17/05/2008
NEWS STORY
If anyone needs further evidence that European countries cannot afford F1 races then they should speak to Karl Josef Schmidt, boss of the Hockenheim Ring, says Pitpass' business reporter Chris Sylt.
"The Baden-Württemberg state must get involved financially, otherwise there will be no Formula 1 in Germany after 2010," says Schmidt, the man who only has a Grand Prix at his circuit every other year. So high are the costs involved that even this is not supportable.
According to Schmidt, Hockenheim has debts of over €34m (£27m) with interest payments following the circuit's renovations having pushed it further into a loss. The state stumped up around €15m (£11.9m) for the renovations and is apparently not keen on contributing even more. Quite the opposite in fact. Sources in Germany suggest that the state, which owns 94% of the Hockenheim Ring, wants to sell a large chunk of its shares in the circuit.
This could put it in an even more perilous position as a new owner may be even less keen on footing the huge race hosting fee estimated by industry monitor Formula Money to be $21.5m (£11m). A novel suggestion comes from Hockenheim's Lord Mayor Dieter Gummer who says that the circuit could sell its own naming rights to raise revenues.
However, it is unlikely that the F1 Group would allow the circuit to refer to its own naming rights sponsor in the context of an F1 Grand Prix. This is exactly what happened in the 2006 World Cup when FIFA demanded the AOL Arena to revert its name back to the Hamburg Arena for the duration of the event so as not to conflict with the governing body's central marketing policy.
Even if the Hockenheim Ring secures a naming rights sponsor it's likely that it would only be a drop in the ocean of debts that the circuit has amassed. With all the talk of capping team costs, perhaps it's about time for the FIA to cap circuit costs and limit the vast sums they pay out to the F1 Group in hosting fees. If it's serious about protecting 'historic' Grands Prix races this is one good way to do it.