Economics of F1
Tuesday, November 23, 2010 at 11:57AM
There are two related items today about the economics of staging an F1 race. Valencia it seems has had enough of subsidising Bernie with four years left to run on their contract. Bernie of course will not let them out of the contract so they are trying to find someone to take it over, which you would think would be easy with the number of countries who want one. If you cannot make it pay in an Alonso mad country like Spain where can you? It is costing them 30m euros, about $45m, to stage the race, including Bernie's fee, which must be a cut rate, and they are only recouping 10m euros from ticket sales, so they lose about $30m a year. Why could they not work this out before they did the deal?
On a similar note Alain Prost is frustrated that France does not have the political will to "buy" a GP. He knows they will lose 8m euros, even with a reduced fee from Bernie, and no government wants to spend that, on top of building a new track. Austin, are you listening? So if Alain could work it out beforehand why is Valencia surprised?
It seems there might be moves afoot to put Daniel Ricciardo into Buemi's seat at Torro Rosso. Not sure that is a great move for either party, one season in GP2 would probably be better for Daniel than being thrown in the deep end with a mid-field car. I know Vettel made the transition from Torro Rosso, but I would not like to bet my future on that happening again. Look at the Hulkenburg situation for a driver without a big personal sponsor.
Interesting that it has been announced that HKS, an architectural firm, has been added to Tilke for the Austin Track. Whatever you say about Tilke's tracks, his architecture has been good, so why bring in another architect?
On a similar note Alain Prost is frustrated that France does not have the political will to "buy" a GP. He knows they will lose 8m euros, even with a reduced fee from Bernie, and no government wants to spend that, on top of building a new track. Austin, are you listening? So if Alain could work it out beforehand why is Valencia surprised?
It seems there might be moves afoot to put Daniel Ricciardo into Buemi's seat at Torro Rosso. Not sure that is a great move for either party, one season in GP2 would probably be better for Daniel than being thrown in the deep end with a mid-field car. I know Vettel made the transition from Torro Rosso, but I would not like to bet my future on that happening again. Look at the Hulkenburg situation for a driver without a big personal sponsor.
Interesting that it has been announced that HKS, an architectural firm, has been added to Tilke for the Austin Track. Whatever you say about Tilke's tracks, his architecture has been good, so why bring in another architect?
Reader Comments (4)
Bob,
I see that the Labor premier in Melbourne, Mr. Brumby, is having second thoughts of renewing the F1 contract when it expires in 2014. There is a limit to what people wil pay to go to a race meeting, and I think that limit was reached a few years ago.
Same applies to rock concerts. They start asking $250 or so for a seat now and thats just crazy.
I am in the process of moving north from Melbourne. Spent 13 years here, lived 20 km from Albert Park, and never went there. Yet, in my Japanese days, I would spent $1,000 to got to Suzuka for a race meeting. That was just my cost for Bullet Tran, taxis, hotel costs and film. At least I had free admisssion to the races as a photographer.
Valencia wants out of F1 deal?-There was already a nice circuit with great facilities near valencia, the cheste circuit where official F1 tests in pre-season are conducted, and the FIA GTs and the MotoGPs race there... I've been to the track several times and it is waaaay better than the harbour circuit. Even if you could not overtake the same as in the urban track, it would be much better and cheaper to race there instead of in the harbour. Just because Bernie wanted a picture of a F1 going through the bridge it doesn't mean that we have to pay zillions of euros for it ...
The Austin F1 contracts with Tilke GMBH and HKS of Dallas are for different parts of the project. Tilke has the track design - with major input by the promoter and others, while HKS has been selected for structural design - the paddock, suites, grandstands etc. In addition, state law requires a Texas-licensed "engineer-of-record" to review and approve the plans. Although other engineering and design firms in the Austin area are on contract, HKS may be the one that serves that function. You might also research the Texas Major Events Trust Fund, which reimburses sponsoring communities and organizations for their costs of hosting major events, by means of sharing the additional sales taxes (lodging, food, entertainment, rental cars) generated in the state by visitors to the event. The state Legislature also appropriated $25M for the first year's sanctioning fee, recognizing the major economic benefits to the state from thousands of fans coming to F! over the next ten years.
But that is my point, Tilke is an architect and the best parts of his work has been the iconic looks of tracks like Turkey and China, not the race track. As an Engineer and track designer I understand the need to have a local stamp the plans, I still do not get the need to bring in HKS, it only needs someone to "review and approve" the plans as you say. I don't understand the relevance of the Texas Major Events? As a promoter I know only too well the State gets more benefit from the race than I do, but even with the State paying in Australia it still loses money, if that is your point.