City will continue to pay to use Sturgis name

2013-01-09T03:30:00Z 2013-01-09T07:58:04Z City will continue to pay to use Sturgis nameDeb Holland Meade County Times-Tribune staff Rapid City Journal

STURGIS | The city of Sturgis is being fleeced, and city officials are not doing anything about it, according to the man whose father is considered the founder of the Sturgis motorcycle rally.

Jack Hoel, the son of Pappy Hoel, told the Sturgis City Council and City Manager Daniel Ainslie on Monday night that the city should not have to pay for the use of its own name.

“This is nothing but a gift to SMRi,” Hoel said as the city finalized its contract renewal with Sturgis Motorcycle Rally, Inc., which owns the rights to the Sturgis name as it relates to the annual motorcycle rally.

The contract in 2011 cost the city nearly $50,000 that included royalties paid for land the city leased and banner sales to official sponsors, Sturgis Mayor Mark Carstensen said.

Going forward, the city will not have to pay those royalties. The contract passed Monday is retroactive to the 2012 Sturgis motorcycle rally, the mayor said.

Under the five-year contract approved Monday, the city will continue to pay 10 percent to SMRi for the use of the Sturgis trademarks which, in addition to the name Sturgis, includes Sturgis Motorcycle Rally, Sturgis Bike Week, Take the Ride to Sturgis, Sturgis Rally & Races, and Black Hills.

Ainslie said the city received $269,440 from the 2012 rally as a result of its sponsorship license agreement. He says the revenue that is derived from the agreement is vital to the city's annual budget. Ainslie said the revenues generated the vast majority of the profit from the 2012 rally.

Each year the city of Sturgis enters into agreements with businesses such as Jack Daniel’s, Geico, Harley-Davidson, Coke, Budweiser and Dodge, which become “official” sponsors of the Sturgis motorcycle rally.

The contract also gives the city additional rights to publish the official magazine of the Sturgis motorcycle rally and the official pocket guide to the Sturgis motorcycle rally. The city also owns the official Internet website for the Sturgis motorcycle rally and social media outlets such as Facebook and Twitter.

“The 10 percent royalty payment is identical to the previous agreement, which was originally entered into between the city and the chamber,” Ainslie said.

Ainslie said the 10 percent royalty is included in the 2013 city budget.

Also at Monday’s meeting, the city authorized Ainslie to sign an agreement with Maverick Publishing of Spearfish to publish the official magazine and official pocket guide for the 2013 rally.

In the past, the magazine and guide were published by the city through its sponsor agent.

“Despite producing a high-quality publication, the city sustained a net loss of approximately $15,000,” Ainslie said. “Give the history of loss, the city sought a different arrangement where the city would not be directly responsible for the costs associated with the production of the publication.”

The new arrangement will allow Maverick Publishing to label their magazines as the "Official Magazine of the Rally." In return, the city will receive 10 pages at no cost on which advertisements of sponsors and exhibits can advertise. The city also has the option of purchasing additional pages if needed. The magazine will continue to have a complete list of rally events.

Maverick Publishing publishes some of the largest titles in the motorcycle magazine industry, such as American Cycle, Amercian Bagger and Urban Bagger.

Copyright 2015 Rapid City Journal. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

(8) Comments

  1. hills lover forever
    Report Abuse
    hills lover forever - January 10, 2013 6:15 pm
    As a former ED of SR&R I don't recall the city paying us any royalties for them to use "Sturgis".
    I may be wrong as it was over a decade ago, but pretty sure that is the real story. We actually managed the logo royalty program for the Chamber. As I recall it wasn't very profitable for our staff to do it, but I do believe the last year I was there the Rally Charities Foundation did distribute around 125k to community charities and causes some of which were on city property.

    I always find these comments interesting and wonder how many of them have factually check out things before posting. One final comment on the Rally, I believe as the demographics shift from cruiser bikes to metric crotch rockets the Rally will shrink and all the complainers will be begging for a financial shot in the arm.
    Report Abuse
    PICAPOI - January 09, 2013 8:05 pm
    *consensus, hopefully the third times a charm.
    Report Abuse
    PICAPOI - January 09, 2013 6:26 pm
    Report Abuse
    PICAPOI - January 09, 2013 6:23 pm
    SMRi is doing exactly what the SR&R was doing in the late 90's. Their using bullying tactics to make it look like their the majority consenses of Sturgis when in fact its only a handful of businessmen who benefit if they take all the competition out by making everybody think they our the "official caretakers" of the rally. I wonder how many players in the SMRi actually had a part in some way or form in the SR&R and how many of the SR&R founders have some quite partnership in the SMRi. No matter what this is business as usual for Sturgis. The people who run the rally are crooked just like the people who run the city of Sturgis.
  5. tatesau
    Report Abuse
    tatesau - January 09, 2013 3:05 pm
    This is highway robbery, I'm a citizen of Sturgis, and outraged. They should be forced to refund all the monies they have been paid on this matter, and we pay no amount to them ever in the future. Sturgis was named after an officer in Custer's army, it was established in the 1800's way before there was a rally. Also, what about the other Sturgis's in the US, are they paying them to? The city is being exploited here, and it looks like our so called leadership is in league. That's a lot of funds from a small city, that needs it for more important operations like schools. This issue should not be buried or even settled, till we get our money back. The city has a right to use its name in whatever promotions for the community, without paying a surcharge to the greedy rally mafia.
  6. juztme
    Report Abuse
    juztme - January 09, 2013 1:05 pm
    I agree with Jack Hoyle! It is completely absurd for Sturgis to not have control over its own name. My family has lived there since the EARLY 1900's and would be rolling over in their graves if they new what was going on. In fact Jacks mom was my mothers 1st grade teacher. The whole place has lost their minds!
  7. Hanstara
    Report Abuse
    Hanstara - January 09, 2013 8:29 am
    Also... They should not have had this approved any ways. They would of had to been the sole persons or organization that was selling the merchandise for a period of 5 years ""Roughly Quoted""" I have been selling Rally stuff when some of these people were not even old enough to go to the rally. Over 20 years.... I should own the copyright.. Then i would tell the City of Sturgis they can use the name for free and sign the copyright over to them.
  8. Hanstara
    Report Abuse
    Hanstara - January 09, 2013 8:24 am
    These people that are trying to have a copywrite on the name Sturgis should be in Prison. I think they are crooks. I for one will continue to sell Sturgis Merchandise that i have made. You cannot tell me that i have to pay royalties on something i have been doing for 25 years. If SMRI wants to play hard ball and go to court with me, Go ahead. I have nothing to take cause of them any ways.
Add Comment
You must Login to comment.

Click here to get an account it's free and quick