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Concorde clause paves the way for 25 race F1 calendar

NEWS STORY
12/06/2011

With the F1 world's eyes firmly focussed on the situation in Bahrain it has been easy to overlook the other news which came out of the recent WMSC meeting. One development in particular could have a gigantic impact on the future of Formula One and it can be found in the seemingly innocuous 2012 race calendar which was released.

As expected, the calendar shows that the United States Grand Prix in Austin will run from next year but, surprisingly, no races have been cancelled to make way. It gives a total of 21 races which caught the eyes of Pitpass' business editor Chris Sylt.

Clause 10.5 of the Concorde Agreement, the contract which governs the commercial aspects of F1, states that the teams need to give their consent if "the number of Events that take place in any Season exceeds seventeen (17) (with a maximum of twenty (20) Events)." This seems to cap the number of races at 20 and since the FIA is a signatory to the Concorde it would seem to have breached the contract by releasing a calendar with more than 20 races. However this is in fact not the case at all.

Sylt discussed this with one leading F1 team principal who confirmed that "there are provisions for additional races [beyond 20] but there is conditions attached to those." In short, if the teams agree (read: if the teams are paid a higher share of F1's profits) there can be more than 20 races. It is a tempting prospect for Bernie Ecclestone, boss of the F1 Group, and the sport's majority owner the private equity firm CVC.

As Pitpass has reported the F1 Group had revenue of £974m ($1.6bn) last year with £286m ($470m) coming from the sale of television rights, £346m ($568m) from race hosting fees, £257m ($423m) from trackside advertising and corporate hospitality and the bulk of the remainder from sponsorship of the series.

F1 is already broadcast in 187 territories worldwide and, as has been demonstrated in the UK, if the price rises too high, the channels simply won't pay for it. This makes it hard to increase the revenue from TV rights. Trackside advertising and corporate hospitality revenue is directly proportionate to the number of Grands Prix on the calendar as of course is that from race hosting fees.

In summary, although F1's revenue has been rising at 12.7% annually it would skyrocket even higher if the number of races increases. Even if the teams have to be paid more money to give this the green light it could still be worth it for CVC and may indeed be necessary.

The addition of Russia in 2014 would take the calendar to 22 races with South Africa and Mexico also believed to be working on bids. Writing in the Express newspaper Sylt has also revealed that Formula One Licensing has applied for a pan-European trademark for the title 'Grand Prix of Poland'. This is a crucial step in the process of bringing a race to the F1 calendar and the trademark application covers three key classes including sports events, radio and television and printed products, such as race programmes. It is not known where the race would be held. One of the most likely locations is Gdansk, a large port city in the north of the country where a 5.7 kilometre circuit has been planned at a construction cost of £180m.

Poland, South Africa, Mexico and Russia would take the calendar to 25 races if the teams agree. However this could increase the demands on their staff so much that they may not agree even if they receive more money from F1.

The team principal stressed to Sylt that "all the teams are fairly convinced that [the recently-released calendar] is unlikely to be the final calendar...I am sure it will be discussed in the forthcoming FOTA and commission meetings and anything else. I would be surprised [if it went to 21 races]. I think 20 is probably an optimum number. You've got to think Istanbul is going to be susceptible but I think Bernie would always look to have more on there to put pressure on the others as well and it is his job to do that."

Echoing this, FIA president Jean Todt recently told Spain's Diario Sport "there are 21 dates, but the championship will be with 20 Grands Prix. We don't know which one will go, but the world championship will be 20 races." One wonders how much money it would take to convince the teams to agree to race at more.

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