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Bleeding Canada dry?

NEWS STORY
14/04/2021

A couple of websites carried a story at the weekend, based on a report by Montreal's La Presse, which claims that F1 is seeking an "additional" $6m in fees from the Canadian government.

An additional $6m would be bad enough at the best of times, but the premise is that if the Canadian Grand Prix were to go ahead behind closed doors, the government would be required to cough-up the money to cover the race promoter Octane Racing Group Inc's costs.

At a time work gets underway on the Jeddah Street Circuit and Prince Khalid bin Sultan Al Faisal, chairman of the Saudi Automobile and Motorcycle Federation (SAMF), admits that December's Saudi Arabia Grand Prix is "very important for the Kingdom, for our youth, for the sport, for the economy, and for tourism", perhaps F1 should be carefully examining his words.

The reason the Canadian government puts money into the Grand Prix - the reason any government puts money into a Grand Prix - is in order to attract tourists and their money.

No spectators means no tourists and no money, and at a time people are already suffering the financial impact of the pandemic, to expect the hard-pressed taxpayer to pay for the privilege of hosting an event that won't do what it is intended to do - in attracting tourists and their money - an event they cannot even attend themselves, is going to be met with strong resistance, especially when the current hosting fee is around $18.7m.

What is unclear is whether - should the race go ahead - F1 would be expecting the $18.7m plus the $6m.

Last year, the $6m is the sort of fee F1 was paying circuits for the privilege using their facilities in order to put a championship together, this time around, F1 appears to be seeking a fee even if there are no fans, and let's not forget that ticket revenue is the only income that most circuits receive.

If F1 is looking for $6m from the government in Canada, does this mean that other scheduled events are likely to also to be told to pay up?

While the likes of the governments in Bahrain, Azerbaijan, Abu Dhabi and Saudi Arabia could be in a position to dig a little deeper, many others around the world, already hit hard by the financial woes of the pandemic, are likely to tell F1 to take a running jump.

As was the case last year, the small print in the various contracts means that neither side - F1 or promoter - wants to cancel a race, but rather postpone, for cancellation means either the promoter or F1 taking a financial hit.

"The important thing to me is that the Canadian Formula 1 Grand Prix in Montreal stays here," says Montreal Mayor, Valerie Blunt, according to Awani Review. "If that wasn't possible this year, it definitely should be there next year, because we care about it."

Referring to the $6m she said: "It's a big sum of course, and at the same time, we want the Montreal Grand Prix to be held in Montreal. It must be ensured that the taxpayers' money is spent the right way. We are in discussions with the Quebec government and the federal government to find out what the situation is."

As it stands, until further notice, most foreign nationals cannot travel to Canada, even if they have a valid visitor visa or electronic travel authorization, which puts paid to the tourism angle, the Montreal event having always been popular with race fans from over the border in the States.

Meanwhile, on the same weekend Mayor Blunt was expressing hope that the race will go ahead and mulling the extra $6m, CTV News reported that Montreal police had arrested a number of people after rioters smashed windows and set fires during a protest in violation of a recently-introduced 8 p.m. curfew.

For many fans, the Canadian Grand Prix is already a sore point, for many are still waiting on refunds for their 2020 race tickets.

Having been told that refunds would be made available by October (2020), many are still awaiting their refunds, while (promoter) Octane cites "unforeseen delays in the refund process".

As a result, some fans have already instituted legal proceedings in a bid to reclaim their money.

Others, who accepted the offer to hold their tickets over for this year's race, face the possibility of having to hold on to them for another year.

In the 12 months to December 2020, F1 recorded an overall profit of $18m, compared to $446m in the 12 months ending December 2019.

Without wishing to sound flippant one wonders if F1 might have made more than said $18m by investing all of its cash in a long-term high yield investment account.

Fact is, F1 bosses appear to be acting on the understanding that the pandemic is over and life has returned to normal... hence the fact that while much of the world was going into lockdown number two... Chase Carey was issuing the busiest schedule in the sport's 71 year history.

At that point the burden was handed to the ever-popular Stefano Domenicali who is now realising what he has gotten himself into.

Indeed, in a further twist hardly likely to endear the sport to Canadians, the F1 CEO has called on the government to allow F1 to enter and leave the country without the mandatory quarantine - a situation that led to the postponement of the original season opener in Melbourne.

A strange little story that appeared on a couple of random websites on a quiet, non-race weekend, might actually be an indicator of a far bigger issue.

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READERS COMMENTS

 

1. Posted by C5, 16/04/2021 17:17

"I really hope F1 is told to comply or eat dirt. Can't make the quaratine? Tough luck. Stay away. Oh, and well sue you for breach off contract if you are a no show.

What a bunch of entitled morons."

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2. Posted by jo6pac, 14/04/2021 14:12

"I wonder how many more tracks will have to pay an extra 6 million? Greed by f-1 circus knows no end. "

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3. Posted by ARL, 14/04/2021 12:19

"Long term high yield investment account? Whither one of those! Stuff Martin's Money tips, you could corner the market if you started pointing us in that direction. I suspect that corporate bloat post Bernie took most of the yield out of the F1 franchise. Perhaps they can find replacement funds by running a Myanmar GP or an extra one in western China. Local crowds are frowned on in both locations at present.

Was there not some contractual reason as to why F1 were desperate enough to pay host sites in 2020? Something about losing the franchise if too few events were run. Kicking promoters when they are down seems a good way to fulfil that requirement."

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4. Posted by Jet Jockey, 14/04/2021 12:14

"LOL at Mayor "Blunt"... That's not her name but tell you what I'll be blunt and tell you we don't want her in that position and hopefully she will be voted out at the next election."

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