I have concerns, but hopefully also some constructive ideas and opinions.
Firstly, let's consider who your target market is. First and foremost it's demo users and from my experience, the long-term LFS demo users fall into two categories:
- They don't want to pay for the game and get enough enjoyment out of the demo content.
- They simply cannot afford a license.
Short-term demo users either leave or buy a license.
Now let me draw your attention to
this ~700 post license giveaway thread. There is absolutely a market for
gifting licenses, but I'm sceptical as to whether people would essentially enter a lottery for one, especially for the prices you've mentioned. You said it yourself, demo racing is a derby. That means that the demo users that don't want to pay for the game are unlikely to pay for half of an S1 license for a 7% chance of getting a license (The basic probability of winning in a 15 car grid, the limit for online demo servers). Similarly, those who can't afford a license are unlikely to part with cash for a shot at a license (maybe some of them will take the chance and do it once, but again, I'm sceptical). That leaves your only realistic potential market, the short-term demo users who are looking to buy the game and who might fancy their chances at winning one at a fraction of the cost.
The only way to know for sure is to get the attention of demo users and gauge their interest. I'd recommend doing this either by setting up a demo server and advertising the idea on there through some sort of InSim application, or by directing them to a webpage (or at the very least a cut-down version of this forum thread with a succinct description of the idea and a poll). Before I say any more on that, let's consider your other potential market.
In my honest opinion, the current climate of LFS and its online community of S1/S2/S3 license holders simply isn't active enough to get the critical mass of paying drivers for paid events/leagues unless it's extremely well organised and potentially backed by the devs. I must stress that this is only due to LFS' current activity levels and who knows what sort of spike and drop-off we can expect when the new graphics, track updates and future content updates land, but right now, getting a paid league/event off the ground for licensed users is going to be a hard sell. The only way this works is if you're running it at the calibre of a league like CityLiga with a website statistics system, livestreams and a team of staff administrating the races etc.
Then there's the prizes. S2 to S3 upgrades are going to be a hot topic when we get more S3 content, but without a realistic timescale estimate from Scawen, that's not a smart horse to bet on at this stage given the investment of both time and money you'd be putting into this. Given that there are very few S1 mode servers, let's assume that the majority of the non-demo online community have S2, right now, an S3 upgrade will only be attractive to a small number of these people. Why? S3 has 1 track and for an S2 license holder, it's only a small amount of money to upgrade compared to what they've already spent so if they really wanted to get it, they'd have it already. As soon as we see more S3 content I'd definitely consider offering S2 to S3 upgrades. Then there's S3 license holders, what can you offer them? To really encourage existing license holders, your prizes have got to be substantial and if you're really considering committing to an idea like this, my advice is go big or go home.
VR is growing in popularity and LFS does VR brilliantly,
as I've explained here, then there's cheaper prizes like wheels and accessories like shifters and pedal sets. Honestly, if you're considering asking people to pay for your event/league, make it something people want to enter and put lots of effort into the organisation.
Speaking from experience, I've run many LFS leagues over the years and even back at LFS' peak when we were considering leagues with paid entry, we were sceptical of whether we would be able to entice enough people to cover our own costs. Unfortunately for you, we never actually tried, so I have no benchmarks. That said, I've always been interested in the idea and was extremely close to throwing caution to the wind and running a paid league with nice prizes. Remember that back in the day, when LX Week was a thing, the devs ran events with prizes as substantial as Logitech G25s, not to mention the actual VW Scirocco they gave away at the 2018 Leipzig Gamescon! (VW provided the car!)
You then need to look at the geography of the demographic you're aiming at. You're based in the US and the majority of the online community in LFS is based on the other side of the pond, so you're probably going to want to consider running your servers over here. You also mentioned that if you target demo racers you'll need at least 12 racers to cover costs. As I mentioned earlier, bear in mind that demo servers can only accommodate 15 cars on track at once so to get 24, you'd need 2 servers.
I've only scratched the tip of the iceberg, but I felt I needed to at least voice my opinions before you get too far into planning all of this, I hope you at least find some of it useful.
Many of the community have been in your position over the years, wanting to provide racing opportunities to the community and you've taken it one step further by taking your trailer into the wild and it's honestly amazing, but unfortunate that luck's not always been on your side so far. To that end, my inbox is always open and my interest is always there if there's a good idea being floated around with other enthusiastic people. If you'd like to discuss the paid league/event idea with me further, please do get in touch.
Either way, I wish you the best of luck.