Article by Bill Shea - Crain's Detroit Business
Backers of the annual hydrofest race on the Detroit River are reorganizing the event and its sponsorship structure as it seeks a new corporate underwriter.
The Detroit-based UAW-GM Center for Human Resources has ended its title sponsorship of the APBA Gold Cup hydroplane boat race after two years, and at least three companies are interested in replacing it, said Mark Weber, president of the race organizer Detroit Riverfront Events Inc.
Plans for the 2017 event, scheduled for Aug. 26-27, are to split the weekend into two separate races instead of one race over two days, Weber said.
Additionally, sponsorship costs are being reduced, he said.
The title sponsorship for the Gold Cup race is pegged at $150,000 and the new second race is $100,000, Weber said. Those amounts buy tickets, branding, hospitality and the usual title sponsor perks found at sporting events. There also are smaller sponsorship levels at $25,000 and $50,000. Some hospitality packages are priced at $7,500 and $14,000, and Weber said companies such as automotive suppliers — which don't typically market to the general public — can use such packages to entertain clients and reward employees.
"That's another way to get ROI for your support. There are many ways to participate," Weber said.
He's confident a sponsor will be in place to cover costs, and his goal is to release the name and details in late March or early April. Ticket prices will be set then.
"We have companies that have shown interest," Weber said. "We will not run the event if we don't have the proper funding to take care of all the financial responsibilities."
Weber declined to name the companies because they're still in talks.
Last year, lower-tier sponsors Ally Financial Inc., ITC Holdings Corp., the Detroit Yacht Cluband Pure Michigan covered about two-thirds of the race costs. Weber said some of those sponsors are committed for 2017, but declined to name them yet.
It costs about $600,000 to stage the race weekend, and Weber said he doesn't expect that to change after the reorganization.
"Our costs and our overhead won't change. We have really leaned this thing out. We're extremely efficient. I credit that to our 300 volunteers," he said.
The race previously cost about $1 million to run, but has lost $100,000 to $150,000 a year.
Past sponsors included Chrysler Jeep Superstores, which ended its run in 2010. The race was without a main corporate sponsor until the UAW-GM last year.
The race, which dates to 1916 and is a 2.5-mile river course for boats that reach 200 mph, has cycled through lead sponsors and organizers over the years while struggling with financing. The UAW-GM organization signed a two-year deal with an option for a third year, Weber said, and it declined to exercise the option.
"We've had a great relationship with them," Weber said.
Ken Been, communications manager for the UAW-GM Center for Human Resources, said his organization was ready to let a traditional sponsor take over the race.
"We were very happy to provide the seed money for the last two years simply because we did not want to see this great tradition on the Detroit river become a thing of the past," he said. "It’s time for us to back away and allow others to pick up with that excitement."
The event drew about 45,000 for three days of qualifying and racing last year.
The decision to reorganize the Detroit race weekend stems from an evolution in the industry and the public's tastes, Weber said. Years ago, it drew hundreds of thousands along the river to watch.
"Motorsports have changed, the level of corporate sponsorship has changed. It's less than it was five years ago," he said. "We're trying to look at this event and think outside the box. Going to an event that takes two days is kind of archaic."
Details are still being worked out to split the race weekend into separate races, which will include their own trophies, award ceremonies, driver points, etc.
"We want to make both races very significant on the tour," Weber said. The Detroit race weekend is part of the H1 Unlimited tour backed by the American Power Boat Association.
The nonprofit Detroit River Regatta Association organized the Gold Cup race from 1990 until 2014, after which it collapsed from lack of money and debt. It wasn't held in 1928 and 1960 because of bad weather, and from 1942-1945 because of World War II.