AirFence Payoff...AFM style

[Mark Bothe]

Not sure how they did it specifically, maybe by rental fee's, but it might be worth asking how they did it and in such short time. I'd be willing to call, but not sure if these types of talks would be better to come from one of our elected officials.

http://www.afmracing.org/webforums/viewtopic.php?t=3049



American Federation of Motorcyclists (AFM) President Kevin Smith presents a check for $70,000 to Jere Starks and Sara Grafals of Infineon Raceway. The check ceremony represented the full payment, 18 months early, of the loan Infineon Raceway lent to the AFM for the Airfence project.

The AFM had ordered 92 modules in October 2005 with the final cost being $83,280 including a transport trailer. Roadracing World purchased an additional 10 modules to the 92 ordered bringing the total to 102 sections. Infineon Raceway in December 2005 provided the AFM a loan of $70K that would be combined with donations already received by the AFM so the entire amount could be purchased up front. Infineon Raceway also agreed to provide storage and deployment at no cost to the AFM through 2008.

Material was delivered in February 2006 and assembled in March 2006 by a host of volunteers from all over Northern California in time for a manufacturer's test day for AMA teams. Mat Mladin took a tour of the track before the start of testing and provided input on recommended locations for the Airfence. The Airfence has been used for every motorcycle race and AMA test day since. The entire allotment is now available for rental by track day providers at Infineon, which has been a popular trend for 2007.

AFM President, Kevin Smith said, "I never doubted that our racers would support fundraising for the Airfence. Being it was the biggest debt our small club had ever taken on, we thought it would take the entire three years to pay it off. Repaying the loan in half that time says a lot about our club and the local motorcycle community. John Ulrich kicked things off with his donation from the Roadracing World Action Fund and we've been absolutely overwhelmed at the support we've seen since then. We've reached a significant milestone, but there's still more to do and as the fundraising continues, the goal will be to add even more protection."

[Tyson Silva]

The owners of Infineon helped the AFM purchase the needed airfence (as it states, the track carried the loan). Infineon (very much unlike PIR) has a staff that deploys the airfence. PIR is VERY VERY different in this aspect than most other major (even some minor) tracks throughout the US. Other tracks set up and tear down. Alot of this was after the Vincent crash, that spurned the track toward greater safety inprovements (probably the most proactive old track around).

OMRRA should consider renting out the airfence (set up included) as a revenue stream to offset the cost. CT doesnt, but I'm pretty sure the PSSR rents flags and supplies from OMRRA for their events. You'd have to check on the amounts received back to OMRRA, but it definitely could help the club out financially. I did receive a rental breakdown from OMRRA a few years back, but decided to purchase my own stuff. OMRRA would have to be careful on how much it charges, since might just be cheaper for others to purchase their own stuff or small sections of air fence for their events.

[Sage Wilkinson]

I'm sure having 1400+ riders showing up for a AFM/Infineon race helps cash flow a bit, me & a few guys went down in 2004 to race and about 200 riders were on stand by waiting to race

[Mark Bothe]

Let's see....1400 riders times $50 equals $70,000. There you go, Bob!

and then for some more math. 300 riders divided by $70,000 equals $233.

[Rob Burch]

We have rented it to PSSR at least once. The rental numbers will be posted for nexts year safety program manual.

[Simon Smith]

Remember that OMRRA used to pay rental (and setup) for the old crash protection. The new stuff is a single lump payment of approximately 2 years rental fees. So, whether you want to call it "paying for the airfence" or not, by the end of next year the purchased stuff will start having a significant positive impact on the clubs finances. And, we got more protection to boot. Making setup/teardown smoother is the only challenge.

Money good!

Simon

[Mark Bothe]

I have no problems with the product or the money. I'm more curious as to how AFM was able to pay-down and pay-off their debt 18 months earlier than they had anticipated. If OMRRA was able to implement some or all of their techniques, then an earlier payoff would be doubly beneficial for the club by not having to pay interest on the loan. I also wonder if Infineon levied a finance charge to the club? or if it was 0% note that had to be paid back within a specified timeframe?

[Tyson Silva]

.... If OMRRA was able to implement some or all of their techniques, then an earlier payoff would be doubly beneficial for the club by not having to pay interest on the loan. ...

There is a proposal to the board that might have a positive impact like that :D

[Tyson Silva]

Remember that OMRRA used to pay rental (and setup) for the old crash protection. The new stuff is a single lump payment of approximately 2 years rental fees. So, whether you want to call it "paying for the airfence" or not, by the end of next year the purchased stuff will start having a significant positive impact on the clubs finances. And, we got more protection to boot. Making setup/teardown smoother is the only challenge.

Money good!

Simon

Yep, I agree that it is better to own than rent. It is also very very nice to just show up (as a club) and have the "safety" gear already deployed. There are lots of tracks that have staff to handle this. Unfortunately, PIR isnt one of them.

[Brad Gorman]

Well I know of at least 6 bails that were largely paid for by people going out and getting advertisements. This in its self should have allowed us to pay them off 6mo early. Unfortunately I have not seen any #'s that show that. All you really need to do is go out and get more companies to see the value to us and them. I wish you the best of luck finding people to go out and talk to them... The rental would also help out with this.

[Brian Moe]

Please be careful in perpetuating the idea that $ sponsorships is $ for $'s pay off. $500 sponsorship does not equate to $500 net to the club to pay things off 'early'.

YES sponsorships did go up...however those sponsorship obligations have a cost...that get charged to the promotions budget. i.e. you've got to spend money to make money.

Just keep that in mind when pushing sponsorships and discussing that as net benefit to the club. Don't get me wrong sponsorships are a good thing...just want everyone to understand that its the NET...not the GROSS that helps us.

I believe the board has offered up that anyone interested in the clubs finances can ask those questions and I'm OK to walk you through what the Finance Committee has looked at/looking at.

[Nico Tomacelli]

I'd encourage you guys to rent out the airfence. We do it @ WMRRA with great success.

[Brad Gorman]

Please be careful in perpetuating the idea that $ sponsorships is $ for $'s pay off. $500 sponsorship does not equate to $500 net to the club to pay things off 'early'.

YES sponsorships did go up...however those sponsorship obligations have a cost...that get charged to the promotions budget. i.e. you've got to spend money to make money.

Just keep that in mind when pushing sponsorships and discussing that as net benefit to the club. Don't get me wrong sponsorships are a good thing...just want everyone to understand that its the NET...not the GROSS that helps us.

I believe the board has offered up that anyone interested in the clubs finances can ask those questions and I'm OK to walk you through what the Finance Committee has looked at/looking at.

I am not talking about sponsorship, I am talking about the advertising campaign that I set up and ran with the expressed idea that all funds would go to paying for the air fence. (this is how the price structure was derived by me) I have repeatedly requested information on the amount of funds we have received as a result of air fence donations and air fence advertising and have yet to get any good #'s. I did how ever receive allot of information on sponsorship and who has paid what but that does not help. I have also repeatedly requested that we have a completely separate account for air fence (donations and advertising) so that this can be tracked properly but again NOTHING. So feel free to walk me thru were the funds are, how much they are, were they have come from, how much of them have been used specifically for air fence, and how much is left. Don't forget to add in the amount that was taken from the injured riders fund and the amount that omrra would have normally paid with out them. Thanks for your time I'm out.


Edit:
and no I won't bee at the meeting. I am tired of banging my head against the wall, it is really starting to hurt.

[Brian Moe]

I am not talking about sponsorship, I am talking about the advertising campaign that I set up and ran with the expressed idea that all funds would go to paying for the air fence. (this is how the price structure was derived by me) I have repeatedly requested information on the amount of funds we have received as a result of air fence donations and air fence advertising and have yet to get any good #'s. I did how ever receive allot of information on sponsorship and who has paid what but that does not help. I have also repeatedly requested that we have a completely separate account for air fence (donations and advertising) so that this can be tracked properly but again NOTHING. So feel free to walk me thru were the funds are, how much they are, were they have come from, how much of them have been used specifically for air fence, and how much is left. Don't forget to add in the amount that was taken from the injured riders fund and the amount that omrra would have normally paid with out them. Thanks for your time I'm out.

Brad
Send me the list you have and I'll reconcile it. All I see is the gross $ entries in and out. But keep in mind...you call it advertising...I call it sponsorship. It is those $'s that I'm specifically mentioning that is not $ for $. Donations are something different. The reason for my comment was around numerous people saying that we've gotten X $'s in airfence sponsorship (adverstising)...so the same X $'s should be used to pay down the airfence implying there really is no cost impacting the OMRRA budget. In reality advertising income has gone up...but the budget for promotions cost was over budget by May.

Additionally please clarify when you say "....the amount that omrra would have normally paid with out them." There is another misconception that there is immediate $'s available to pay off the air fence since we aren't renting anymore. i.e. someone once said to me something to the effect that 'we should be able to pay off the air fence early since we aren't paying $17K for the rental'....partially true, but in reality we've converted a variable rental charge to a fixed loan payment. So this year its really about break even. ~$12K in loan payments...rental would have been about ~$12K (5 races). ($17K for 7 races). i.e. there is some expectation that we somehow have $5K ($17K vs. $12K) extra to pay off the airfence with. Completely not true.

The finance committee has been looking mainly looking at the $'s required to keep OMRRA cash positive in total for the next 2~3 years.

But I should have the data to outline what it is you're looking for. HOWEVER I do NOT have any authority to create accounts and transfer money from one place to another. For that you need to talk to Frank who is the elected treasurer.

[Justin Watkins]

I tried to stay out of this, as my opinion is apparently venom to this club. BUT Brad is 99% correct. The airfence advertising should be paying for airfence and airfence only. All of the money received by OMRRA for airfence advertising should be going toward airfence minus the cost of the graphics that we purchased to install on them. So correct, its not $ for $ but very close.

So Say we made $6k from airfence advertising, we probably spent around $500-$1000 give or take on the logos. The graphics should be the ONLY expense out of that money. If the money was spent on anything else, then there is a problem that needs to be addressed.

[Brian Moe]

I tried to stay out of this, as my opinion is apparently venom to this club. BUT Brad is 99% correct. The airfence advertising should be paying for airfence and airfence only. All of the money received by OMRRA for airfence advertising should be going toward airfence minus the cost of the graphics that we purchased to install on them. So correct, its not $ for $ but very close.

So Say we made $6k from airfence advertising, we probably spent around $500-$1000 give or take on the logos. The graphics should be the ONLY expense out of that money. If the money was spent on anything else, then there is a problem that needs to be addressed.

So was there anything in my post that contradicts what you just outlined? Keeping in mind the original post mentioned nothing of this which is why I brought it up? Again forums are a great way to perpetuate mis understandings as I've had people question me on this...'close' can be relative....$1K might not be so 'close' to some people. And in fact in some cases it was a genuine surprise to people that it was not $ for $.

[Justin Watkins]

Sorry if it didn't come across clear. I wasn't saying you were wrong, I was just stating that Brad was mostly correct with the clarification on the graphics part so that others knew. It may seem obvious to the three of us as we were involved in it, to others though, as you stated, it may not have been clear.

Thanks

[Janice Logan]

I did do a quick accounting today off all the money RECEIVED for stuff such as sponsorships, money specificially for air fence advertising, etc. This is, of course, a gross amount, and I don't know how much we spent on the advertising stickers, etc. Email me off line - it's an Excel spreadsheet so can't be posted here in any sense of order, and I'm happy to forward it to anyone.

Janice