Financial crisis puts Brazilian GP at risk in 2017
Sunday’s rain-troubled Brazilian Grand Prix could have been the last such event for a while.
Formula One organisers and political officials say that the continuation of the race at the Interlagos track needs greater financing at a time when Brazil is cutting expenses amid a severe economy crisis.
The Brazilian Grand Prix will run a deficit of around $4 million for just this year, according to race organizer Tamas Rohonyi, but the total figure for next year could be significantly worse – perhaps up to $10 million - because of the absence of key sponsors.
“If we can’t bring sponsors back, then Formula One management would have to cover that gap,” Rohonyi told reporters shortly before Sunday’s race, which was won by Mercedes driver Lewis Hamilton. “That is why Formula One boss Bernie Ecclestone is worried.”
Organizers and local officials have said that a meeting tomorrow in Sao Paulo will be important to determining the future of the race in Brazil.
Ecclestone suggested earlier this year that three races were at risk for 2017: Brazil, Germany and Canada. At the time, Brazilian organisers answered that uncertainty by saying the event is under contract until 2020.
Two companies, Shell and state-run oil giant Petrobras, declined to renew key sponsorships ahead of this season’s race. Petrobras has needed to cut expenses in the wake of a growing corruption scandal and has also pushed away from its sponsorship deal with the Williams team, which saw Brazilian driver Felipe Massa run the last home Grand Prix of his F1 career.
Ecclestone met with President Michel Temer, who took office after Dilma Rousseff was impeached in May, for the first time earlier this week. Neither side offered details of the conversation, but Temer has direct power over Petrobras and other state-run companies that have made large investments in sports in recent years.
Brazil’s economy, which fell 4 percent in 2015, is expected to dip another 3 per cent this year, though economists are predicting a mild recovery in 2017.
The loss of sponsorships isn’t the only risk to the traditional race in Sao Paulo, which has been on the calendar since 1973. Sao Paulo’s Mayor-Elect Joao Doria, who introduces himself as a manager first and politician second, has pledged to privatize the entire Interlagos compound.
Current Mayor Fernando Haddad said his administration is eager to complete ongoing renovations at the facilities, which began in 2015 and were reported to cost $60 million, “but it is better that we discuss that with the new mayor this week because it might not be worth to invest more here.” Still, Haddad believes a solution will be found. “When I took over in 2013, no one expected this infrastructure that we built at Interlagos,” he told reporters on Sunday. “Even with the economy crisis, we managed to do almost all of it.
“Formula One is a good investment. It brings revenues of about $60 million in only one weekend and it makes Sao Paulo known abroad. I hope it stays.”