How new tracks are squeezing traditional circuits out of Formula 1

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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:

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

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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Keith Collantine
Lifelong motor sport fan Keith set up RaceFans in 2005 - when it was originally called F1 Fanatic. Having previously worked as a motoring...

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

  1. Just to add, only Monaco is GUARANTEED a GP slot – I read in F1 Racing this month that they pay no race sanctioning fees (for obvious reasons).  The others don’t have this luxury.

    Of the other major European countries (Britain, France, Italy, Germany, Belgium, Spain), only Belgium, Italy, and Spain look good for the long haul to me at the moment – Belgium because they’ve just renovated the Spa paddock and it’s always been a popular racetrack with everyone, while Italy because of Ferrari (and they did do renovations back in 2002), and Spain because Alonso is still around, but that won’t be forever.

    Britain’s and France’s woes are documented above, while Germany post-Schumi may end up being like them.  However, if drivers like Rosberg and Vettel step up to championship status, they may return to the glory days of the 1990s.

  2. i am in oz and reckon our GP whould stay simply because everyone in the F1 world loves the place!
    also, the new circuits have nothing on the older tracks in terms of challenge etc, i dont recall the last really decent one, turkey isnt all that bad but only turn 8 is a challenge!

  3. Hey nathan,

    "i am in oz and reckon our GP whould stay simply because everyone in the F1 world loves the place!"

    Yup, that’s true.  Too bad the government isn’t really too much into it.  And that puts it in trouble, to be honest.  I mean, everyone loves Spa, but there was no race there in 2003 and 2006.  Everyone also loves Suzuka, but it now has to alternate with the much-less-loved Fuji.

    Love helps, but money talks.

  4. i know,  sad but true!

  5. If there are 6 races that are protected – Monza, Monaco, Spa, Silverstone, France (wherever they decide to hold it) and Germany it still leaves up to 14 other spots that can be filled by other races. More than enough I would say. The history and tradition must have some value in F1 – look at Monaco – not a track that offers best racing these days but the race is in no danger and pays ZERO in sanctioning fees (that is what F1 Racing mag printed last month). How does that compare with average sanctioning fee or with that of Malaysia …

    Why not make it a condition for new tracks (or all the tracks except the "protected ones") to contribute to a fund to support the historical races or venues ?

  6. The Concorde Agreement still holds, at least in theory – it was agreed in 2005 that there had to be one for various reasons – so the protections are still there for Britain, France, Belgium and Italy. However, it is at the FIA’s discretion whether to exercise those protections, which is why on Bernie’s advice Belgium fell off the calender twice anyway.

  7. I would also be in favour of a flat rate fee, set at a level that allows reasonable profit for both venue and FOM. At the moment, the fee is way too high, making it virtually impossible to even think of breaking even (as the British Grand Prix has to do).

  8. Somehow, Keith, I doubt anything will come out of this.  As I said earlier, love helps, but money talks.

    Also, I think it’s somewhat significant that this piece of news came out on Earth Day.  Hmmm…

  9. I had no idea it was Earth Day! Is that like on that South Park episode then?

  10. Hahaha!  This is the most hyped-up Earth Day in a while.  Anyhoo, as for South Park, I’m not sure, to be honest.  I just find this fishy… :)

  11. I have been to many GP’s, including those in Malaysia, US , Canada, Germany, Italy, Britain, Spain and Belgium.
    Intersting to note the cost of the Malaysian GP, and yet the ticket prices are alot cheaper than anywhere else I have been.

    This is reflected in the entertainment provided, with barely any merchandising(in comparision with the rest), and a non-enthusiastic atmosphere.

    Although understanding that it is a worldwide sport, the older more traditional circuits such as Nurburgring, Hockenheim, A1 Ring, and Imola offer alot more for the spectator….with more "buzz", atmosphere, displays and merchandising.

    Instead of charging less for those GP’s which annually sell out, the charges are lessened for the Malaysian GP.
    Hardly fair to the fans!

  12. james steventon
    22nd April 2008, 14:00

    Speaking on a purely British note, it angers me that the British Government have not stepped up to the plate towards F1 as they have other things recently, namely the 2012 Olympics.
    Silverstone, the track anyway, more often than not, provides great racing, and more than one place on the circuit to overtake. The facilities, the last time I was there anyway, were nothing short of a joke. 
    I just can’t understand why the British don’t show more pride in their sporting heritage? Its great to see Wembley rebuilt and looking fabulous, and great that London has got the Games in 2012, but F1 should be afforded the same attention.
     Great Britain has provided us with more world champions, and more F1 teams, than any country on earth. It is, essentially, a sport founded in Great Britain. Why not celebrate that with the best racetrack on earth, in any series, by completely overhauling Silverstone properly.
    Somebody needs to remind Westminster that ‘national pride’ is not a dirty word, it is our birthright!

  13. Friendly note to Bernie –
     – please don’t destroy F1. pricing out the best circuits will drive away the fans. surely it can’t only be about money?

    kind regards from a big F1 fan,
    p.s – please don’t let hermann tilke design any more F1 circuits… please!!!

  14. Greed greed greed and very soon F1 will be priced out of the market. There will come a time when countries just do not see it as something worthwhile to invest all that sum of money into. Because we shouldn’t forget the costs of building and maintaining an F1 track, except of course we are looking at having about 6 or 7 races in the middle east.

    I think a sensible alternative will be to alternate the hosts, that way they can get to many circuits and it will be something worth looking forward to.

  15. 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.)

  16. 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.

  17. 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.

  18. 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.

  19. 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….

  20. 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.

  21. 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.

  22. theRoswellite
    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.

  23. 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….?

  24. 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.

  25. 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 :(

  26. @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…

  27. theRoswellite
    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.

  28. 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.

  29. 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!

  30. Nick Fry has spoken in support of F1’s classic venues:

    The sport has to retain some of its heritage and I can still get misty-eyed at Monza, even on a wet Wednesday. Formula 1 would be much the poorer for losing those European circuits and I can never see that happening.

  31. I will keep Monaco, Monza, Spa and Interlagos about the rest I keep an open mind.  What doesn’t really makes sense is to have two venues in the same country (see Spain)… In a perfect world I would add the best circuit ever the Nordschleife (old Nurburing).

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