why all the feverish expenditure hacking? Well, the statistics do not make for pretty reading.Total production of motorcycles in Japan has now reached its lowest point since 1962. From January to June this year just over half a million motorcycles were made in Japan, a drastic drop of more than 30% compared to 2007. More crucially, Japan, the second largest economy in the world and the biggest in Asia, has seen the Yen reach its highest mark in almost 15 years. As of late December analysts were predicting more gloom for the market until the beginning of 2010.There are too many unsold bikes, little profit and a harsh roll-over of consequence that deals a sour lick to the racing community — the proverbial “shop window” for products. The gravity of the situation is almost unquantifiable concerning Japanese brands. In the past, shortfalls in some markets could be made up with good sales in other areas but with the turmoil now on a global scale, sources inside some factories believe that whole racing programs are under review and under threat.The Yen may be one of the factors crippling the Japanese but in Europe the scene is not much rosier. KTM in November predicted a 10% decrease in production for 2008/9. In the same report it is stated that their EBIT (Earnings Before Interest and Tax) was down almost 50% despite only a 7% drop in sales; the dollar exchange rate undoing any good work.The shape of the 2009 motocross world championship was largely cemented before the impact of the 2008 motorcycle sales season had struck. Firms are trying to see where they can save now, but for the most part, ’09 racing programs are already in place.”As the problems generally started after the sales season, the big hit will come,” said Laurens KleinKoerkamp, Racing Division Manager of Yamaha Motor Europe. “With the negative development of the Yen/Euro exchange, all Japanese manufacturers are hit extra hard.””It is hard to say what will happen, we all understand the effect of this crisis will be longer than one year. We will have to experience and learn the behavior of the global consumer,” admits 2007 world champs and factory Teka Team Suzuki owner Sylvain Geboers.”The problem is that we don’t know where the whole world will be in a couple of months and I think nobody can give a long term guarantee at this moment,” comments KTM Off-road Sport Director Pit Beirer. “Motocross is practically the show case for KTM’s ‘ready to race’ products. Even if we are also facing difficult moments in the market, we have not reduced dramatically our motocross budget.”
In the capable hands of Youthstream, the World Motocross Championship has grown steadily in both attendance and television viewership.
The World Championship…Since Youthstream assumed control of the world championship in 2004 and created the MX1 and MX2 classes, their efforts with the facelift of the sport have been undeniably positive. Their statistics unsurprisingly show a rise of TV and circuit spectators. In 2004, the championship was viewed by 330 million thanks to 204 hours of live TV coverage and 307,800 people through the turnstiles. In 2008 the figures rose to 848 million via the “box” and 1200 hours of coverage with 461,500 coming to the tracks.”I think we have a lot to offer the outside world,” Factory Yamaha rider and one of the older and more respected racers in MX1, Josh Coppins, commented. “Sure, we are not Formula 1 but we don’t pretend to be and nor do we cost the same for investors. It’s obvious that the world is in difficult times, financially, right now, but value for money I think we offer good coverage and at the same time great racing.”Youthstream claims more than 50% of Grand Prix events now have government backing and at the heart of the paddock is presence from almost ten manufacturers. The pervading question for the future and the credibility of this championship concerns the depth of commitment by the Japanese that supply a large majority of the motorcycles — works and supported — in the gate, especially in the premier MX1 category.”The manufacturers need our sport to promote their brands and develop their products; they might decrease their budget but they will be present,” says Youthstream President Giuseppe Luongo, an Italian with now more than 25 years promoting motocross races.. “We have the starting grid full and very long waiting lists for every championship.”
Youthstream imposing a 10,000 Euro per rider fee has added to the financial stress upon riders and teams in the MXGP paddock.
Staying in the paddock…Youthstream took new steps midway through 2008, before the crunch took a heavy landing in their attempt to lift the championship to the next level. The teams would face 10,000 euro fees per rider and see the exclusion of funding for the overseas races. In return, guaranteed TV time that can be used to source sponsors and improved infrastructure at the tracks with refined paddocks and a new double-tiered pitlane, are compensation. The demands on the teams were already controversial in some quarters but now hit home extra hard.”I didn’t understand it,” says Guttridge. “Why increase the price to attend in a time when all teams, even factory-based, would struggle to meet the criteria?””It is unfair because the athlete has to pay to perform and attract the public. How can we motivate the parents permitting their children to race motocross?” commented Geboers.”We could not believe it,” adds Kleinkoerkamp.”We were astonished!” says Resta. “It seemed a counterproductive choice.””I was a little nervous about this because as a rider I could see tough times were coming,” Coppins confesses. “I was, and still am, worried that good teams will go and not be replaced by other good teams. I understand what Youthstream are trying to do but unfortunately it didn’t come at the best time. I am nervous we will not fill the start-line at many races and the last 10 riders will be below average.””I think that Youthstream is a very competent promoter with many years of experience and have taken the sport in a very positive direction,” says International Motocross Press Association President, Ray Archer. “But I hope that they are equally able to adapt quickly to market forces such as this worldwide recession.”Whether the teams should be receiving more help for providing the “cast” is perhaps the most hotly debated subject in the paddock, especially now.”I think the teams should be getting a certain contribution for making the show and providing the actors for it,” believes KleinKoerkamp. “A top team has to pay between 16,000 to 22,000 euros per overseas event for equipment transportation, flights etc. In general this had already caused big concern but with the economical state now from the last few months the budget situation has become critical.””Ferrari president Luca di Montezemolo recently said that there is no other professional sport in the world where the players get less than 50% of the cake when he was talking about Formula One and the control issues in their sport — he should have a good look at motocross,” says Harvey.”Grand Prix events are already on a very high level; they just need fine tuning in every department with special attention to the details,” says Luongo by way of justification. “Our work is not to assist teams or others; it is to create the solid base and the tools for everyone to grow with and it would be a big mistake to ‘assist.’ The strong ones, the serious ones, the workers and the professional ones will survive and they will become stronger after the crisis. The others will disappear, but this is the law of our world. You will see that after this period the professional teams will become stronger.”
Giuseppe Luongo defends Youthstream’s structuring of Grand Prix events and says that “the strong and serious will survive and become stronger.”
What next?To make racing cheaper, application of a new set of rules could be made. Formula One and MotoGP are already adopting this course of action, and there is a real chance that motocross could follow suit with production-based status; an idea that was already being bandied around by the FIM mid-season in 2008 and is another paddock-splitting topic.”FIM and Youthstream are ready and prepared,” said FIM CMS President Dr Wolfgang Srb “I have asked the manufacturers in the latest meeting of the Motocross Strategic Committee last September about their position on this issue. They all have said that they want to continue with prototypes, but without an escalation of costs due to the use of electronics (traction control, etc). We have scheduled the next meeting for February; let’s see their position then.””This is delicate as it mainly concerns the FIM,” said Luongo. “Sure the costs of a ‘true’ standard machine can be better for the participants and would sensibly reduce the costs for the teams, but I’m not sure the bike manufacturers, accessory manufacturers or the suspension factories see it in the same way.”And he would be right.”This would eliminate the involvement of manufacturers and in that case, the AMA championship is sufficient, there is no need for an extra championship,” stresses Geboers.”I don’t think that’s happening,” commented Guttridge. “It doesn’t make sense for our development program. It would reduce our reason to go racing at the top level. Part of the excitement to visit the GPs and see the exclusive factory machinery.””I believe that a factory bike brings a big contribution to the series in terms of prestige and interest of the spectators,” adds Resta. “Of course the costs go up but it is in the spirit of the competition to use the best technology available.””This would be a shame,” believes Coppins “a lot of our spectators come to see the factory bikes as well as good racing, they don”t want to come and look at the bike they can buy in their local shop! Also my job as a rider is to try and win and develop a better bike for Yamaha. I can do this by using factory parts and giving feedback, but if we ride production bikes it limits my job a little.”Only KTM –who like Honda are full-speed ahead with plans for a Zero Emission motorcycle – seem warm to the plan. “Why not!” says Beirer. “It would not change the racing and the public would see the same show on the track. It would save money and we are open to discuss this point.”
The seasons ahead will not be easy, but everyone wants to work hard to ensure a healthy future for World Motocross GP.
The Future?It is hard to draw any summaries. Depending on the philosophy and attitude of different parties the coming years either look murky or represent something of a challenge. However everyone seems to agree that the seasons ahead will not be easy.”I think the target for the next two years must be to keep the sport on the already good level,” says Beirer. “I think that with the Under 23 rule coming in 2010 for MX2, MX1 will stamp its mark as a premier class again,” says Guttridge. “Factory rides will become more important and TV focus will be on those factory stars so I have no fears regarding “top level” status….it’s the level below that I’m worried about.””Many team owners and team staff are passionate about motocross and they will enter the championship because it is what they want to do; it is their life,” claims KleinKoerkamp. “I am worried that good level teams and riders will not be able to afford to enter all rounds and there will be financial troubles. This affects the sporting principle behind the championship of having the best riders fighting for points at every race.””The FIM has a huge task to fulfill,” says Geboers. “They need to make rules for world-wide noise control, and they have to keep the sport attractive for the riders, teams and manufacturers. Five years from now we will be racing with quiet bikes and hopefully all teams may have strong sponsors.””My fear is that average riders will buy their way in to Grand Prix and riders without the money will not make it, even if they are better; some will miss the boat,” says Coppins. “The good ones will always rise up but to make a good race we need depth.””I am not afraid of the future,” claims Srb. “The Motocross World Championship was, is and will always be the number one MX series of the world with the best riders, tracks and organizers.””If serious danger is near Youthstream will take the necessary steps to preserve the value of the FIM Motocross World Championship,” asserts Luongo. “In my 25 years in Motocross I have seen good moments and difficult moments, and frankly my answer is the same as always; we have to dream, believe and work hard. Why have many other promoters who have tried to do my job failed? It’s because they want to make lots of money and fast. It doesn’t work like that. You have to believe, and you have to be ready to go over the many difficult times which will undoubtedly fall upon you.””I hope this crisis will not kill what was built up with hard work over years,” affirms Beirer. “A crisis can also be a chance — never give up.”