Keep up with the latest news affecting Delaware’s business community by signing up for our e-newsletter. DOVER – The businesses in Delaware’s capital have come to depend on several large annual events as part of its ...
[caption id="attachment_196777" align="aligncenter" width="2560"]Tens of thousands of fans attended the Monster Energy NASCAR Cup Series Drydene 400 at Dover International Speedway on Oct. 6, 2019, in Dover. | PHOTO COURTESY OF NASCAR/MATT SULLIVAN/GETTY[/caption]
Keep up with the latest news affecting Delaware’s business community by signing up for our e-newsletter.
DOVER – The businesses in Delaware’s capital have come to depend on several large annual events as part of its revenue stream, but they are now anxiously viewing the next few weeks as events are postponed, canceled or in limbo.Dover Mayor Robin Christiansen told Delaware Business Times that after NASCAR postponed its May races at Dover International Speedway and organizers canceled the 88th annual Dover Days Festivals, the city is anxiously awaiting updates on its next major event: the Firefly Music Festival.“Honestly, we’re waiting for the other shoe to fall on that,” Christiansen said, noting that the music festival’s promoter AEG has already been forced to reschedule its Coachella and Stagecoach festivals in California.As mayor of Delaware’s second largest city, Christiansen said that he’s been trying to mitigate the economic impact of the COVID-19 pandemic by obtaining and providing as much information as possible to city businesses.“Certainly at this point in time, we’re up against the wall,” he said. “The city relies on many different things to be successful, but these annual events are a big part of our economy – certainly for our hotels, restaurants and the like.”Christiansen said the decision to cancel the city’s Dover Days Festival, which draws tens of thousands of people to the capital city for a parade, music, games, food and more, was a big blow to its marketing efforts as well as its local economy. The event had been scheduled for May 2, concurrent with the three-day NASCAR race weekend at Dover International Speedway.NASCAR pulled the plug on those races in a March 16 announcement that postponed all races through May 10 – on the other side of the U.S. Centers for Disease Control and Prevention’s eight-week guidance against large crowds to help prevent transmission of the virus.Dover International Speedway President and CEO Mike Tatoian said that he began to get nervous about the May race weekend when NASCAR called off its races in Atlanta on March 13.“Teams were hunkered down in Atlanta getting ready to race when more and more information got to NASCAR about whether to call off the race,” he told DBT. “The acceleration of [the coronavirus-spurred stoppage] in the sports world was just unprecedented.”After the CDC’s eight-week guidance was issued, Tatoian knew that Dover would be in for a difficult year. NASCAR has said that it is aiming to run all of its races, but with races scheduled virtually through November how that is accomplished remains to be seen.“It is literally a puzzle and we have to look at TV network availability and a team’s ability to travel,” Tatoian said. “We have to look at what tracks have lights for night races and which don’t. Dover doesn’t have lights, so it limits when and how we could race.”Tatoian said that he remains optimistic that the postponed races will be made up, noting that NASCAR is discussing every scenario from double-headers with the August race weekend to racing during the Summer Olympic break to mid-week summer races. Also complicating the scheduling is NASCAR’s broadcast rights, with the first half of the season held by FOX and the latter half by NBC.The longer the interruption spurred by COVID-19, the more likely the scenario becomes that the Dover races cannot be made up, especially as all major sports leagues jockey for all-important TV broadcast revenue. Four days after their postponements, NASCAR had yet to release a plan for rescheduling.The economic impact of not holding the spring race in Dover as planned will likely be huge for businesses around the state capital that are already hurting from decreased patronage among the pandemic. Hotels will no longer host racing fans, restaurants and bars will no longer be serving them, and retailers won’t have a weekend of tens of thousands stocking up to camp at the racetrack.Estimates for that impact are hard to pin down, a 2001 study pegged the races’ impact at $94 million annually although a 2019 Delaware Department of Transportation economic impact study on state airports pegged it lower at about $60 million.According to the 2019 annual report for Dover Motorsports Inc., the publicly traded owner of Dover International Speedway, the races made about $4.9 million in admission revenue – that continues a more than decade-long decline as NASCAR deals with falling attendance.Tellingly, Dover International Speedway spent about $1.5 million last year to decrease its seating capacity from 83,000 to 54,000. At its height a decade ago, the racetrack had a capacity of about 135,000.Despite falling attendance, the races’ TV broadcast rights have become more valuable every year, totaling $34.2 million last year. According to the 10-K filing, Dover Motorsports is scheduled for a 4% increase in broadcast rights fees, but if the races cannot be rescheduled it would be a major blow to revenues.
[caption id="attachment_188094" align="alignright" width="392"] Dover officials are waiting for an update on Firefly Music Festival which is scheduled for June. | PHOTO COURTESY OF FIREFLY MUSIC FESTIVAL[/caption]
For now, what’s on the minds of many in Dover is the future of Firefly, scheduled for June 18 to 21. As of Friday, its promoter AEG had not announced any changes to the festival despite postponing all of its event through the end of May.The cancellation of Firefly would be another big blow to the Dover-area, as a 2014 study estimated its economic impact on the region at $68 million.Tatoian, who acts as landlord to Firefly but isn’t responsible for its planning, said that AEG is “kind of are going through the situation right now.”“AEG has a great team that will decide how to best proceed,” he added.Christiansen was among those hoping that Firefly would be a return to normalcy for Dover.“We’re holding our breath that this situation will turn around as soon as possible,” he said.By Jacob Owensjowens@delawarebusinesstimes.com