What is the business model of rally?

The tricky part of discussing the business model is that there are two very different groups "in business" when it comes to any particular rally.

1. The sanctioning body (for example, NASA Rally Sport)
2. The event itself (for example, High Desert Trails Rally)

For the event itself, the income streams are:

1. The entry fee. This is generally 95% of the income.
2. T shirts, stickers, maybe meal tickets. There's the other 5%.
3. Maybe ticket sales to spectators, or VIP passes to spectate. Only about 10% of the rallies in the US have this.
4. Sponsorship maybe. At least half of the rallies in the country have some level of sponsorship, but much of it is in-kind, meaning that it's as services provided, not actual cash. For example, a town could 'sponsor' a rally by letting them use town buildings at no charge.

The money brought in by the event is used to feed the volunteers, pay for all the road permits, pay the sanctioning body for insurance, trophies, renting facilities, and paying medical staff.

For the sanctioning body, the income streams are:

1. Rally licenses, purchased by the racer.
2. "Sanction and insurance" packages, purchased by the event.
3. Sponsorship maybe.

The money brought in by sanction and insurance packages is (in the case of NRS) almost entirely passed through to the insurance company. The rally license money funds things like promotional flags and banners, year end trophies, and all the free vinyl we give away to racers.

One large misconception among racers is "NASA Rally Sport organizes rallies". No. Sanctioning bodies don't organize rallies. The organizers of each event, generally a group of two to ten people, organize the event. This also means that the sanctioning body doesn't set the entry fees, those are chosen by each event to meet the event budget.