Department of Economic Development completes analysis of MGP Festival costs

Department of Economic Development completes analysis of MGP Festival costs - Printable Version

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Department of Economic Development completes analysis of MGP Festival costs - Malcolm - 08-02-2012

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Department of Economic Development completes analysis of Manx Grand Prix Festival costs - Economic Development Press Release

The Department of Economic Development has undertaken a detailed analysis of the costs directly associated with running the Manx Grand Prix Festival and the return on the investment that the event delivers.

The comprehensive analysis includes the direct costs required by the Manx Motor Cycle Club, the Vintage Motor Cycle Club and the Classic and Two Day Trials Clubs. It does not include indirect costs such as Government salaries for those who work on the event or any shared costs that can also be attributed to the TT Races, such as course set up costs or marshals’ equipment. Neither does the study take into account any negative effect of the road closures on businesses operating within the course or the impact on businesses during the event.

The exercise is part of an ongoing review by the Department into the event that also includes a series of focus groups and an on-line survey to generate further feedback and opinions.

The analysis has confirmed that the cost of running the Manx Grand Prix Festival to the Department of Economic Development was £815,027 in 2010. This includes the direct contributions to the Manx Motor Cycle Club, the VMCC and the Classic and Two Day Trial Clubs, and the contributions to the clubs are based on approved budgets. These cover the costs of insurance, medical cover, awards, and administrative costs, and are net of entry fees charged to competitors, sources such as merchandising, trade sites and sponsorship, and other event income.

The accounts for the 2011 event have yet to be finalised. However, the costs to date amount to £834,166 and it is not expected that these will increase significantly. In addition, the Department of Health (£182,247), the Department of Home Affairs (£27,483) and the Department of Infrastructure (£80,145) also have costs attributable to the MGP Festival. An additional £40,000 was spent, via a Treasury Marketing Initiatives Fund application, on advertising, trade shows, photography and press trips.

Using the data provided by the Isle of Man Treasury Survey ‘MGP Survey 2009’ which was undertaken in 2009, and based on an estimated 10% increase in visitors since the survey was undertaken, the event delivers a total spend of £5.9 million to the Isle of Man Economy with a payback to Treasury from additional spending generated tax revenues estimated by the Economic Affairs Division of the Treasury to be around £630,000. However, the further circulation of funds generated by the MGP within the economy are estimated to add approximately £125,000 to this figure.

Commenting on the outcome of the analysis, Chief Executive of the Department Colin Kniveton said:

""The costs of staging Motorsport events on the Mountain Circuit have risen appreciably in recent years and this is reflected in the current deficit of approximately £369,000. The Department is working closely with the Manx Grand Prix Festival stakeholders to review all aspects of the Festival and the consultation process is ongoing. We remain committed to working with all relevant parties to bring about the changes necessary to secure the future of a second motorcycle event on the Mountain Circuit.""

Speaking on behalf of the Manx Motor Cycle Club, a Club spokesman stated:

""We note that the Manx Grand Prix Festival is currently not making a net contribution to Government. However, we are pleased to note that the Festival does produce an income of £5.9million to the Isle of Man economy. The volunteers of the Manx Motor Cycle Club will continue to work closely with the Department and others to continue to grow the Festival and thereby attract increased numbers of visitors.""

For the opportunity to provide feedback, opinion and views regarding general aspects for the Manx Grand Prix Festival,
visit: http://www.mgpfestival.com.