How new tracks are squeezing traditional circuits out of Formula 1

2005 Italian Grand Prix start, 470150

Christian Sylt keeps a close eye on all things money related in Formula 1 (that’s pretty much everything, then) for his excellent publication Formula Money.

He shared some very interesting data with me on how the new Formula 1 circuits are raising the cost of hosting a Grand Prix beyond the reach of F1′s traditional venues:

2002 2007
Average race sanctioning fee $11.3m $19.3m
Highest race sanctioning fee $26m $37.8m (Malaysia)

How much are the European rounds paying compared to that astronomical $37.8m figure of Malaysia’s? Catalunya, Magny-Cours and Silverstone all pay $15.75m – far below the market average.

On the face of it the Spanish Grand Prix should have nothing to worry about as the country has recently fallen in love with the sport thanks to Fernando Alonso.

But it now faces competition within its own borders as Valencia is now hosting the European Grand Prix and tickets sold out very quickly.

Early indications are that Catalunya’s grandstands, which we have become used to seeing full to overflowing in recent years, may not be at maximum capacity this year – although there are still a few days left for last-minute ticket purchases.

Lewis Hamilton’s popularity has prompted the British Grand Prix organisers to add another 2,500 seats this year – but even if the Grand Prix sells out can it really afford $37.8m without extra funding from somewhere else?

Silverstone’s contract runs out at the end of next year and the British Racing Drivers’ Club is investing money in re-developing it to keep Ecclestone happy. But will they have enough money after that investment to actually be able to afford the race?

Ecclestone doesn’t seem too concerned about their dilemma:

They’ve known for five years what they have to do to maintain it – to bring themselves up to speed with everybody else.

We can’t go round the world making people put grade A circuits together and we’ve got the home of motorsport in England and we’ve got the worst facilities. I’m sure they’ll make the effort to get it together in the end.

It’s not unreasonable for him to want his F1 championship to be held at the best tracks with the best facilities. But if they’re all going to be charged the same rate and the cost is pushed up by nations with governments willing to back the events then those without government clout are going to be priced out.

Protecting historic F1 venues

Fernando Alonso, Renault, Spa-Francorchamps, 2005, 470313

So what’s the solution? Some have suggested that certain F1 rounds should enjoy protected status on the calendar because they are part of the sports heritage.

For example, Britain and Italy have held a round of the world championship every year since it began in 1950. France only missed one year. Three other events have held substantially more Grand Prix than the others: Germany (55), Monaco (54) and Belgium (51). (Source: Analysing Formula 1).

These events are a precious part of F1′s heritage. Some of them like Spa, Silverstone, and Monza are much the same venues that were used in the 1950s and earlier. If they cannot afford the massive increase in prices to hold an F1 race then F1 should recognise their value to the sport and give them a price break accordingly.

The Concorde Agreement used to assure teams that some of these races would always remain on the calendar. The agreement (the commercial terms by which F1 is run) expired last year and it’s not clear whether the events are still protected.

Rumour has it Silverstone has been offered a new deal at a reasonable rate but with some very stiff repayment conditions attached. There are also suggestions that the British and French rounds might be forced to hold races on alternate years – a very unsatisfactory situation for the country that he the first ever Grand Prix (France) and the country that held the first world championship F1 race.

I’m glad to see F1 broadening its spread to new venues around the globs. But I don’t want to see it happen at the expense of the venues that are an intrinsic part of the sport’s appeal.

Read more about past Formula 1 tracks

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32 comments on How new tracks are squeezing traditional circuits out of Formula 1

  1. TommyB said on 22nd April 2008, 16:31

    I always look forward to new tracks coming into F1. As long as they keep what I consider the 4 classics I’m happy (Monza, Monaco, Silverstone and Spa.)

  2. Gman said on 22nd April 2008, 16:57

    Many of you who are regular visitors to this blog know me best for my rants in support of the United States Grand Prix returning to the schedule ASAP- hopefully at Indianapolis. That issue is related but seperate for the most part, so let’s look at the European venues in this case.
    Obviously the four tracks many of you have mentioned above- Monaco, Monza, Spa and Silverstone- should have a GP every year. From Keith’s writing above, it appears Bernie may finally be cooperating with the folks at Silverstone and perhaps that venue is not in danger anymore- that’s great news for all F1 fans! France should also host one, but perhaps there can be some debate as to it’s best venue. As for the others, it is important for the sport to expand into new markets, but there should always be at least one race in some markets that teams want to come to and where the fans enjoy the sports- Australia, Canada and- yes indeed- right here in the United States.

    The traditional European venues are the heart and soul of the sport- here’s to many more years of enjoying F1 at those locations.

  3. GMac said on 22nd April 2008, 17:39

    I’m surprised nobody has mentioned Interlagos, surely one of the crown jewels? In terms of international exposure the FIA need S.America on board.
    I agree money is the primary but not exclusive factor – there is a balancing act in keeping the longterm fans on board. B.E. & the FIA should tread carefully.

  4. Rabi said on 22nd April 2008, 17:50

    The old tracks would definitely welcome the notion of increasing the number of grand prix’s in a year. So places like Silverstone, Monaco, Monza, Montreal, Spa, Interlagos, Suzuka and Magny-Cours can all stay.

    I would have said Hockenheim but only if it had remained as the OLD Hockenheim before Tilke got his grubby hands on it and screwed it up. The FIA should be shot for forcing the local government for changing it.

  5. Lady Snowcat said on 22nd April 2008, 19:10

    Just to say that I think the only thing that currently holds regarding the Concorde agreement is a gentleman’s agreement to stick with the old rules until something new turns up…

    The actual signed Concorde agreement ran out in 2007 I believe….

  6. Keith Collantine (@keithcollantine) said on 22nd April 2008, 19:31

    There never seems to be any suggestion that Interlagos might lose its place on the calendar. After the shambolic race in 2003 where several driver crashed out because of a deep stream of water running across the track it won the right to hold the coveted end-of-season race the following year.

    It is a great track however, although I think the new surface has sapped some of the challenge from it.

    In terms of which venues have held the most Grands Prix, Interlagos ranks 10th with 25.

  7. the limit said on 22nd April 2008, 19:37

    F1 needs challenging circuits, 210mph straights, tight chicanes at the end, etc. The cars have to be tested to the limit, along with the drivers, it has to be a challenge. The new circuits are all to a high standard, but you could be anywhere, as they are all Herman Tilke circuits, they all have the same style.
    The old Hockenheimring was massacred back in 2001/2002 for the circuit we have now, no where near as scary as the old.
    This is why people want the old circuits kept on the calender, as they off the one real test left to a driver.
    Kimi Raikkonen makes no secret for his love of Spa, its his kind of track.
    The fans want full on, high speed racing with an element of risk to it. Thank god for circuits like Spa, Monza. Our only salvation.

  8. theRoswellite said on 22nd April 2008, 19:57

    We should be discussing something more fundamental than which tracks are in and which are out.

    How have we come to a point in time that the commercial decisions of one person, or if you like the commercial and administrative decisions of two men, completely control  both the structure and the cost of putting on a Grand Prix?

    I recall a day when these decisions were made primarily by the national governing bodies and the FIA, not by a single contracted commercial entity.

    The power now residing in Mr. Ecclestone’s organization has been granted him, without doubt, totally within all existing law.  This does not mean that his power must be, or is, being exercised for the good of anyone other than himself.  That isn’t a condemnation of Mr. Ecclestone the business man; he is certainly maximizing his own financial interests.

    He should not, however, be the only person deciding on the world’s  Grand Prix scheduling.

    The members of the FIA have been in default of their responsibilities by allowing this condition to result.

    Mr. Ecclestone and Mr. Mosley have done some wonderful things for the sport.  They have through astute business and administrative programs essentially made F1 into an enormously successful enterprise. 

    They deserve their due, they don’t deserve to have total effective control over all aspects of the sport, to include which tracks will have a GP and which will not.

    So, let’s stop quibbling over which tracks are in and which are out, and start applying some responsible pressure on our national representatives to the FIA.  This problem will have a positive outcome only when the public demands it.

    No one can govern, without the consent of the governed.

  9. Robert McKay said on 22nd April 2008, 20:06

    It’s a tricky one. Guaranteeing tracks like Silverstone, Magny-Cours etc. protected status doesn’t really give them much incentive to buck up their own ideas. I agree that Bernie’s demands are extravagant and ridiculous and should not be pandered to, but at the same time a little part of me thinks the BRDC is not quite as motivated to improve its circuit as much as it should be (although that is purely my opinion). And the gap would only widen between new tracks and old tracks if there was no threat at all of them coming off.

    Having said that there is no point in these traditional European circuits trying to compete with Asian governments plowing huge amounts of money in to new tracks. And of course these older circuits have the character and soul of F1 (I don’t neccessarily agree that drastically better racing is one of their features), as well as being a very different proposition to the new Tilke circuits.

    Hmm, so what am I arguing for here? Tricky one: a bit of status quo, I guess. Bernie being less greedy and less hypocritical would be nice (taking races out of Europe but hosting them at night so Europeans can watch is ridiculous). More races is obviously a must, and there’s no need for as much testing. I’m not sure WRC’s new alternating calendar would work, but it’s an interestng thought….?

  10. Kathryn S said on 22nd April 2008, 21:07

    I think what needs to happen is that Bernie needs to have some "skin in the game"–some of his money needs to be at risk at the venues.  There should be a greatly reduced sanctioning fee…then the venue and Bernie share the take–the higher the percentage of tickets sold, the larger Bernie’s take.  This allows the traditional venues that fill the place to maintain their races and those places that are willing to pony up the high fees for the prestige of a race, but have nary a fan in the stands to be put under pressure to make the races more accessible to fans.

    I doubt that Bernie would ever agree to such a plan, but it would certainly protect those traditional venues.

  11. Gman said on 22nd April 2008, 21:17

    That’s a great plan Kathryn- it would have made Indianapolis one of the most sucessful venues on the schedule if Bernie had followed your scheme, and it would indeed protect the more traditional venues as well. I’ve always said that attendence at the track should be a driving factor behind the future of a GP, and your idea fits along with this.

    Of course, I doubt any such plan happen as long as the hobbit is in charge :(

  12. Kathryn S said on 22nd April 2008, 22:53

    @Gman,

    Perhaps it’s just a coincidence that I’m an American, have attended the last two USGPs and want the USGP back in Indy as much as you do…

  13. theRoswellite said on 22nd April 2008, 23:11

    To step aside for a moment from my last post……………

    Any long established sport exists as much in the minds/hearts of its’ fans as in any specific team, participant or venue.  In F1 this axiom can be demonstrated by the passing of such stalwarts as Lotus, Senna and the Nurburgring, with little loss of public support.  This is, of course, the Ecclestonian reality.

    However, if there is no higher standard than a "business model", we stand in threat of losing our history.  To strip away those places in which our most prized moments have taken place is to remove the context of our appreciation. 

    For myself, looking over far too much history, the tracks often seem to be the focus for the reenactment of past glories.  Attending Laguna Seca, for example, brings back images of Denny Hulme’s outrageous CanAm McLaren, the perfection of Dan Gurney in a Lotus 19, and especially the determination of three times World MotoGp Champion Wayne Rainey. 

    I’m certain Bernie can make a case for a future in which no one actually watches a race "in person", it being staged only for the massive television audience; fortunately that won’t be a future I’ll being taking part in.

  14. I hate sitting at home watching a race that is being run to empty grandstands. Even through a visual medium like TV – there needs to be atmosphere.
    I think the drivers would agree with me on that point.

    Great post/s theRosewelite. I won’t rehash what you have already said so eloquently, but I agree totally.

  15. Gman said on 23rd April 2008, 1:51

    Kathryn, that’s great to hear!! I diden’t develop an interest in the sport until last season, so i’m hoping to attend my first USGP in 2009. It works out OK for me this season, as i’ll be able to invest the funds that would be used for Indy to see multiple games in the final season at Yankee Stadium, but next summer I hope to see you and many of the other regulars from this site at Indy!

    theRosewelite, you have a very good take on the subject- I like the term "Ecclestonian" in your description of the issue!

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