A glimpse into how F1 race promoters are forced to negotiate

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Brought to you by TJ13 Editor in Chief Andrew Huntley-Jacobs

Old dogs, love to deliver their old tricks. They are well practised, slick and to someone who is watching their antics for the first time – it’s impressive.

Yet old dogs are rather stuck in their ways – hence the phrase, ‘you can’t teach an old dog new tricks’. And maybe their memories are fading, because their delight at performing a trick is diminished in no way – even if the observer has seen it countless times before.

Back in 2012 as the Circuit de Catalunya was considering its position on the F1 calendar, negotiations with Bernie Ecclestone were not going swimmingly. A hefty hike in the race hosting fee was being proposed and the Catalan race promoters were stalling due to a lack of financial commitment from local politicians.

The Formula One Spanish GP, like most others in the 21st century, cannot break even never mind make a profit from just its commercial activities surrounding an F1 weekend and requires public funding to meet the FOM hosting fee demands.

Speaking to Spanish radio station Cadena Sur in March of 2012, Ecclestone made the surprise announcement: “Barcelona and Valencia have agreed that the best thing is to alternate and now we are trying to decide on the dates.”

By alternating GP’s between two regions of a country, it counters the race promoter’s argument that the annual cost levied by Ecclestone is too onerous on the local public purse.

It also creates a fear in an F1 race promoters mind. If another circuit or region of their country gets a slice of the F1 action, the current race organisers may end up lose their F1 race completely.

In the case of the Spanish GP, something behind the scenes broke just a few months after Ecclestone’s co-hosting revelation. Maybe Bernie reduced his demands, but also in late 2012 the Circuit de Catalunya came to an agreement with the public institution Diputacion Provincial de Barcelona, which provided an undisclosed new tranche of annual funding to the track.

The Circuit de Catalunya chief Vincente Aguilera called a press conference at short notice and announced in December, “We have a contract to host the GP de Espana until 2016 and we want to keep it.”

Not only were Valencia instantly cut out of any deal over the race in Spain, but Aguilera added, “Indeed, we are open to negotiating an extension until 2020 with the same conditions. We have no desire to alternate. We cannot speak for Valencia, who have agreements with (Bernie) Ecclestone about which we have nothing to say.”

The newly named Circuit de Catalunya, Barcelona – appeared to have secured their F1 race until 2016.

Yet the race sharing proposal was not completely dead in the water. As negotiations over the long term future of the Spanish GP continued in 2013, the President of Catalunya gave an interview to the Dario Sports newspaper. Artur Mas said, “If Valencia is able to have the Spanish grand prix in 2014 then it will, otherwise we will do it, because as of now – unlike two years ago – we have the financial ability to do it every season.”

This declaration was clearly for Ecclestone’s benefit because by then a return Valencia would have been most unlikely. The circuit had fallen into a state of disrepair and the political will in Valencia to fund FOM to the tune of 20m euros plus had waned.

Prior to the Spanish GP this year, the Circuit de Catalunya shored up its position until 2019 with an extension of their F1 race contract. Following the announcement, circuit boss Vicenc Aguilera cheekily added, “We look forward to the next 25 years.”

TJ13 recently reported on a visit to Ecclestone’s London offices from the Imola circuit owners, who are considering bidding for the Italian GP in “Imola F1 GP return is but an illusion.”

Present at the meeting was Uberto Selvatico Estense, president of Formula Imola, and Stefano Manara, president of CON.AMI together with the city’s mayor, Daniele Manca.

Manca revealed to the press the purpose of their visit: “We wanted to show Ecclestone how willing Imola was to get Formula 1 back – but also do our part to keep the Grand Prix in Italy.

“We presented our plan to re-launch the circuit, outline the investments we have made and what we plan to do in the coming years with our infrastructure.”

Two days later, a leak from FOM suggested a deal could be constructed that would see the Italian GP shared between Imola and Monza in alternate years.

The old dog was clearly performing his unicycle routine once more.

Today, Jonathan Noble reports Ivan Capelli, the president of the Automobile Club of Milan which is involved in the F1 Monza event, has dismissed the idea that Monza and Imola will co-host the Italian GP.

“We haven’t received any official proposal from Imola to alternate the race,” said Capelli. “Everybody’s experience shows that that kind of situation is not good for F1. In Spain it didn’t work, in Germany it didn’t work, it didn’t work in Japan with Suzuka and Fuji”.

Clearly Monza is struggling to find the funds to pay Bernie the incremental 10 million euros a year he is demanding to renew their F1 race contract.

There is another deficit the Cathedral of Speed needs to plug. Recently, the Italian authorities cancelled a tax rebate reported to be worth 20 million euros a year to the Autodromo.

However, Monza has an advantage which Barcelona did not. The chairman of Ferrari, an Italian national institution, has spoken on the matter recently. “If I consider the prospects for Monza, I think the race will not be excluded from the championship”, said Sergio Marchionne.

“If, in order to have this guarantee, we will have to intervene in the negotiations with Ecclestone, we will do that.”

Ooh err. That statement could be read in a number of ways, one of through an old pair of Scicillian spectacles.

Capelli is seemingly bullish about the situation and suggests the Imola news may wake from their slumbers, those in Rome who in fact support the Italian GP in Monza.

“Let’s say the fact that Imola are saying they are ready is probably waking up a little bit the politicians in Rome who must actually support the GP.

“We are meeting Ecclestone soon to show him our situation and our proposal.”

Whatever, the outcome, the three legged half blind old dog will be happy – his trick is again having the desired effect, because any incremental payments from Monza is a bonus.

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5 responses to “A glimpse into how F1 race promoters are forced to negotiate

    • Indeed… It worked perfectly well for Philip II, king of Macedon (382-336 BC) – to whom the maxim ‘divide et impera’, or divide and conquer, is attributed to.

      Let me tell you; if it’s good enough for a King as a strategy toward the Greek city-states, then it’s sure as hell going to be highly effective in controlling a sport filled with myopic, self-obsessed psychopaths….

      It must all be so amusing for Bernie. It just keeps working.

  1. I rated Ivan Capelli high as a driver, and rate him (still) high as a person. His current way of working only confirms him as a top bloke. It’s pretty difficult to negotiate with someone like Bernie, so let’s hope he can pull it off. Too many sandbox GPs already, please let us fans keep some of the traditional tracks.

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