BUSI­NESS NEWS

F1 Racing (UK) - - CONTENTS -

Bal­anc­ing the cal­en­dar

Like so many el­e­ments of For­mula 1, the cal­en­dar is in a state of con­sid­er­able flux at the mo­ment.

New com­mer­cial rights hold­ers Lib­erty Me­dia en­tered the sport last year say­ing they wanted to re­tain the fa­mous historic races and open F1 up to new mar­kets. It’s still too early to say whether they are go­ing to achieve their aim.

Part of the rea­son for that is the com­plex fi­nan­cial equa­tion in­volved in hold­ing a grand prix. This year there are 21 on the cal­en­dar – a record equalling the 2016 sea­son. The num­ber has gone up from 20 last year be­cause of the re­turn of the French GP for the first time since 2008.

The deal was struck by Bernie Ec­cle­stone be­fore his de­par­ture – just as the de­ci­sion by the Malaysian gov­ern­ment to end their 20-year ten­ure as hosts was in­flu­enced by the sport’s oc­to­ge­nar­ian im­pre­sario help­fully point­ing out that they had been over-pay­ing for the plea­sure of hav­ing an F1 race.

France rep­re­sents one pos­si­ble model whereby ‘historic’ races can make them­selves fi­nan­cially vi­able. The race will be funded by an ar­range­ment in which a con­sor­tium of re­gional bod­ies pay about half the an­nual €30m cost, with ticket sales and part­ner­ships cov­er­ing the rest.

The grand prix has been cham­pi­oned by Chris­tian Estrosi, the mayor of Nice and a for­mer rac­ing driver, who made his case on the the­o­ret­i­cal eco­nomic ben­e­fits of the grand prix. The ini­tial eco­nomic im­pact of re­turn­ing a grand prix to Le Castel­let in the south of France is cal­cu­lated at €38m, with the over­all eco­nomic ben­e­fit to the re­gion said to be €65m. If those sorts of cal­cu­la­tions are ac­cu­rate, the ap­peal of a grand prix is clear.

It’s a model that might work for other races in western democ­ra­cies, which can­not jus­tify us­ing pub­lic money to fund the en­tire race fee. Some­thing sim­i­lar could work for the proposed race in Miami in 2020, whereas if the muchtalked-about race in Viet­nam comes to fruition, that would more likely be gov­ern­ment-funded.

But it re­mains to be seen whether or­gan­is­ers of other historic races will be able to fol­low the French GP path.

Lib­erty have made it clear they see events such as the Bri­tish and Ger­man Grands Prix as in­trin­sic to a suc­cess­ful F1, but the fu­tures of both are in doubt.

Ger­many’s con­tract runs out this year. Lib­erty want to re­new it, but face the same prob­lem as Ec­cle­stone be­fore them: Hock­en­heim say they can­not af­ford to hold the race ev­ery year on the fees de­manded of them, while the Nür­bur­gring, with which Hock­en­heim used to share the event, have no money to hold one at all.

Then there is the UK. Sil­ver­stone’s con­tract runs out in 2019 af­ter the Bri­tish Rac­ing Driv­ers’ Club ex­er­cised their op­tion to end it. They said it was be­com­ing un­af­ford­able.

Lib­erty have said they’re de­ter­mined to hold a Bri­tish GP but the fee Sil­ver­stone was pay­ing was far less than most races – it will be £18.6m in 2019. That’s £7m less than France are pay­ing. So the ques­tion re­mains: how can Lib­erty and Sil­ver­stone come up with a deal?

EC­CLE­STONE POINTED OUT THAT MALAYSIA HAD BEEN OVER­PAY­ING FOR THE PLEA­SURE OF HAV­ING A FOR­MULA 1 RACE

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.