What Makes The Acura Grand Prix Of Long Beach A True American Success Story

This weekend, the streets of this Long Beach, California — a booming city in Southern California — will come alive with a three-day street festival of speed, entertainment, and noise.

For the 47^th year since it first started in 1975, the Acura Grand Prix will capture the interest and imagination of over 200,000 spectators over a three-day period.

In Southern California, it has become motorsports version of The Rose Bowl. It doesn’t matter who is playing in the Rose Bowl, it’s a tradition that has stood the test of time.

The Acura Grand Prix of Long Beach certainly fits into that category when it comes to street races.

From that first Formula 5000 race in 1975, to the United States Grand Prix Formula One World Championship round from 1976-83, to its days with CART/IndyCar from 1984 until 2008, and finally its role as a major race on the NTT IndyCar Series schedule beginning in 2009, no other street race in North America can match this event.

It’s the second biggest street race in the world, behind Formula One’s Monaco Grand Prix held in Monte Carlo.

But two years ago, this race came to an unexpected halt.

It was a casualty of the COVID-19 Pandemic of 2020 that virtually shut down the United States for a least three months. That was followed by various shutdowns, mandates, and prohibitions from various states.

Some of the strictest were in California.

From a financial standpoint, not having a race in 2020 could have been devastating to the Grand Prix Association of Long Beach. But through the leadership of President Jim Michaelian and his 15-person full-time staff, they were able to pivot and persevere.

The 2021 race was moved to September 26 in order to have a full crowd – something vital for the economic health of this event.

This weekend, it returns to its traditional April date without any restrictions to spectators or participants.

“At last, this whole concept of us reassuming our April date, which has been a tradition here for 46 years after having run the event in 2021 in September because of the pandemic, it’s good to get back in our traditional time frame,” Michaelian told me in an exclusive interview.

Having the Acura Grand Prix of Long Beach is a tradition that many Southern Californians anxiously await. Long Beach in April is as synonymous as the Indianapolis 500 on Memorial Day Weekend in May.

“I think it’s important because this event has always been associated with springtime, with Spring Break, vacations, kids out of school and the opening of the Spring Festival,” Michaelian explained. “That is what this event has always been since it ran its first Formula One race here in 1976.

“Yes, we made a deviation last year, solely because of the pandemic. That was crucial to us because we weren’t in the market place for two years and it was very significant, we got that event off very successfully even though there were a number of mandates and protocols in place at the time for mega-events in the state of California.”

Spectators had to wear a mask, have proof of vaccination or a negative COVID mask in order to buy a ticket. For those who refused, they were politely told they would be welcomed back in the future.

“Despite all those restrictions, we still had a little over 180,000 people, which was a significant turnout under those conditions,” Michaelian said of the crowd that attended over the three days.

“More importantly, it gave the event a significant amount of momentum going into the April event six months later. Now, we are reaping of the benefit of not only having conducted that event but coming out of it very successfully and reaching pre-pandemic, more normalized attendance numbers here in April.”

^{The Challenge of Staying in Business Without a Year’s Worth of Revenue}

It takes a significant partnership to make a sporting event held on city streets in a populated city in Southern California work.

The race course and its infrastructure have to be constructed and torn down for each event, unlike an oval, which is a permanent facility.

Imagine how difficult it was to survive a year where there was no race and no revenue.

“It was very challenging, period,” Michaelian said. “Back in the early part of 2020, our event was scheduled for April. We had put up virtually 70 percent of the circuit. It was already in place when the state came to a halt here on March 12, 2020.

“Literally, two days later, we were in the process of bringing all of those materials and assets back and earning zero dollars’ worth of revenue.

“Zero.

“Not only did we not experience any revenue stream, but we had expended a considerable amount just building the circuit to that point, then having to turn around and remove it. So, 2020 was a challenging time for us.”

The Grand Prix Association of Long Beach was eligible for two Payment Protection Program loans from the Small Business Administration.

“That helped, but it was not super significant,” Michaelian admitted.

Michaelian also had to take care of his paying customers and vendors, exhibitors, and hospitality clients; many of whom had already paid in advance for tickets and exhibit space.

All were given the option of a full credit to the next Acura Grand Prix of Long Beach, or a full refund for their payments.

“Some took the refund; some took the credit,” Michaelian said. “There were a considerable number of credits that were due to our customers for that event.”

Originally, Michaelian tried to reschedule the 2020 race for September or October, but COVID sanctions prohibited any spectators. By December of 2020, it appeared obvious that strict crowd restrictions would be in place for April 2021.

“Keep in mind, we still had to build the circuit and all the expenses associated with it, even if you are limited in terms of the number of people that can come to the event,” he said. “Because of that, I passed.

“Fortunately, we were able to get a date in late September that matched up with all of the various sanctioning bodies whose events we run here. We were able to replicate our 2020 race here in September of 2021.

“In so doing, we earned out all of those credits. I’m talking about seven figures in terms of the value of those credits. Our 2021 race, the revenue stream wasn’t what it would be under normal circumstances with that size crowd and all of the various attendees here, but more importantly we removed all of those credits so we could approach race in April 2022 race with a fairly clean slate.

“Now, we are back to what we would call a fairly normalized type of financial operation.”

Essentially, the 2021 Acura Grand Prix of Long Beach was paid for by the revenue from 2020 sales, with the exception of sponsorship.

That means from a business standpoint, this weekend’s race brings new revenue to the organization for the first time in two years.

How It All Started

Long Beach and the Firestone Grand Prix of St. Petersburg are the two most successful street races in the United States. St. Pete began in 2003 with Champ Car, missed a year in 2004 and has been part of the current IndyCar Series since 2005.

The Big Machine Music City Grand Prix in Nashville was a huge success in its initial year in 2021, but it remains to be seen if that success is built to last.

According to Michaelian, there have been at least 40 street races that have been initiated and fallen by the wayside since the Long Beach Grand Prix began in 1975.

The event was created by a Long Beach Travel Agent named Chris Pook in the 1970s. He wanted to bring more tourism to Long Beach, which at the time was a seedy dive of a Navy town. When the Navy left Long Beach, it began a transformation that continues to this day.

At that time, Michaelian was the second employee hired by Pook to help create the street race.

“I got a bachelor’s degree in Physics from UCLA and early in my career, I realized that would not be my final destination,” Michaelian said. “So, I switched over, went to graduate school, and got an MBA.

“I went to work with an automotive industry company — BorgWarner. The reason I went to work with BorgWarner, I had an interest in racing from when I was just a kid. The fact BorgWarner was involved with the Indy 500 had some influence with my decision. I went to work with them for a while in their MBA program. Then, I teamed up with a friend of mine to run a small chain of book stores. Those were sold and about that time, Chris Pook talked about bringing a race to Long Beach.

“My ears perked up. I lived in Long Beach and said if somebody is going to run a race in my town, I’m going to be part of it. I went down, met him and off it went. I just went and introduced myself. It was at a Coastal Commission meeting downtown. I went and introduced myself, my interest level, background, and I started in.”

Pook’s staff was small so everybody had to excel in different areas. Michaelian was in charge of finances, but also sold tickets, advertising and managed promotions.

If that wasn’t enough, he help install fences in the middle of the night in order to build the circuit and get the event underway on schedule.

Under Pook’s leadership, and with a strong sponsorship backing from Toyota, the Toyota Grand Prix of Long Beach grew into a Southern California sporting tradition.

Strong Support From The Local Government

The race has benefitted from a very supportive local government and the city has benefitted from the race with a tremendous infusion of exposure, leading to additional business opportunities.

“It’s a small city with a big city feel to it,” Michaelian said. “There is a tremendous rapport between the various factions here and that is why things get done and get done very efficiently. That is what a conventioneer or a developer is looking for in terms of this being a venue to succeed.

“That is what the Grand Prix and the city affords somebody that wants to come into town.

“The city has transformed itself significantly. It’s been a metamorphosis here. This was a Navy time for all of those years in the 1970s and 1980s.

“When the Navy left here, the city administration was very astute in terms of realizing that it had to change direction. It went very heavy into trade, technology, and the retail aspect. All of that has flourished in this town. In terms of the Grand Prix being beneficial in achieving those directives, I think it has been a very positive partnership. I wouldn’t ascribe the success strictly to the Grand Prix, but we would like to think we have contributed to it over the years.”

The Value Of Sponsorship

For 44 Years, the Grand Prix of Long Beach Association had a valuable partnership with Toyota. From the first race in 1975 until 1998, Toyota was the official automobile of the race. Beginning in 1980, Toyota became the title sponsor, and the race was renamed the Toyota Grand Prix of Long Beach.

Industry insiders believe during the peak of Toyota’s involvement with the event, the total package was worth close to $10 million.

“But it isn’t just having a title sponsor and them writing a check,” Michaelian emphasized. “It’s the integration of their activities, our activities, co-oping a lot of promotional efforts that are involved and both organizations looking for ways to actively promote the event, their products and reach out to customers and create a positive environment.

“That is where we had a great relationship with Toyota for many years. Thankfully, we’ve been able to establish a very symbiotic relationship with Acura.”

Currently, Toyota does not supply engines to the NTT IndyCar Series. Over time, the company decided to end its relationship with the Grand Prix Association of Long Beach after the 2018 race.

But it didn’t take long for American Honda Motor Car Company of nearby Torrance, California to take over the title sponsorship.

In 2019, it became the Acura Grand Prix of Long Beach.

“Acura is a young, energetic part of Honda,” Michaelian said. “They make decisions quickly and are a great match for us. I’m delighted to have Acura as a sponsor here. They have lived up to everything that we had talked about in the beginning in 2019 when this started and more.

“Yes, it’s an important relationship and we have had the benefit of that with two major OEMs over the duration of the event.

“But, while that is very important, the other members of your sponsor family are equally contributing, perhaps on a lesser scale. Having sponsor partners who actually participate in the promotion and involvement of the event is very important.”

The paddock and grandstands will be packed for Sunday’s main event, the third race of the season for the NTT IndyCar Series. But with so many other races contested over the three days of racing, after sanctioning fees are paid, the company finds other ways to boost is profit margin.

“We own all of the hard assets,” Michaelian said. “We don’t own tenting, furnishings, and rentals, but the bridges, grandstands, safety barriers and tire pallets, we own.

“That leads to another interesting point. Of those 15 employees that we have, six of them work in our operations department. That department is vested with the responsibility of going out and obtaining work in other areas the rest of the year. Quite frankly, they have done an extraordinary job.

“They just came back from helping put on the Academy Awards, which they did for years. They put on the EDC concert at Las Vegas Speedway every year in May. They do a number of volleyball events, the AVP, etc.

“During the rest of the year, that is a revenue stream for us and offsets the expenses of having a full-time staff. When you get down to race time, that’s a critical factor in terms of the success of the operation of these events. That’s an important factor in terms of the overall financial positioning of the company.”

The Grand Prix Association of Long Beach recently signed another contract with the City of Long Beach, taking the event through 2028.

Michaelian’s Formula For Success

When Pook left in 2001 to become the CEO of CART, it was during open wheel racing’s infamous split. CART’s biggest race was the Toyota Grand Prix of Long Beach. The rival Indy Racing League had an all-oval schedule featuring the Indianapolis 500.

Michaelian took over as the President and CEO of the Grand Prix Association of Long Beach and began to put his own stamp on the product.

He quickly recognized the huge throng of spectators that come to the track all three days are not necessarily race fans.

They are there to be entertained.

“When you put on a street race, you will attract a lot of non-racing fans,” Michaelian said. “We know that. We’ve done surveys.

“Up to 65 percent of the people here would not qualify as a racing fan. You have a large base that you must appeal to. The only way to do that is have a variety of racing events, any one of which has an appeal of some kind to that group. Therefore, the reason we structure our event schedule is to have that in mind.”

That means a wide range of diverse entertainment.

“We have Open Wheel Cars, Indy cars, IMSA Sports Cars in Southern California. Aspirational cars. What are they? Ferraris, Corvettes, BMWs, Lamborghinis,” Michaelian said. “That’s why you run that series.

“We have Drifting. That has a huge, very strong Latino and Asian American following. We want those people to be part of the activities, so we run them. We have an historic race every years featuring GTP cars, but in the past, we have had Formula One, Indy cars, Trans-Am, GTO, Formula Atlantic. The whole idea is to appeal to some of the older folks to look around and remember these cars and seeing them in competition.

“Why do we put Robby Gordon’s Super Stadium Trucks on? Because they are universally appealing to virtually all groups. High-flying, lots of action, rubbing and people are thrilled by it.

“This year, we have added Porsche Carrera Cup. That’s 35 identically prepared Porsche 992s going down Shoreline Drive. That’s going to be a sight to see.

“All of those have a different sight, different look, different feel, a different sound. You have 8s, you have Turbos, you have 4s, ICE cars – all of the different sounds of them. There is no monotony. We are in the variety business.”

But this event isn’t just about racing. It’s a celebration of cars, culture and entertainment.

“You have to make sure there is enough off-track activity to facilitate the needs of people who don’t really want to sit in the grandstand and watch a lot of racing,” Michaelian said. “We have a huge lifestyle expo, a kid’s zone, Mother’s Exotic Paddock on Sunday, we have concerts out front on the plaza at night. All of those are further attractions that people want to come and be a part of.

“In the end, the objective is for people to find something in that weekend that they find to be attractive for them. If you can do that, then you have a much stronger chance of getting those people to return, bring their friends, their family, and others.

“Quite frankly, that has been the formula to our success.”

Keep It Short, Don’t Make It Longer

Michaelian believes in short events, not longer races, in order to meet the changing demands of society and it’s shorter attention span.

“Too often in our business, we are hard-core fans who want long races and long activity,” he said. “But quite frankly, what we are finding out clearly is the younger generation has no appetite for long races. They have no appetite for long anything. Attention spans are shortening. I’m constantly looking for series that run short races, short practice, short qualifying.

“You run a 30-minute race. I’m excited. You get it to one-hour, unless it’s a headliner, that’s good for me. That’s good for them. They get to see something but don’t have to sit there forever and watch something they don’t have an interest in.

“Put it on, make it exciting, get it done, next. Here comes another one.”

When It’s All Over

As part of the contract with the city, Michaelian’s staff has 50 days to set up the course and only 20 days to remove it.

The roar of the racing engines will be silenced after the final race on Sunday. In three weeks, the race course will be gone, and the residents of Long Beach will be driving the same streets as the winner of Sunday’s 47^th Acura Grand Prix of Long Beach.