Zandvoort’s return to the Formula 1 calendar, confirmed yesterday, has long been an open secret in the paddock. It’s been clear for some time the circuit nestling amongst the North Sea dunes hoped to feed off Max Verstappen mania to reinstate a race last held more than three decades ago.
Given the cost of upgrades required to bring the circuit up to FIA Grade 1 (F1) specification – plus much-needed infrastructure investments – and a realistic capacity limit of 90,000 spectators and overall paucity of grandstands, three years seems too short a timeframe for a reasonable return on investment.
Most of F1’s current (new) race contracts are of five-year duration, with break clauses after three, so unless there are enforceable options on Zandvoort’s side, the circuit could find itself coming up short. It would not be the first such instance, either.
Zandvoort’s return has obvious implications for the rest of the calendar. Which two of the three grands prix on F1’s current ‘doomed’ list – Spain, Germany and Mexico (Italy and Britain appear to be safe) – will survive another year? Already we know Germany’s contract is for this year only, with an option on Liberty’s side for 2020, and nothing thereafter, while the other two are fully out of contract after their respective 2019 events.
Where is Liberty’s restructuring of the F1 calendar leading? Does one grand prix in South America suffice; should the USA have more than its single round at the Circuit of the Americas? Is Europe currently best served by its nine (11 if one stretches the region to include Russia and Azerbaijan, and 13 if Europe is lumped in with Middle East), or should that number decrease?
Liberty’s own numbers (below) break down where in the F1’s estimated 508 million fans are to be found (below). If this truly is a fan-orientated sport in the way we are often told it is, the location of races and the number of fans should eventually align as the owner of F1’s commercial rights will eventually allocate races on the basis of fandom. So let us do the math and analyse the average number of fans per race, per region as per the current calendar.
|Region||Fans||Number of races||Fans/race||Projected races|
|North America (exc. Mexico)||100 million||2||50 million||4 (+2)|
|Europe, the Middle East and Africa (EMEA)||150 million||13||11.5 million||6 (-7)|
|Latin America (inc. Mexico)||77 million||2||38.5 million||3 (+1)|
|Asia-Pacific (APAC)||181 million||4||45.3 million||8 (+4)|
|Total/average||508 million||21||24.2 million||21 (-)|
The United Nations lists 206 states (of which 190 hold undisputed sovereign status, with 16 being disputed). On the basis of this list and 21 current grands prix, it follows that a little under 90 per cent of countries don’t even get to host an F1 round this year.
Based on the table above, EMEA, particularly the Middle East and its two events is over-served by a factor of almost 200 per cent, while APAC is under-served by a factor of 50 per cent. North America, too, could double the number of its races to ‘breakeven’.
All this assumes, of course, a continuation of F1’s 21-race calendars, but it seems the limit has been reached – particularly if budget caps are introduced. How can teams be expected to reduce costs on one hand while incurring increased costs due to expanding calendars on the other.
Restrictions on race personnel, spare cars, testing, caps on items such as engines and standard tyre contracts mean that it costs roughly the same per team – whether Ferrari or Sauber – to design, build and race two cars over a season, with a ballpark figure of $100m being bandied about. The balance covers costs of driver salaries, marketing/hospitality and car development, and hence the overall differences.
On that basis the cost of actually competing currently averages $5m/race, so it stands to reason that expanding calendars to 25 legs cost teams around $20m extra at a time when they’re facing budget caps. There are arguments that more races result in more income, but sponsors, TV broadcasters and ‘bridge and board’ advertisers have finite budgets, while boosting the number of rounds skews F1’s desirability factor.
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Thus, any calendar realignment is likely to come at the cost of European rounds, particularly as these events pay amongst the least in fees. For starters Monaco, whose contract expires next year, should pay up or face the chop. Where once it was F1’s blue riband event, the jewel in F1’s crown, it is today a decaying anachronism which fails to even attract a harbour full of dinghies, let alone super-yachts.
Whichever way one looks at European races, it is inevitable that there will be some rationalisation, with the addition of Zandvoort bound to hit Hockenheim (the most likely loser) or Barcelona, with Mexico having the best chance of the three ‘besieged’ races to retain a slot – certainly if one looks at the imbalance of the calendar as per the table above.
The same logic applies to a mooted race in Copenhagen (the Kevin Magnussen factor) and other European venues aiming to host a grand prix: inclusion is likely to come at the cost of another European race. Indeed, a case could be made that F1 should cull the number of European legs rather than increase them.
Of course, traditionalists will argue that Europe is F1’s heartland, its centre of passion, but the flip side is that nine (purely) European races in an area of 10 million square kilometres equates to a race per million square kilometres, while the USA/Canada (total 20m sq. km.) has but two races, or a race for the same land area as the whole of Europe…
Then, forget not that Liberty’s EMEA fan count includes the continent of Africa, which has not hosted a grand prix since 1992/3, skewing the race count even more. Morocco may hold Formula E and WTCR rounds but sub-Saharan Africa currently hosts no FIA World Championship rounds save for a WRX round in Cape Town, whose contract expires this year.
Given rumours of Kyalami’s return to the F1 calendar, on a recent trip to South Africa I made a point of enquiring about the chances of a South African Grand Prix. For starters, it seems the current owner of the circuit, a family trust, has no interest in hosting an F1 race, but is prepared to lease the circuit for the appropriate period for such use.
An international consortium, said by Liberty insiders to be headed by Wayne Scheckter, son of former F1 driver Ian and nephew of 1979 Ferrari world champion Jody, is planning to pitch. However, if numbers being bandied about are any indication, the project is likely to sink even before it dons waterwings unless granted state support – unlikely given that F1 is still viewed as an apartheid-busting, elitist activity.
A eye-watering hosting fee of $65m ($200m for a three-year deal) is said to be on the table, with circuit rental, (amortised) upgrades to Grade 1 level and promoter expenses taking the cost per race to $75m (R1bn). With a capacity of 80,000 and no state support in the offing that pans out at almost $1000 (R12 500) per average three-day ticket, or more than a qualified teacher earns per month.
Still, F1 cannot dub itself a true ‘world championship’ without a leg on every inhabited continent, so, if Liberty was prepared to race in Miami for free to build its profile in the land of NASDAQ – and still does in Monaco to suck up to high-rollers – it should look at sharpening its pencil for Africa rather than charging what would be the highest hosting fees in F1 history.
However, correcting the overall calendar imbalance will be no easy task, but two regions in particular simplify the matter: North America and Latin America, with both needing to gain two and one race respectively. In the former case retaining Montreal and adding one race to each of the country’s two coasts while sticking to Austin makes perfect sense. Failing that, a coastal race and one in Las Vegas ticks those boxes.
For Latin America the trick is to retain Mexico City (which has been hit by the new national government’s refusal to continue paying for it) and a round in Brazil (preferably Sao Paulo) while adding a race in Buenos Aires (mooted recently) to take the tally to the requisite three.
Although Vietnam is confirmed from next year onwards, adding further races in APAC territories is complicated by F1’s history in the region: Turkey, Malaysia, India and Korea all had unhappy experiences, although the first two named countries recently made noises about returning to the calendar, and all four countries have circuits that meet (or did) F1 standards.
Indeed, allocating a race to Turkey solves part of the European problem: swapping with Azerbaijan’s race reduces the imbalance, while retaining a race in the greater region. Malaysia seems a shoo-in in future.
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India has a burgeoning motor industry (and middle class), and (the remains of) a circuit outside Delhi. The place deserves a second shot, but the sport suffered too many administrative and functional glitches. Korea is, though, another story, provided the race is a street event in or around Seoul, i.e. as far from Mokpo as possible, for the most southerly tip of the peninsula did the country, and F1, no favours.
While the country and its motor brands were far from ready for top-line motorsport in the late noughties, both KIA and Hyundai are now respected competitors in other FIA motorsport categories, so Korea gets the nod over India. Plus, who knows – one or the other of its motor brand may enter F1 in future.
Europe, the Middle East and Africa looks most likely to lose races. This might be as many as seven, or six after Azerbaijan’s swap with Turkey, five after either Germany or Spain drop off, four if both do, as seems likely if Mexico retains its place.
Clearly another of the drop-outs needs to be either Bahrain or Abu Dhabi given over-saturation in the region, preferably the latter as Bahrain pulls out all stops to make F1’s sojourns as pleasant as possible. Three to go.
Obviously a prime candidate is Monaco unless the Prince pays the going rate in future, which seems unlikely. Meanwhile Paul Ricard’s date and location – within a month and 300km from the Principality – makes it the alternate candidate. But one of the two needs to remain on the calendar to tick the Francophone box.
Which two other races could go? The list of candidates (in alphabetical order) is: Austria, Belgium, Britain, Hungary, Italy, Russia. Selecting two of the six is an excruciatingly difficult task, so let’s work in reverse order by establishing which countries are most likely to remain on the calendar. In pole position is Russia, simply as it pays a wad and would be the only event in the emerging region after the Azerbaijan found itself swapped for Turkey.
Britain and Monza need to be retained for historic reasons: the former given that the country is home to seven of ten teams, with an eighth, Toro Rosso, having a base there, while Monza is the only venue with soul.
That leaves Austria, Belgium and Hungary. The latter, ironically the youngest outright addition to the European roster of races, has a catchment area that takes in Austria, parts of Germany and the entire Eastern Bloc (the promoters are making a big deal of Robert Kubica’s return this year to attract the Polish market), so is secure.
Thus Austria seems the most likely drop-out given its dwindling attendances and the fact that its hosting fee is indirectly subsidised by Red Bull’s share of F1’s inequitable bonus structure, which will likely be reduced from 2021. And for the last four years Belgium has been sustained by the ‘Max factor’, which is likely to be heavily reduced now that Zandvoort has been confirmed.
Thus, over time Spa-Francorchamps, arguably the most iconic and certainly the most scenic of all venues on the F1 calendar, will likely be dropped as Liberty makes way for ‘new races in iconic venues’. And it may not be the last.
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