Race promoters to put further squeeze on F1 teams?

23/01/2018
NEWS STORY

If ever proof were needed that Britain remains at the heart of Formula One, one needs look no further than last week when a number of high level meetings took place in London.

One of these meetings saw a rare gathering of the Formula One Promoters Association (FOPA) the organisation which represents the interests of circuit owners and race promoters.

Like many, it's fair to say that the promoters are not happy, for other than the prospect of another year of Mercedes domination there is the little matter of race fees and the annual increment.

Though France and Germany return to the calendar this year, 2017 witnessed the final Grand Prix in Malaysia, while the owners of Silverstone, the British Racing Drivers' Club (BRDC) have opted to end their contact for the British Grand Prix after 2019 and there remains a worrying asterisk against the Circuit of the Americas entry on this year's calendar.

Of course, some promoters have more to complain about than others. While Monaco doesn't have to pay any fees to host its event and Silverstone gets a number of 'incentives', others have to rely on government subsidies and pop concerts in order to pay the bills.

All of which isn't helped by the fact that with no significant changes to the regulations until 2021, Mercedes domination is likely to continue.

On average, the promoters pay 22.3m ($31.1m) but as we said previously the fees vary from event to event with Monaco paying nothing and Abu Dhabi a reported 54m ($75m), not forgetting the annual 5% increment.

In 2016, race hosting fees contributed 470m ($653m) to the sport's coffers which represented the biggest slice of F1's 1.2bn ($1.8bn) revenue according to the latest accounts.

At a time the teams and engine manufacturers are going head to head with the sport's new owners, and not forgetting that little matter of Liberty's plans for how the prize pot will be divided as the sport moves forward, so too the race promoters are squaring up for a potential stand-off.

Indeed, one source close to FOPA tells the Telegraph that at a time a significant number of new contracts have yet to be agreed, there will be no such deals unless Liberty is willing to renegotiate.

"No contract will be renewed under the existing financial conditions," said the source. "We are talking about a reduction in fee for sure.

"It is impossible to pay the kind of money that most of us pay," they added. "So the overall gist is that it is too much for what the promoter is getting."

Already facing a drop in revenue of 5.9% to 467m ($650m) with the threat of continued falls over the next couple of years, the teams are already restless, and at a time various factors have seen the sport's operating loss double to 50m ($70m) the thought of taking a further hit due to the demands of the promoters will only further muddy the waters.

While Malaysia has ditched F1 it retains MotoGP, organisers claiming that the so-called pinnacle of motor sport doesn't offer anything like the same level of entertainment, pointing to falling race attendance and viewing figures as proof.

Referring to the meeting, the source told the Telegraph. "It comes down to a very simple issue and that is can the product be improved or not?

"On that point, Ross Brawn was, sort of, very clear and very objective, and he said, we are working on it, there will be some aerodynamic changes which will take 2019 and 2020 to develop and introduce. He would not comment on the engine formula. He said it is a very complicated negotiation as everybody knows. He is doing his best. That's all he can do can't he.

"Otherwise it was a standard American presentation sequence. Every department demonstrated what they do and how they do it. It was perfectly professional and fine. That's about it.

"It is very, very clear that every contract is different and it could be pointless to try to make a collective negotiation. There will be absolutely no collective negotiation on the price," warned the source. "There shouldn't be. Every condition is different. Every country is different. Some people have government money, some people don't.

"The overall gist is that it is too much for what the promoter is getting. Now, if the product improves, and it might easily in the next two or three years, it's a different story."

While there cannot be any changes to the engine formula before 2021, the aerodynamic changes mentioned by Brawn are for the most part cosmetic and, and as previously reported, aimed more at improving sponsor visibility rather than racing. Indeed, a call to simplify the front wings, one of the main reasons why overtaking fell by around 50% last year, was dismissed.

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Published: 23/01/2018
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