In RACER's current issue: F1's Identity Crisis

In RACER's current issue: F1's Identity Crisis

Racer Blog

In RACER's current issue: F1's Identity Crisis

While F1 seeks new markets, many of its historic events face uncertainty. Does tradition matter to the sport’s future?

There are Formula 1 races and there are “proper” Formula 1 races. You probably instinctively know the difference – the first category comprises the historic races in grand prix racing’s European heartland that exist for genuine fans; the other, the arrivistas that apparently don’t really count. The historic races, we’re told, are part of grand prix racing’s DNA and must be protected in the face of these upstart additions. But that’s a grossly over-simplified position, not to mention a foolish metaphor given that DNA mutation is one of the key mechanisms of evolution.

But that’s not so say the traditional venues are not important. Why? Because they are where the fan base is the most deep-rooted and robust, so to neglect them would be foolish. Yet that has to be balanced against a genuine need to expand what projects itself as one of the few truly global sports. After all, the population of Europe is dwarfed by that of China (first race: 2004) alone.

With the exception of Monaco, which has a uniquely privileged status and does not pay a dime, every race promoter must pay a hosting fee. These collectively account for around a third of F1’s income, with the largest fees now not far south of $100 million. Needless to say, the races in Europe are paying far less than this, yet are still struggling to break even.

A prime example is probably the most historic race of all. The French GP was the first national grand prix to take place, back in 1906. It was, with the exception of the year of the Le Mans disaster, an ever-present on the F1 World Championship calendar until 2008. Magny-Cours, which hosted the race from 1991 to its last running, could not continue without financial help from the government – at the very least in the form of a public/private partnership. Such help was not forthcoming, hence no race.

It’s a similar story all over Europe. The German GP, scheduled to be held at cash-strapped Nurburgring last year, didn’t happen. It’s back this year at Hockenheim, which can only afford to hold the race every other season, and even then is constantly pushing for greater government guarantees to make up for any financial losses. The promoters have already issued a warning that anything less than a sellout for this year’s GP could mean the end of future races.

The exorbitant race-hosting fees (which are only part of the equation, because you also need to operate the track), mean ticket prices are high. So in Germany, despite a home-grown superstar in Sebastian Vettel, it’s a tough sell. The story is the same at historic Spa, where crowds have declined.

Even when you have an exception like Silverstone, where crowds have risen in recent years to the point where the British Grand Prix expanded capacity to 150,000 this year, it’s a struggle to make even a slender profit. Last year, the venue’s owners, the British Racing Drivers’ Club, paid $24 million for the race, and there’s an annual fee escalator believed to be set at 5 percent. To make matters worse, the fee is paid in dollars, so it’s prone to currency fluctuations. And this is arguably the strongest European race economically. As Derek Warwick put it last year in his capacity as president of the BRDC, “there is no loyalty in F1.”

For proof of that, just look to Italy. Monza – which has hosted more world championship races than any other venue and only dropped off the calendar once, when circuit renovation work forced a temporary move to Imola in 1980 – is endangered. Today, it’s a very realistic possibility that it might lose the race because it can’t afford it. Given it had a race-day attendance of 80,000 in 2015, what does that say about the business model?


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